According to the EPA, more than half of the 7.4 million tons of small and major appliances made in the United States in 2018 ended up in landfills. These include refrigerators, freezers, microwaves and other appliances that are made with hazardous components that can destroy the ozone layer and contribute to global climate change. Clean-energy mandates, as well as consumer pressure, is spurring retailers to find ways to reduce their carbon footprints. Remanufacturing and reverse logistics programs helps them and offers them ways to mitigate waste while creating a supply chain for aging parts and a potential revenue stream from reselling returned items.
Another factor for retailers is that, according to Tom Healy, CEO of CoreCentric Solutions, supply chain disruptions that started in 2020 are likely to continue into 2022. CoreCentric Solutions been recovering, repairing, and remanufacturing since1995. It also works with many original equipment manufacturers (OEMs) to implement reverse logistics programs that support their sustainability goals and reduce waste.
“Today’s appliances rely heavily on technology that requires control boards and other components that are manufactured overseas,” Healy explained. “The supply chain for control boards and their associated components, specifically, was disrupted by closed factories early in the pandemic, and that disruption has continued even though manufacturing has restarted.
“Repairs using a remanufactured part can extend the life of an appliance, because the remanufactured part has been restored to its original specifications. The result often is better in quality, reliability and robustness than the original part,” he said.
Remanufacturing can help OEMs, technicians and retailers avoid contributing to the growing problem of appliance waste. In 2020, CoreCentric Solutions helped its customers keep 7.8 million pounds of scrap, 1 million pounds of plastic and 247,000 pounds of fan motors out of landfills. The company also remanufactured 125,000 appliance controls and repaired more than 60,000 products for customers.
Remanufacturing also supports sustainability by creating a supply chain for aging parts and manages obsolescence by extending the life of existing appliances. This is where reverse logistics can come into play for retailers. Reverse logistics involves the processing of returned items from traditional and e-commerce companies. According to Tony Sciarrotta, executive director of the Reverse Logistics Association (RLA), the increasing rates of returns – which also ballooned during COVID – are not sustainable for most companies, or long term for the planet.
As Sciarrotta shared on the Association’s website: “Consumer surveys of those who returned products previously identified as much as 75 percent were because ‘product did not meet expectations,’ and very few returns were for actual defects. With the growth in e-commerce, returns and reverse logistics costs are significantly growing as hassle-free and freight-free processes are mandatory to sell goods online. Manufacturers and retailers must find ways to reverse this trend.”
Graphic courtesy of the Reverse Logistics Association
The RLA encourages retailers to implement reverse logistics to help reduce returns and increase “asset recovery.” According to Healy, partnering with a firm that specializes in remanufacturing is one way that companies can engage in reverse logistics, but it is different than engaging a traditional liquidator.
“Not every product category is appropriate for remanufacturing. However, those that are, should expect a significant and meaningful improvement in overall value derived from the returns,” Healy said.
He suggests the following steps to engage with a retailer to set up a reverse logistics program:
• Establish common goals for the engagement. For example, velocity, overall recovery value, secondary channels, etc.
• Test and learn. This includes complete due diligence, evaluate and teardown samples, and piloting a remanufacturing program to establish expected yield and secondary sales values.
• Planned integration and onboarding. Ensure your remanufacturer has a dedicated team that will tailor your plan to fit your specific needs, as well as help you plan and onboard new customers to minimize the risk of disruption during execution.
Retailers must have clean-energy goals to meet consumer, investor, and government expectations. They can leverage remanufacturing and reverse logistics programs to assure their stakeholders they are moving in the right direction.
Margaret Brown is a freelance writer working with innovative companies including CoreCentric solutions. She is a veteran public relations professional providing PR and writing support for the United States Olympic Committee, the U.S. Modern Pentathlon team, Pace Foods, Tellabs, BT Security, and others.