These types of closed-loop supply chains may hold the greatest promise, owing to the volume of products available for re-use, but at the same time these types of supply chains represent some of the greatest challenges. We list the key factors for success in Table 40.6.
Table 40.6 Keys to success: consumer electronics closed-loop supply chains
1. Ability to forecast and control the timing, quantity and quality of product returns in a global market (IS)
2. Fast response (perishable items)
3. e-commerce to identify buyers and sellers
4. Identify and exploit cascade re-use
5. Identify and exploit technology diffusion differences
Product acquisition is very hard for this form of closed-loop supply chains. The products are used globally, but the rate of technical diffusion is different in various geographic areas. This requires that a successful operation should have worldwide collection and distribution markets and these markets will not be in the same geographic areas. Supply and demand rates and prices are extremely volatile. The products are also perishable items, since the value of a remanufactured item may drop daily because of the rapid rate of technological progress and the rate of technology diffusion. There are also multiple options for re-use, since products may be sold in graded 'as is' condition or remanufactured. Each option has a different selling price which is quite dynamic.
However, there are several of the major processes that may be characterized as easy to intermediate. The nature of the products, with very few mechanical parts, makes them simple to test, sort and grade, and to remanufacture or recondition. The reverse logistics processes are somewhat hard to coordinate since there are so many national borders with customs regulations to manage. However, the handsets are small and light and may be shipped in bulk with commercial air carriers inexpensively (approximately $0.50 as of the summer of 2000). The distribution and selling processes involve a number of different nations, and require knowledge of the cellular technology in use and the airtime providers. The selling process is, for reasons discussed previously, tightly intertwined with the acquisition process.
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