Dell Case Study: Circular Economy and Closed-Loop Ecosystems

The case study discusses Dell’s approach through the use of circular economy and closed-loop ecosystems to be responsible on e-waste disposal. One of the main strategies to elevate productivity for Dell and its customers is the attempt to develop a sustainable supply chain. For starters, electronic waste (e-waste) is when electronic products or devices come to the end of their “useful life.” Many of the electronics items found in the workplace or at home can be recycled such as computers, laptops, printers, cell phones and many more (Mayer metals, 2018).

Due to tremendous growth in demands on electrical and electronic equipment and disposal after use, e-waste is becoming a global issue. Disposed e-waste can sometimes cause danger to health and the environment if not handled properly (Department of environment Malaysia, 2018). Dell has taken constructive actions by embracing a total lifecycle approach to improve its plastic production, use, and disposal.

In general, the product design of the company emphasizes the simplicity of repairing and recycling from the beginning.

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Dell also actively finds ways to incorporate green materials into goods and packaging, such as recycled plastic as a measure to maintain their sustainability supply chain objectives. The closed-loop program is a transition from “take, make, dispose” now uses recycled plastics to produce almost 5,000 tons of new parts for over 90 items across millions of units. It takes just under six months to complete the cycle from the moment the equipment is collected for reuse to the time the plastics are back in the hands of a customer as part of a new product.

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It can be said that the program and initiative made by Dell to go for sustainable supply chain paid off as they managed to reduce its dependence on environmentally new virgin materials which is costly due to fluctuating price on fossil fuels and they also managed to achieve in reducing their carbon footprint at 11% compared using new virgin materials.

Sustainable issues faced by Dell Inc

Supply Side issues

Dell faces challenges in making its closed-loop supply chain reliable. Dell constantly needs a vast volume of product in their line ups to be able to utilize the recycled plastics. On the other hand, Dell also faces issues where the plastic they recycle is getting less per item because through new innovations and advancement of technology, electronic devices are becoming smaller and dell needs to accept or buy a bigger volume of recycling goods to be able to produce their products. In regards to this issue, Dell will need to increase its participation in its takeback program globally and tends to incur additional cost to meet the additional volume of recyclable products required.

Technical issues

Identifying the types of plastics is one of the main challenges Dell faced which is the most suitable ones are only picked to develop its product as recyclable items are made from a lot of different raw materials. They stated that they need to overcome those issues with engineering “know how”. To deter this hurdle, Dell has been collaborating with collaborators to explore various approaches to solve their issues effectively. Testing found that the combination of recycled content with virgin plastic produces the best results due to mechanical and esthetic considerations.

Customer awareness

Dell’s next hurdle is to show consumers the value of closed-loop recycling. After all, these products look and work the same as those manufactured from new materials. Dell needs to articulate the value proposition to consumers by emphasizing the amount of recycled content in the final product, the essence of the closed-loop products and the benefits to the sustainability objectives of the customers themselves. A proper investment awareness campaign is required to be able to get mass attention and explain to customers that when they buy Dell products, they are actually helping the environment bits by bits.

Regulation and geographical issues

Another further concern is the handling of products. Dell customers are all over the world, which means take-back initiatives need to adapt at a global scale. Products need to be processed in reasonably large quantities to justify the economic and environmental costs of shipping to a centralized hub. It covers issues such as infrastructure, legislation, and others. Closed-border regulation, for example, inhibits the transport of electronic waste in Europe and currently makes it impossible for Dell to set up a branch of its closed-loop supply chain there.

Critical success factors

Dell has recovered nearly 800 million kilograms of used electronics and has produced nearly 5,000 tons of plastics from recycled computer parts since Dell launched the closed-loop plastic recycling project in mid-2014. Dell has saved over USD 1 million from this process, and Dell has managed to reduce it carbon footprint by 11% which is much lower compared when using virgin plastics during manufacturing. It can be said that Dell is currently using circular plastics across millions of units worldwide in around 90 products.

Furthermore, in order to understand the benefits of moving away from new plastics, Dell did an analysis. One of the most useful ways Dell did was they were able to measure their activities like environmental impacts, internal operations, upstream supply chain, and downstream use and disposal of products and turned those impacts into monetary values. Compared to traditional plastic, Dell measured the net benefit of closed-loop plastic for environmental impacts. Next, they valued the net environmental benefit in terms of natural capital and natural resource stock that makes human life possible and on which companies rely to produce goods and services. Such advantages were then applied to broader applications, including the use of closed-loop plastic across many of Dell’s product lines. Due to the effective measure taken by dell, findings have shown that closed-loop plastic from Dell has an environmental benefit of 44 percent higher than virgin plastic. Improved reuse of technological devices in general reduced environmental impacts.

Lesson learned

The lesson that can be learned based on this case study is that business needs to be aware of the current surroundings that are happening especially related to environmental. Over the past few decades, our planet’s pollution and our environment’s destruction have risen at an alarming rate. We have seen natural disasters hitting us more often in the form of flash floods, tsunamis and cyclones, because our actions were not in favor of protecting this planet. In the rapid technological advancement, customers are now well informed and this move has created a constantly shrinking window for businesses to connect with their customers and clients (Julie Brown,2018). With the rise of social media, awareness can be spread easily and it is an advantage for businesses to connect and create a bond with their clients through that medium.

Furthermore, dell has taken the risk on trying new inventions in terms of its sustainable supply chain where chances of failure can occur but they have conducted the change on its supply chain where their interest is aligned with most people nowadays where environmental is a sensitive issue and governments are now implementing carbon footprint in order to combat environmental issues. It can be said Dell has made the right decision to go green at the right time and has succeeded in creating more skilled jobs, growing to manufacture and improving the local economy. It can be said that innovative solutions have the ability to save businesses and consumers on a global scale both economically and environmentally.

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Dell Case Study: Circular Economy and Closed-Loop Ecosystems. (2019, Dec 16). Retrieved from https://studymoose.com/dell-case-study-circular-economy-and-closed-loop-ecosystems-essay

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