Remanufacturing and Recycling Programs Are Good for Business, Good for the Environment

    April 14, 2008

     

    By Jenny Carless, News@Cisco

     

    What happens to used information technology (IT) equipment after a customer

    has returned it for repairs or replaced it with newer equipment? Is it possible

    to keep discarded routers and switches out of the landfill?

     

    At Cisco, several organizations across the company work to remanufacture or

    recycle as much Cisco equipment as possible. These programs constitute part of

    the company's efforts to reduce its carbon footprint and help the environment -

    but they also make good business sense.

     

    Remanufacturing Is Big Business

     

    Since 2000, Cisco Capital Remarketing, a business unit within Cisco Capital,

    has played a primary role in remanufacturing returned units for reuse. In fiscal

    2007, the group remanufactured more than 410,000 units, preventing approximately

    4,800 tons of equipment from ending up as toxic waste in landfills around the

    world.

     

    Remanufactured units may be redeployed as field replacement units to support

    warranty claims or resold as Cisco Certified Refurbished Equipment to new and

    existing customers.

     

    "Whether they call it 'green IT' or not, the fact is that it just makes good business sense."
    Joseph Pucciarelli, Program Director, Technology Financing & Management Strategies, IDC

    The availability of refurbished equipment benefits both the customer and the

    manufacturer, according to Joseph Pucciarelli, program director, Technology

    Financing & Management Strategies at IDC.

     

    "I see three main reasons why customers find refurbished equipment

    attractive," he explains. "The first, which applies particularly to large

    enterprises, is that they want to maintain what I call infrastructure

    homogeneity; in other words, they want consistency across the network portfolio,

    because it's much easier to manage and there are more efficiencies of scale.

     

    "Another driver is availability: they may need the equipment now, but the new

    model is back-ordered," he adds. "Finally, of course, price sensitivity is a

    factor."

     

    Cisco Certified Refurbished Equipment sells for at least 25 percent less than

    an equivalent new product, and it comes with the same warranty and SMARTnet

    options as new products. It is remanufactured to factory specifications, with

    all the latest hardware and firmware upgrades.

     

    From a manufacturer's perspective, there are strong business reasons for

    offering refurbished equipment. "Providing certified used equipment demonstrates and reinforces that a manufacturer understands the requirements of those IT managers who have to make hard choices about the speed at which they'll get new technology versus the

    complexity of managing their infrastructure," Pucciarelli explains. "So you are reinforcing that you understand how to meet these customers' needs.

     

    "Such programs also allow a manufacturer to support the prices on its new

    products," he continues. "By offering used as an option, you're broadening the

    spectrum of customers you can serve while maintaining integrity in your pricing

    strategy."

     

    Green Remanufacturing Process

     

    Cisco Capital Remarketing remanufactures and sells more than 2,800 different

    individual types of product in technology areas including switching, routing,

    security, wireless, unified communications, peripherals and more. It serves

    customers in 66 countries across SMB, commercial, government, enterprise and

    service provider segments.

     

    Remanufacturing includes four primary steps: systems testing, debugging and

    repairs, product engineering upgrades, and cleaning and reconditioning. All

    units of Cisco Certified Refurbished Equipment are installed with a current

    version of Cisco IOS Software.

     

    "We have a strong environmental focus throughout this process," explains

    Frank Atter, senior director, Cisco Capital Remarketing. "For example, each unit

    undergoes engineering changes to ensure maximum unit performance - and that

    means less maintenance, replacement and energy consumption will be required in

    the long term."

     

    The entire remanufacturing process meets environmental directives such as

    Restriction of Hazardous Substances Directive (RoHS) and Waste Electrical and

    Electronic Equipment Directive (WEEE) in the European Union, ISO 14001and

    relevant federal and state regulations in the United States.

     

    Trade-Ins, Take-Backs and Recycling

     

    Some of the equipment remanufactured by Cisco Capital Remarketing comes from

    Cisco Worldwide Reverse Logistics, a team that organizes, coordinates, tracks

    and manages the return of used equipment under its trade-ins and

    take-back/recycling programs.

     

    Trade-Ins

     

    Every product received through the trade-in program arrives at one of three

    warehouses around the world. Product IDs and serial numbers are logged and then

    checked against a demand list for refurbished equipment. Any products that are

    ultimately not suitable for remanufacturing undergo ecologically compliant

    disposal and recycling processes. In 2007, the program recycled 19 million

    pounds of equipment.

     

    Cisco's trade-in program is global, operating in all countries where such programs are allowed. Part of Worldwide Reverse Logistics' responsibilities includes regulatory

    compliance.

     

    "We actually go above and beyond in complying with the WEEE directive, which

    is intended to make the producers of electronic waste responsible for the

    end-of-life management of that waste," explains Duncan McCann, environmental

    compliance manager, Cisco Worldwide Reverse Logistics. "It applies to companies

    importing into the European market, and we are attempting to register under WEEE

    in all European countries, although we're technically only required to do so in

    one, because of our importing procedure."

     

    Take-Back and Recycling

     

    The Cisco take-back and recycling program is in place throughout the 27

    European Union member states, Norway, Switzerland and South Africa. "The program is free to customers. Anyone in possession of our equipment can log on to our website and arrange for collection," McCann explains. "Outside those 30 nations, service isn't guaranteed, but we will still try to do everything we can if a customer contacts us about returning equipment."

     

    Green Is Here to Stay

     

    In the coming years, efforts to refurbish and recycle IT equipment are expected to increase as customers place more emphasis on following sustainable business practices.

     

    Partners can play an important role in helping disseminate information about

    and implementing manufacturers' refurbishing, recycling and other programs. Even

    leasing can be an effective strategy for a customer to improve its environmental

    compliance.

     

    "Partners can help explain the benefits - both business and environmental -

    of leasing," explains Benson Chan, senior manager, Cisco Capital Remarketing.

    "When a customer leases Cisco equipment, we're responsible for taking it back,

    decommissioning it, and remanufacturing or recycling. This lets the customer

    focus on their business and not on technology life cycle management."

     

    There are benefits for the partners, too.

     

    "Educating our customers on current environmental regulations, assisting them with product life cycle planning and providing them with green options such as Cisco Certified Refurbished Equipment deepens our customer relationships and gives us a strategic advantage," says Frank Kobuszewski, vice president, Technology Solutions Group at CXtec, a Cisco Silver Certified Partner.

     

    For all these business and environmental reasons, it seems that green is here

    to stay.

     

    "If you look at the number of people in the world and the amount of energy

    we're using and producing, there seems to be a long-term requirement for large

    amounts of energy, which will keep prices high. That will encourage companies to

    continue refurbishing and recycling," Pucciarelli notes. "Whether they

    call it 'green IT' or not, the fact is that it just makes good business sense."

     

    Jenny Carless is a freelance writer based in Santa Cruz, CA.

     

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    Related Information

    Cisco Certified Refurbished Equipment