Characteristics Of Closedloop Supply Chains For Consumer Electronics Reuse

The volume of cellular telephones in use worldwide is enormous, with over 55 million cellular subscribers in the USA alone (US Central Intelligence Agency 2000). One of the first requirements for a remanufacturer in this environment is global coverage. Since the rate of technology diffusion is different for each country in the world, phones which may be technically obsolete in Norway may be current technology in Ecuador. This imbalance in the diffusion of technology makes having global operations and intelligence crucial for a profitable operation.

Tightly tied to the concept of global markets is the problem of acquisition, or obtaining the best-used product for the best price. The prices for cellular telephones are highly dynamic and are based on future expected prices for remanufactured handsets. The problem is further complicated by the market for graded, 'as is' cellular telephones where a selling is price is known, as opposed to an expected price in the future for a remanufac-tured item.

Cellular telephones are perishable items because of the high clockspeed, the time between new product or model introductions, in new product development. Electronics industries have the highest clockspeed, an average of 18 months, and this makes responsive systems crucial to making a profit. Remanufacturers cannot afford to remanufacture to stock in this environment since the value of the items drops daily. The characteristics of this supply chain are listed in Table 40.3.

Table 40.3 Characteristics of supply chains for consumer electronics re-use

Dynamic spot markets for supply and demand High volumes Perishable good

Cascade re-use opportunities (worldwide market) High information requirements High variability

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