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What can OEMs do to leverage shorter product lifespans?

Posted: 18 Dec 2015     Print Version  Bookmark and Share

Keywords:lifespans  telecom  OEM  reverse supply chain management 

The advancement of the tech and telecom industries results in a dramatic shift in the behaviour of its primary consumers. More than ever before, mobile Internet consumers are using more data.

The increase in data usage has fuelled consumer demand for faster speeds that, in turn, creates more demand for newer, faster devices. This shift in consumer behaviour has shortened the lifespans of personal tech products and increased the speed of the telecoms network upgrade cycle.

On average, the typical lifespan of a mobile device can vary between three to five years. Consumers, however, choose to change or upgrade their products after using them for a year and a half, even if the devices are still highly functional. This has led to a significant increase in product trade-ins and aftermarket refurbishment/third-party refurbishing businesses.

Shorter product lifespans

Leveraging shorter product lifecycles through RSCM

Just five years ago, a product that had finished its lifespan automatically became waste. That was a liability for OEMs as they are partially responsible for recycling their own products due to corporate social responsibility (CSR) initiatives and other environmental regulations. Today, OEMs see opportunity: Instead of letting second-hand products flood the market and cannibalise their primary market, OEMs are using a process called closed-loop reverse supply chain management (RSCM) to leverage the shortened product lifespan and build long-standing relationships with customers, improve sustainability and increase bottom lines.

As the reverse supply chain manager for the world's largest tech OEMs, Li Tong Group (LTG) manages every aspect of the reverse logistics process for its clients, starting with a product's point of return from the end user, such as take-back or trade-in programmes for unwanted devices, to the re-manufacturing and re-deployment of components. Trade-in platforms are becoming more common and effective. The programme LTG manages on behalf of Microsoft in Hong Kong, for example, allows consumers to easily apply the value of their old technology towards new purchases at Microsoft's online store.

LTG has more than 20 facilities around the globe that specialise in the process of removing products like phones, laptops and televisions from the market and repurposing the components into next-generation devices and other products in a smarter, more environmentally friendly way.


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