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A circular solution to feed technology supply chain

20/10/20 | Industry Insights

Richard Eglon, Marketing Director, Agilitas In these turbulent times where there is so much uncertainty around everything we do in our daily lives, channel firms are having to be much more innovative and collaborative. It has never been more important to keep the lights on of critical systems, for customers across the NHS, Emergency Services,…

Richard Eglon, Marketing Director, Agilitas

In these turbulent times where there is so much uncertainty around everything we do in our daily lives, channel firms are having to be much more innovative and collaborative. It has never been more important to keep the lights on of critical systems, for customers across the NHS, Emergency Services, Retail, Finance, Manufacturing and Logistics. However, this is proving increasingly difficult due to pressures on the technology supply chain.

Now is the time for channel firms to step up and collaborate with their customers and partners to implement hardware amnesties across their supply chains. It is then a matter of partnering with innovative tech repair businesses to test and repair products, and making sure we can maximise existing distribution channels to move the hardware back into the supply chain, so we can continue to support those mission-critical systems. A side-effect of this will be an improvement in sustainability, by reusing equipment and contributing to the circular economy – it may be possible that this terrible, challenging situation we find ourselves in can have some positive long-term impacts for society.

 

The COVID-19 Effect

The Institute for Supply Management published a survey back in March of this year on the impacts of COVID-19 on business and supply chains. It showed that almost 75% of companies surveyed reported supply disruption – and it is reasonable to assume that this has increased since then, as the lockdown lasted (and keeps lasting) longer than many anticipated. Due to the entire population either isolating and quarantining, involving many moving to work from home, there has been a significantly higher demand than usual for certain products, but also a decrease for others. This, in addition to the fact that the majority of international borders have been closed, means that access to materials and resources, as well as labor, from around the world is being seriously disrupted.

Out of the other end of the coronavirus crisis, we can expect to see a global reconstruction of supply chains. As policymakers and executives are becoming more strict regarding the security and safety throughout the chain, gaps are growing between large manufacturing countries such as China and the rest of the world. However, this could potentially make a better-connected and more sustainable local supply hub, if companies are capable of making this transition.

For many years, countries have outsourced materials from other parts of the world based on costs, so that the supply chain could offer lower rates as well as offering last-minute deliveries and create a more manageable inventory. Unexpectedly, due to the current circumstances, it has been made clear that this way of filling the supply chain can cause big disruptions and therefore this could lead to a transformation within the industry.

 

A Circular Solution

With that said, rebuilding the entire infrastructure of the supply chain will take a substantial amount of time and money. However, by using the circular approach, a solution for the supply chain could be built quickly and efficiently. The circular economy is most often linked with the idea of recycling, yet, there’s a lot more to it. The main concept behind this approach is to put an end to throwing technology away once it is no longer needed. Instead, it emphasises that devices can be repaired or refurbished, and given a new life – often with another company – and therefore there is no waste generated. The circular economy holds a lot of sustainable benefits for companies and brings opportunities for businesses to create value and protect the environment by improving the management of their resources, eliminating waste with innovation design and maximising the lifetime of products and materials.

The circular economy also encourages companies to use recycled or renewable materials in their products so that the final disposal of the product creates no harmful waste and reduces the extraction of non-renewable resources.

This approach is not just good for the planet; it may offer a solution to the supply chain crisis we are seeing at the moment, addressing the lower rates of new devices entering the supply chain by repairing and re-using ones that already exist. For example, a partner may have an inventory full of technology parts or devices which are being unused due to them being outdated or because they simply no longer work. By having the ability to supplement the reduced supply chain by utilising their existing technology hardware, whether this may be a faulty piece of hardware that is sat gathering dust on a shelf in a warehouse, or technology equipment that isn’t currently recognised for the value, it could play a part in a business-critical supply chain.

During these times, sharing is definitely caring. This is where channel firms have the chance to step forward and team up with customers and partners to collate hardware across their supply chains. This includes coming together with innovative technology repair companies who can test devices and repair parts of products to increase the current circulation and move this hardware back into the supply chain to support those with critical systems. Collaboration within the supply chain could bring many other positive benefits such as lower inventory levels and higher inventory turnover, lower out-of-stock levels and shorter lead times – to list just a few.

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