Sustainability for consumer durables demands deeper thinking than the simple “reduce,reuse, recycle” framework. And unlike consumables, where the responsibility for rethinking falls on consumers, for durables, the primary rethinking job belongs to business executives and environmental regulators.
A rethinking of the problem should start with an examination of the ecological impact and economics across the full product life cycle from manufacture through use, reuse, recycling, and disposal. The economic incentives for the various industry players must also be considered, including original equipment manufacturers (OEMs), retailers, service providers, remanufacturers, recyclers, and waste management companies. Every industry has a unique set of players; for each of them, the costs and benefits vary considerably, and are sometimes at odds. This insight provides a starting point for thinking strategically about reshaping the industry value chain in ways that increase profits while reducing environmental impact. Such rethinking can be employed by business executives to seek out new profit pools or, alternatively, by regulators to alter the profit pools and enhance overall societal benefits.
Consider the case of cell phones. Motorola introduced the first cell phone in 1983. Though it was expensive ($4,000), heavy (more than a pound), and awkward (a foot long), it tapped an unmet need for wealthy people on the move. Today, prices have plummeted, a typical cell phone weighs between 3 and 5 ounces, and cell phones are seen as essential for nearly everyone.
Cell phones, however, quickly become obsolete, creating a glut of older, unused phones with waste and environmental implications.
In the U.S., for example, the high rate of market penetration has led to intense battling among phone service providers to entice customers away from the competition and with ever decreasing costs, it’s profitable for them to offer ever lower phone prices. Meanwhile, manufacturers have made continued improvements in handset designs some of them significant, such as Apple’s introduction of the iPhone, which gained a 40 percent market share in its first three years. As a result, the initial lifespan of a phone has fallen to between 18 and 24 months. In other words, roughly half of the phones in use one year are retired the next year. An estimated 10 to 15 percent of these are simply discarded and merged invisibly into the municipal waste stream. A much larger percentage of those retired are “stockpiled.”Because of their small size but high perceived value, roughly 65 to 70 percent of the old phones end up in a drawer as a rarely used backup.
That leaves less than 20 percent of retired phones in the U.S. to be collected for reuse or recycling. Of those, about 65 percent are reused, mostly in emerging markets in Africa and Latin America. Prices for reused phones range from around 10 to 50 percent of the price of the new version as fresh designs with better technology continuously displace and devalue by 30 to 80 percent functional older models. This being the case, used phones quickly become obsolete and unwanted even in the secondary market.
Ultimately, only 6 or 7 percent of cell phones are recycled for scrap metal. The typical recycled phone generates less than a dollar of revenue from the recovery of about announce of copper and trace levels of the more expensive precious metals such as gold,palladium, and silver. Frustratingly, the typical recycled phone easily could have remained operational for four or five more years from a functional point of view.
Electronic waste, which includes cell phones, makes up less than 2 percent of the mass disposed of in landfills, but it accounts for 70 percent of the hazardous waste. Since most old handsets remain stockpiled in a drawer, cell phones have had little impact on land fillsto date. But with the retirement of 130 million handsets per year, there may well be more than a billion stashed handsets that could eventually end up as toxic waste.
To read full research how to creating a more sustainable solution to managing consumer durables’ end of life requires significant rethinking go to http://www.strategy-business.com/article/10406?pg=all