Rethink supply chains for circular economies

25 September 2018

Buyers must “rethink their supply chains” to fit into modern circular economies, according to Brightstar.

Guy Dunkerly, supply chain director at Brightstar, a mobile phone distribution and leasing company, said businesses must adopt a culture of reusing raw materials and products by embracing artificial intelligence (AI) and robotics.

Speaking at the Gartner Supply Chain Executive Conference in London, Dunkerly said it was vital to recycle products for “good, altruistic reasons” as well as for profit, as there was “still a lot of waste going on”.

Using the mobile phone industry as an example, he said before the rise of circular economies, “generation rent” and subscription models, mobile phones were “a disposable item”.

Companies “made enough money that you could drop half of it going to the bank and still look good”, he said.

But those days are gone, and companies must find ways to become more efficient, he said. “We must ask ourselves, ‘Where do we identify the leakage and what do we do with it?’”

The market for used mobile phones is now worth $17bn, and 10% of higher-end devices will have three or more owners, he said.

Brightstar, which delivers one in every 23 mobile phones sold worldwide and runs the world’s largest device leasing system, has sought to process used phones more efficiently using AI and robotics, he continued.

The old style of recovering products coming back from the market and repurposing them involved “a big warehouse with bunch of people in white gloves, inspecting phones as they came in” to determine their condition and suitability for reuse.

Now, using robotics and AI in these warehouses, Brightstar has “cut 80% of the cost down” by teaching machines to determine the condition of the phones, replacing many human jobs in processing.

AI can even differentiate which phones are eligible for low cost repairs, such as a simple buffing of the screen or replacement of basic parts such as charging ports, Dunkerly said.

But mobile phones are just an example of the rise of circular economies, added Thomas O'Connor, principal research analyst at Gartner. “We’re in a world where our resources are changing, and become more in-demand as populations rise,” he said.

“As part of this we need to recognise that we need to rethink the paths on which we operate our supply chains. We have the chance to become the solution.”

Dunkerly added that as a result, it was vital for companies to see recycling models such as this not as “an exercise in leakage reduction”, but as “part of a fundamental model that is helping drive business”.

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