Supply chain services are valuable throughout a product’s lifecycle, especially as products reach their end of life. In today’s environment, newer and better versions of products are released much more frequently than they have been in the past, and the end of product’s lifecycle is coming sooner rather than later for many items, particularly electronics.
There is a range of environmental, social and economic factors driving the growth of end-of-life supply chain needs. Environmental concerns from consumers, as well as government regulations that mandate proper disposal, are increasing pressure for organizations to focus on environmental impact and sustainability initiatives, creating a key role for reverse logistics providers.
Less than half of shippers—41%—said they do not touch end-of-lifecycle products or processing, indicating that the majority work with end-of-lifecycle handling or processing in some capacity. Among those that are involved in end-of-lifecycle activities, 34% of shippers said it is a result of to consumer demand, request or expectations, and 22% said it is because of extended product responsibility. Logistics providers can take advantage of several opportunities as shippers look for help with their end-of-life supply chain. Among respondents, 41% of shippers said they prefer a third party to handle all aspects of end-of- lifecycle collection and processing; 29% would like to improve the efficiency of their internal capabilities; 20% would like to work with a third party to support product disposal; and 19% would like to work with a partner to support physical logistics/movement of end-of-lifecycle products.
Currently more than half of 3PLs and 4PLs—54%—offer logistics/physical movement support of end-of-lifecycle specific offerings, but 40% do not have any EoL-specific solutions. Among 3PL/4PL respondents, 34% said consumers demand, request or expect end-of-lifecycle support; 17% said extended product responsibility (governmental controls and regulations) were a primary reason they were involved in EoL activities; and 17% said they are involved because of secondary market value capture.
In addition to meeting customer and regulatory demands, recovering products can create opportunities for manufacturers to improve designs, and 15% of shippers said they accept failed products for research and development purposes.
As lifecycles of products continue to shorten, the role of reverse logistics in the supply chain will continue to grow. Ensuring a closed loop for the full product lifecycle allows for greater efficiency, reduced environmental impact and lower total costs at all touch points. Logistics providers that invest in the resources and infrastructure for reverse logistics can leverage their expertise through end-of-life-specific product offerings.