International logistics company DHL is leveraging its 1,200 worldwide sites to bring electronics resale, refurbishment and recycling services to the 140 countries it operates in.
“Smart Circle” is DHL’s turnkey solution, developed with Cisco, that allows customers to return, receive, recover and reuse products using just one provider.
Scott Allison, chief customer officer of service logistics, told E-Scrap News that the company’s long-term goal is 100% takeback. Smart Circle has a customer portal, where customers can print a label, ask for packaging if they don’t have the original packaging and then either drop the package off or ask DHL to collect it.
“We do some screening and testing of what came back,” Allison said. “Is what came back what was supposed to come back? Is the serial number correct?”
Then, depending on what the customer requests, DHL will either refurbish it and sell it on their behalf, break it down into spare parts or send it out for recycling.
Allison said DHL will handle all of that internally except the recycling, which will be handled by partners “because of the complexities.”
DHL has the capacity to handle large volumes, Allison said, and already works with many big technology companies. Its warehouses currently store about 35 million parts and items, so “we have the scale to be able to respond to any customer request.”
“This network has existed for the last 25 years and so all we’re really doing is repurposing it,” he said.
Currently, DHL operates in 140 countries and offers Smart Circle in all of them. Allison said he expects the U.S., European Union and China to send larger volumes of material through the system, but the whole point of DHL offering the service is for it to work globally.
“It depends a little bit on which country they want to do it in,” Allison noted. “If they want to do it in Saudi Arabia, say, we can, but we have to think about what the product is, where it has to get into. It’s not as easy to get things out of Saudi Arabia as in the U.S. or Germany. There are different things to consider, but the scalability is there.”
Filling a gap
DHL has been in the reverse logistics business for years, Allison said, and started to notice how the services were fragmented. It was all highly localized, he said, and required multiple companies all along the chain.
“You get someone in the U.S. who can do it, another one in the U.K., one in Germany, one in Singapore,” Allison said. “Nobody is really out there offering all the services everywhere a customer might want to do it, so we built this platform.”
The goal is to prevent products going to landfill, but Allison said companies are starting to realize there are also financial incentives to reusing products.
“They can make more money on the same product by giving it a useful second life,” he said, something a customer once described as “green on green” – good for the planet and good for the bottom line.
DHL started working on Smart Circle about 18 months ago. Allison said the prototyping and testing was done in partnership with Cisco and that the project went through multiple iterations.
Allison said DHL is both a customer of and supplier for Cisco, and so it knew that Cisco had a 100% takeback goal. He asked Cisco to outline the product they would create if they had a magic wand.
Josh Garrison, Cisco’s senior director of service and logistics, said DHL and his company have a longstanding partnership and history of strategic engagement and co-innovation, so when DHL asked them to imagine an “unconstrained utopia” of a product system, they readily agreed.
“We have probably one of the four most holistic circular solutions in the network of the electronics industry,” Garrison said. “DHL helped us to manage aspects of that, but when they said, ‘Hey, look, let’s get together and create next generation stuff,’ we said let’s do it.”
Cisco recently partnered with BT, a large U.K. provider of fixed and mobile telecommunications, to help that company recover more devices.
Garrison said DHL is a phenomenal partner because the company is willing to invest time, employees and money into projects.
“They are very invested in not just our relationship, but in designing the future, which is unique,” Garrison said. “Lots of companies like them are very much, ‘Hey, look, if this is not an immediate return to my bottom line then I don’t want to get into that.’ DHL doesn’t take that kind of view.”
Allison said they decided to start by targeting the tech sector because it seemed ready to jump on a more complete solution.
“This could work for other industries – medical devices, engineering – they have the same requirements, but are not quite as mature as the tech sector in taking advantage of it,” Allison said.
However, Smart Circle can always be scaled up. He added that DHL “wouldn’t have gotten into it if we didn’t think it was a big market.”
Setting DHL apart
There are already many companies out there trying to solve the same fragmentation problem, Garrison said, but what sets this effort apart is that DHL has produced a service that “is probably the closest to the most holistic solution out there.”
“You’re combining the logistics experience, the global reach of DHL with the technology investments that they have made, and they are significant investments,” Garrison said. “Everything is digital and they get it.”
Allison said there has been healthy interest in the service so far, and DHL has been invited to speak at several webinars. The company is also keeping an eye on requests for services out on the market.
“There are 50 million tons of electronic goods going into landfill every single year, so although we need to walk before we can run, we’re hoping that we can make a bit of a dent in that,” he said.
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