Analysis

Smart Measures in Turbulent Times: The Economical & Ecological Benefits of Asset Recovery

6th June 2011
ES Admin
Over millions of tonnes of electronic waste are produced annually in Europe and sadly the vast majority of this is still inadequately disposed of. In response legislation is being put in place to counter this, forcing enterprises to make alterations to how they approach managing the equipment inventories. Nick Clarke of test equipment sourcing and asset recovery specialist Livingston looks at some of the implications and shows how environmental impact as well as operational/capital expenditure can be lowered substantially by redeployment of redundant test equipment/instrumentation elsewhere.
As technology continues to evolve, the manufacturing and test requirements associated with it must also change. Manufacturers, telecommunication carriers and system integrators all regularly find themselves realigning capacity and equipment as utilisation decreases below a point where it actually proves economical. The equipment still has all the same overheads as it did before (maintenance, security, insurance, etc), but no longer generates any revenue with which this can be offset.



Companies in this position have two options:



1. Carry out increasingly costly and time consuming disposal procedures.

2. Leave these items to take up space in storage depots, where they continue to contribute to the day-to-day running costs of the company.



Somewhat ironically the residual value inside such equipment could actually yield new funds rather than being a drain on resources. Items that are underutilised can still be of benefit to the organisation that originally purchased them, however this can often be overlooked or hampered by internal accounting procedures.



It is possible for large multinational companies, with test and production operations all over the world, to have hardware which has ceased to be useful in its current location, but could still have value if transferred to a site elsewhere in the organisation or alternatively placed on the open market. By implementing an asset recovery strategy such companies can maximise the capital investment they make.



The problem is that companies looking to carry out asset recovery do not generally have:



1. The necessary mechanisms in place.

2. The available manpower.

3. The specialist knowledge needed.



More importantly from these key points, it’s a distraction from their core business activity and the result is they miss out on the opportunity to satisfy demands internally – the location holding equipment continues to spend money looking after items it has ceased to have use for, while other locations plough funds unnecessarily into purchasing new products to meet their own requirements. In order to avoid this, equipment owners need to seek out specialist support, rather than trying to do it themselves. Outsourcing such functions means the company’s human resources remain focussed on its core business.



Through its asset recovery program, Livingston allows redundant test hardware to still be of benefit, so it is not scrapped needlessly. This means less e-waste is brought into the environment and further natural resources are not consumed in the manufacture of new equipment. Cash reserves can be bolstered, either by reallocating equipment internally, selling it to other parties, or renting it out.



One of the companies to gain from this program is leading cell phone brand Nokia. As mobile communication technologies develop at a phenomenal rate, with new manufacturing techniques being adopted all the time, the company constantly aligns its research and production facilities whilst investing in new state-of-the-art equipment.



Livingston is able to deliver solutions that mean Nokia ensures its equipment is employed to the highest degree of cost effectiveness and profitability is maximised. Livingston has been able to:



1. Promote the availability of Nokia’s older equipment so it can be redeployed within its organisation worldwide.

2. Provide the logistical means to transfer equipment to the required Nokia site.

3. When it has not proved possible to find a new home the equipment within Nokia’s global operations, Livingston has been able to offer it for sale externally.



During global economic turbulence, smart companies need to take smart action to avoid wasting money and resources across their operations. Through its collaboration with Livingston, Nokia has seen over 4,000 items sold or relocated, in addition items are also donated to educational establishments (schools, colleges and universities). To date this has resulted in both considerable cash generation and avoiding multiple new purchases for the company, equating to many millions of dollars in overall savings. During a period of almost 3 years, since Livingston first took responsibility for managing these assets, not a single item has had to be scrapped.



The industry has now recognised that it cannot afford to waste existing assets. By extracting out the remaining financial worth that is left in unused equipment it is possible for companies to generate cash that can be reinvested into their ongoing operations and also reduce e-wastage levels. This means that companies are able to be more ecologically responsible, while at the same time actually boosting their funds. Livingston is uniquely placed to offer support to companies looking to carry out technology asset recovery, as it is the world’s only provider of these services to have proficiency in both test equipment sourcing and plant management solutions.

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