The forces shaping an industry

As we move deeper into 2018, the electronics recycling landscape continues to evolve. Issues such as manufacturer compliance, effective data destruction and data breach prevention have become top-of-mind concerns for recycling customers and are now essential elements of the responsible electronic recycling process. For companies in the industry unwilling to address these issues, it’s been a struggle. But for those embracing change as opportunity, it’s clear that the current trends in electronic recycling pose great promise for our industry.

A steadily growing stream

Regardless of regulatory changes, shifting trends in reuse and refurbishment or the increasing need for appropriate management of data, one thing that remains constant is the steady growth of electronic devices that are discarded by businesses and consumers each year. Cellphones are typically replaced every 18 months or less, whereas desktop computers last the average consumer about two years. TVs last much longer—about 10 years—but DVD players are usually tossed in the trash after only two years.

Based on this information, it’s not surprising that in the U.S. alone more than 100 million cellphones are thrown away every year. The U.S. also gets rid of 20 million TVs and 41.1 million computers every year. Overall, the average family spends about $1,400 each year on electronic devices. As this trend continues, the e-scrap stream will continue to grow.

According to the U.S. Environmental Protection Agency (EPA), e-scrap continues to be the fastest growing segment of the municipal waste stream. Even though other types of waste are decreasing, the amount of e-scrap that is collected is rising by about 5 percent every year.

With the current movement of the information technology (IT) industry toward cloud computing and the increased reliance on tablets and mobile devices in the workplace and in schools, it is likely that refurbishment also will continue to spike for the long term. Refurbishing computers and laptops and even mobile phones will continue to increase as these devices enter the e-scrap stream in large volumes and countries around the world continue to require proper disposal.

Well-rounded ITAD companies are here to stay

The biggest trend we’re faced with as an industry is the increasing focus on comprehensive IT asset disposition (ITAD). Whether a device is being broken down for recycling, refurbished or reused, the primary goal of the ITAD process is to keep the data on these devices secure while protecting the environment from the harmful effects of e-scrap.

Customers are more attuned to the fact that they want to engage with ITAD companies that process electronics in facilities that are designed solely for this purpose.

If the device can be reused, it will not be destroyed. Instead, the ITAD company will destroy the data on it and sell the wiped device. It’s become understood that good ITAD companies use data destruction methods that are far more effective than what the average consumer is capable of using. Destroying data involves much more than simply overwriting the data; today, ITAD vendors destroy data in accordance with the Department of Defense and NIST (National Institute of Standards and Technology) Guidelines for Media Sanitization standards.

More businesses are seeking out the services of reliable ITAD vendors for other reasons, as well. For starters, cybersecurity threats should be on the mind of every business owner in the country. Every business—regardless of the business’ size or the industry it is in—should be concerned about the possibility of hackers accessing confidential data. ITAD vendors destroy the data stored on devices prior to disposing of them. This is the only way to ensure that a client’s information—and their customers’ information—is protected.

Of course, ITAD companies also keep hazardous materials out of landfills.

But using an ITAD vendor is not only the right thing to do for the environment, it is also a way for many businesses to save money by avoiding fines. The discount retailer Dollar General learned this the hard way after being ordered to pay $1.13 million as part of a civil settlement for improperly disposing of electronics. The retailer was sending electronic devices and other hazardous materials to local landfills instead of properly disposing of them with an ITAD vendor.

Businesses may even be able to make some side revenue by working with an ITAD vendor that shares the profits made after reselling components from the electronic devices.

Businesses within certain industries, such as those involved in health care or finance, have a legal obligation to properly destroy data when getting rid of old electronic devices. For instance, every business in the health care industry must comply with the Health Insurance Portability and Accountability Act (HIPAA) when it comes to data destruction. To comply with HIPAA, businesses must implement effective policies and procedures that address how data will be protected during the disposal of IT assets. Many health care businesses turn to reputable ITAD vendors to ensure they are compliant with this law.

More than 100 million cellphones are thrown away every year in the U.S.

The keys to a successful future

For the players in the recycling or electronics recycling industries, what are the keys to success moving forward? Here’s a checklist of some of the primary factors and ingredients.

Provide nationwide solutions. The big customers that help sustain us in this industry are rarely limited to one state’s borders. Offer a multifacility, certified, nationwide ITAD solution—and if that’s beyond your capacity, partner with organizations that can.

Establish a global network of partners. As the world gets smaller, don’t limit your capabilities to the U.S. Build effective partnerships that broaden your scope on a global level. Companies are looking at single providers globally to manage their ITAD needs. There is a distinct trend among customers to reduce the number of ITAD/e-scrap suppliers they may currently be using.

Keep innovating technologically. Long ago, ERI made a commitment to innovative technology, and I believe that’s one of the main reasons we’ve been able to stay ahead of the game. But you don’t have to have the world’s largest and most sophisticated shredders, like ERI does, to be successful. In an industry driven by and focused on technology, providing innovative solutions is a must.

Process effectively. To maintain your customers’ confidence as well as your bottom line, it is important to have your executive team regularly assessing and auditing your operations to ensure you are processing efficiently and reducing costs. The sustainability of your organization will be based upon your company’s ability to increase revenue and reduce costs.

Invest in a high-end commodity process. If your commodity extraction process is running at maximum efficiency, the cleanliness of your final commodities will enable you to pass cost savings along to customers from an end-of-life perspective.

Communicate with manufacturers. As technology evolves, gets smaller and changes so dramatically from year to year, it is essential to maintain a consistent dialog with manufacturers to make sure you understand the new products that are coming and how they will need to be processed at end of life.

Be diverse. For success in 2018, it’s essential to offer a comprehensive suite of services to your customers. It is rarely enough today to be a recycler of electronics. Providing that, plus data security and the ability to meet and consult upon environmental and data security regulatory issues (be they state or federal regulatory concerns) is key.

Offer supply chain management. The organizations that make up a supply chain are linked together through physical flows and information flows. The world of electronics recycling is no exception. This goes back to a high level of interface and communication with your customers to determine their needs and with manufacturers to stay abreast of what has and will be entering the supply chain.

Manage the details to maximize refurbishment and reuse options. Employ dedicated staff of carefully qualified employees who specialize in complete asset refurbishment and resale, including the provision of testing and auditing services to determine the usefulness of each item and to capture important tracking information from each major component. Also, because of the sensitive information contained in almost all electronic memory components, make sure to follow a stringent data management process to ensure that sensitive data are not inadvertently compromised.

Help customers understand the importance of data breaches. Some companies are ignoring the problem altogether, but others are making a genuine effort to prevent data breaches. However, the companies that are investing in cybersecurity are still being targeted by hackers. Even though cybersecurity awareness is growing, this won’t prevent future attacks unless decision-makers are willing to listen to IT experts and implement their recommendations. Become certified by the Phoenix-based National Association for Information Destruction (NAID) and let your current and future customers know of the safety net you are providing to them.

Always do the right thing. We understand as well as anyone that fluctuating commodity prices and other issues pose fiscal challenges to our industry, but it is essential to remain ethical and always do the responsible thing, even if it delivers a ding to the bottom line. Shipping materials to be processed overseas, for example, is a shortcut not worth taking. We see too many in our industry resorting to this, and when they get caught, the consequences can be devastating. Doing the right thing, even at the expense of temporarily challenging the bottom line, will ultimately be rewarded with a healthier bottom line in the long run and will engender longer-term trust and loyalty with your customer base.

ERI Chief Marketing Officer and co-founder Kevin J. Dillon has helped to build ERI from the ground up. The company bills itself as the nation’s leading recycler of electronic scrap and the world’s largest information technology asset disposition (ITAD) and cybersecurity-focused hardware destruction company, certified to demanufacture and recycle every type of electronic scrap in an environmentally responsible manner. More information on the company is available online at https://eridirect.com.