Packaging: The Common Thread in Collecting IT Assets

by Shawn Stockman, OnePak

Reverse Logistics Magazine, March/April 2007

One factor often overlooked in successful reverse logistics is packaging during the asset collection process. Whether your customers are shipping goods back to a company for return, repair or for end-of-life disposition, packaging plays an important role in reducing the risks of damage and theft.

In the Summer/Fall 2006 issue of this magazine, Cindy Brannon’s article about IT asset disposition touched on the absence of uniform packaging standards. This article will explore the possibilities and benefits of uniform packaging for collecting IT assets.

Standardizing Packaging for Returns

For electronics that are shipped for return or repair, it is critical that the item is packaged in a box the appropriate size with sufficient padding to avoid damage. If the customer no longer has original packaging, the choice for a box and padding is often left to the consumer, which increases both the consumer’s cost and risk of damage.

Why not offer the customer the option to have proper packaging sent to them? If the company handling the return provides the package used to ship the asset, the entire collection process is simplified and expedited. Depending on the value of the item and the customer, OEMs may want to offer this service for a fee or simply include it in the cost of new items.

End-of-Life Asset Collection

UThe packaging challenge for end-of-life asset collection is shared by (at least) four parties with a stake in a successful reverse logistics process:

• The OEM, who wants to remove old assets in order to install new assets promptly
• The end customer, who is trying to dispose of their electronic equipment
• The logistics providers, who are trying to remove assets efficiently from the customers’ premises and deliver them to the service provider
• The service provider, who will reuse, remarket or recycle the assets

Other than the asset itself, the packaging is the most common thread that affects all parties involved. If assets are improperly packed or are packed in incorrect packaging, all parties suffer. Proper packaging benefits all parties, and the cost is offset by increased efficiencies in the logistics process.

Each player in the asset recovery process has different priorities, however. When an OEM is working with the customer to arrange the removal of used equipment to make way for new, the most important factors are cost and speed. The OEM wants the old assets removed quickly and inexpensively as a value-added service to sell new products.

To the end customer, convenience is the major factor. For example, a bank with 300 assets scattered across 20 locations may not want to tie up staff time packing computers. And even if they do choose the self-service option, most do not have the right size of boxes, padding and packing tape available to handle the job. They simply want someone to come and pack it up and haul it away.

The logistics providers have their own issues. When their staff arrives on site, reality rarely matches what the customer had estimated. They may come to pick up 100 IT assets and there are 150 (plus miscellaneous cables, mice, keyboards, etc.). They may arrive to find them in nice stacks on pallets, or they may have to search the premises for the old equipment and crawl under desks to unplug them. Truck drivers may be stacking laptops on pallets in a way that will crush the majority of their LCD screens because no one ever explained that laptops should stand on edge for shipping.

Service providers who accept used IT assets for reuse, demanufacturing, remarketing or recycling also have standards that need to be met. Most do not want pallets that are inadequately shrink-wrapped with equipment poking out the sides, or dissimilar units stacked precariously so that they pose a risk to their warehouse staff once unloaded (if they make it through the shipping process in one piece). Packaging must be easy to open and durable enough to move around the warehouse.

According to Steve Andon, CEO of OnePak, Inc., Dell is one of the few OEMs that provides a shipping kit to the client who wants to dispose of an item at the end of its life. “Other OEMs charge the client about $30 to send them just a prepaid shipping label with packing instructions. The client must provide the box and all packing materials. This lack of standardized packaging significantly impedes the success of the entire asset recovery process. Standardized packing increases the speed, efficiency and value of collecting IT assets.”

A summary of various consumer computer take-back programs can be found at www.computertakeback.com.

Packaging Solution

There appears to be a need for a packaging system that could be:

• locked to ensure against theft
• sealed for quick visual inspection for signs of tampering
• serialized or bar coded
• configured with sufficient padding for laptops, CPUs or other data devices sent onsite ahead of pickup for either do-it-yourself packing or for a service to prepare assets for shipping

A reusable packaging system could be similar to the “pod” concept in the moving industry, where a reusable crate is sent to the user’s site, the user (or a service) packs it up, and (in the case of IT assets) a shipping company comes to pick it up when ready.

In some cases a do-it-yourself approach to packing IT assets that contain sensitive data is preferable to having anyone else do it. It depends on who you trust. If the OEM sends a logistics firm to your site, you are in a position in which you must trust the OEM’s judgment of the firm’s credibility. If the leasing company installs new equipment and removes the old, you must trust that they will handle your data assets appropriately. Even the aftermarket service provider receiving your assets to erase data and prepare them for remarketing or recycling must be trusted to handle sensitive assets appropriately.

One way to discern the legitimacy of any firm that may handle your IT assets is to look for a certification from The National Association of Information Destruction (www.naidonline.com). Their certification program involves an annual audit process, as well as unannounced audits, that verify compliance with standards for a secure destruction process including such areas as security, employee hiring and screening, operational destruction process, and insurance.

Aside from this certification, one should confirm that any company handling your IT assets is insured with professional liability insurance. However, there is currently no certification that covers the companies transporting your assets (nor is there a legitimate standard for the packaging in which they travel).

At present, the best solution to minimize risk would be to have trusted onsite personnel inventory and pack IT assets into proper packaging for shipping. Make sure the recorded inventory matches the packing slip, and require the aftermarket service provider receiving your assets to verify that what they receive matches what you sent.

Proper packaging creates exponential savings in cost, labor, and exposure to risk.

Reverse Logistics Magazine, March/April 2007