June 2012

IT Asset Disposal Logistics

It is about LOGISTICS!!

By: Keith Deinert, LifeSpan Technology Recycling

80% of the financial conversations I have with companies interested in IT Asset Disposition (ITAD) services surround the following:

  • What is the cost for electronics recycling?
  • What are you going to pay me for this equipment?
  • What do you charge for data destruction and auditing?

But the other 20% of people “in the know” include LOGISTICS & INTERNAL LABOR into a total cost analysis of IT equipment disposition.

You would be surprised to find out how many people I speak with negotiate on pennies per lb for our electronics recycling rates but overlook the savings they obtain through using a company with a national footprint that coincides with their company’s own footprint; minimizing the impact of logistics on a total cost basis. As a matter of fact, logistics is likely to have the highest cost per asset of all the expenses tied to the disposition process.

So why don’t people pay more attention to logistics? Because to properly estimate this expense organizations need to provide:

  • Actual pickup weight
  • Actual pallet counts
  • How many man hours are required (for packout projects)

This sounds simple but the reality is that most companies don’t have this information as they accumulate material in storage/equipment rooms, closets, offices, basements, etc and rarely have the material palletized let alone weighed. Thus for an ITAD firm like LifeSpan to estimate a logistics expense, they need to make assumptions based on the information available and hedge their bets so as not to get burned.

Does it make sense to pay extra for packout services? Well that depends. Simply stated, if you multiply the internal man hours needed to palletize the equipment on your own by their hourly rate vs. the up charge for packout services your answer gets more visible. You then have to consider, if it is cheaper to perform this function internally do you REALLY want your tech staff pulled from other tactical functions that have more importance to your organization.

What can you do to help the issue? Information is king so share as much as you have. This is no time to hold back.

  • If you have an asset list with the quantities of IT equipment by product category (PCs, laptops, monitors, servers, telephony, etc) along with make and model information…provide it. If not see if you have the internal resources to get it or alternatively ask your ITAD provider if they have any personnel that can help acquire this information for you.
  • Make sure you advise where the IT equipment is located in your building, freight elevator access, loading dock access, hours of availability, and any COI requirements that may exist.
  • To minimize expense, try to avoid weekend or after hours pickups and if possible
  • IMPORTANT: Advise if any of the IT assets still have sensitive data on them and discuss the chain of custody concerns with your provider. The level of risk associated with the possibility of data being compromised should be in sync with the logistics solution for the pickup. There are many options for the organization to minimize the risk upfront as well as the ITAD provider to provide secure solutions from pickup to facility that are available and worth dialog.
  • A post project review is also a good idea to help insure expectations were met and any opportunities for improvement are discussed for future projects.

The takeaway?

  • Logistics can be expensive. Don’t forget to assess this element into your total cost of IT asset disposition.
  • Be as transparent about the state and nature of the equipment as possible.
  • Work WITH your ITAD provider to build a knowledge base of your requirements and develop best practices and procedures that can be use for future needs.

If you would like to learn more about this topic or LifeSpan’s ITAD EKG Assessment Program, feel free to contact me at:

Keith Deinert
Managing Director
LifeSpan Technology Recycling
Keith.deinert@lifespanrecycling.com
401.662.9047

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