24
Dell
The Business Case for a Sustainable Supply Chain
Louise Koch, Stephen Roberts, and Justine Esta Ellis
Introduction
Dell
is
one
of
the
world
’
s
largest
computer
manufacturers
and
technol-
ogy
companies.
The company sells a wide range of IT hardware, software
products, and services for enterprise, government, small business, and con-
sumer markets.¹ As a privately held company, Dell has the freedom to pursue
a longer time horizon and to commit to changing how it uses its resources.
The principle of ef
fi
ciency is central to the Dell business model and informs
the company
’
s approach to resources, sourcing, and waste management.
Pain Points in the Ecosystem
Dell
’
s commitment to ef
fi
ciency has prompted the company to take on the
timely challenge of improving e-waste disposal throughout its business.
E-waste,
that
is,
discarded
electrical
and
electronic
equipment,
is
the
world
’
s fastest-growing waste stream.² Rapid technology innovation and
ever-shortening
product
lifespans
are
contributing
to
the
increase
of
e-
waste.³ According to a United Nations
’
University report, the amount of
global
e-waste
reached
41.8
million
tonnes
in
2014.
⁴
To
compound
matters,
e-waste
has
a
low
overall
recycling
rate,
which
means
that
unwanted equipment remains unused.
Louise Koch, Stephen Roberts, and Justine Esta Ellis, Dell: The Business Case for a Sustainable Supply Chain
In
Putting Purpose Into Practice: The Economics of Mutuality
. Edited by: Colin Mayer and Bruno Roche, Oxford
University Press (2021). © Oxford University Press Some rights reserved. This is an open access publication,
available online and distributed under the terms of the Creative Commons Attribution
–
Non Commercial
–
No
Derivatives 4.0 International licence (CC BY-NC-ND 4.0), a copy of which is available at http://creativecommons.org/
licenses/by-nc-nd/4.0/. Enquiries concerning use outside the scope of the licence terms should be sent to the
Rights Department, Oxford University Press. DOI: 10.1093/oso/9780198870708.003.0024
Responsible e-waste disposal is not only important from an environ-
mental perspective, but also makes good economic sense.
⁵
Vast amounts
of
gold,
for
example,
exit
the
economy
due
to
low
recycling
rates,
but
increasingly there is an opportunity to recapture that value, as a tonne of
computer
motherboards
contains
more
gold
in
it
than
a
tonne
of
gold
ore. In terms of scale, the material value of global e-waste was estimated
to
be
€
48
billion
in
2014
alone.
⁶
This
underutilized
resource
has
a
vast
‘
untapped
potential
to
create
a
more
sustainable,
ef
fi
cient
product
ecosystem
’
.
⁷
The
circular
economy
takes
the
traditional,
linear
model
of
‘
take,
make,
and
dispose
’—
which
moves
products
from
design
to
factory
to
consumer
to
land
fi
ll
—
and
bends
it
into
a
more
ef
fi
cient
closed-loop
ecosystem.
Unwanted
used
electronics
can
be
taken
back
for
refurbish-
ment and then resold on the secondary market. Products beyond repair,
or those that are no longer economical to repair, are recycled to allow for
precious
and
scarce
materials
to
be
recovered.
Recycled
content
can
either be incorporated into the design and manufacturing of new prod-
ucts or sold for others to use.
Research
shows
that
approximately
30
per
cent
of
consumers
have
technology
products
lying
around
the
house
unused,
and
half
of
con-
sumers
are
unsure
about
what
to
do
with
their
old
electronics.
⁸
According
to
Dell,
similar
situations
exist
with
businesses
warehousing
old
equipment.
Take-back
options
make
it
easy
for
a
wide
variety
of
customers
to
dispose
of
their
old
electronic
products
in
a
responsible
manner. This measure ensures that unwanted electronics get reused or, if
at the end of life, properly recycled.
Plastic
is
one
of
the
most
useful
and
important
materials
in
modern
society.
It
is
popular
in
computers
due
to its
durability,
ease
of
fabrica-
tion
into
complex
shapes,
and
electrical
insulation
qualities.
⁹
However,
plastic
recycling
remains
challenging
and,
as
a
result,
the
material
con-
stitutes
a
major
contributor
to
land
fi
lls
and
to
nonpoint
source
pollution
—
pollution
from
many
different
sources.
The
production
of
traditional
plastics
also
uses
a
substantial
amount
of
fossil
fuels.
Manufacturing
plastics
from
fuel
is
resource
intensive,
requires
large
amounts
of
energy,
and
releases
relatively
high
levels
of
CO
₂
emissions
in the process. Recent research has shown that our current use of plastics
293
will
become
unsustainable
if
we
do
not
take
steps
to
improve
recycling
and reduce plastics
’
usage.
Using
secondary,
recycled
plastic
as
feedstock
for
new
computers
presents
one
possible
solution.
With
the
fast
pace
of
innovation
and
product
upgrades
in
the
ICT
sector,
recycled
content
can
reduce
the
environmental toll of manufacturing with virgin materials. The circular
economy
and
the
development
of
secondary
raw
material
markets
are
high
on
the
European
agenda.
Nevertheless,
it
remains
challenging
to
fi
nd
a
suf
fi
cient
supply
of
high-quality
post-consumer
recycled
plastics
that
meets
the
technical,
economic,
and
aesthetic
requirements
of
ICT
products manufacturers.¹
⁰
Business Strategy
In response, Dell is taking steps towards creating a
‘
circular
’
supply chain
(see also Interface, Chapter 25). In addition to environmental concerns,
the
increased
volatility
in
commodities
and
growing
pressure
on
resources have alerted Dell to the business necessity of rethinking mater-
ials
and
energy
use.¹¹
In
2013,
Dell
committed
to
putting
a
total
of
50
million
pounds
weight
of
recycled
materials
back
into
its
products
by
2020.
The
company
reached
this
goal
at
the
beginning
of
2017
and
is
continuing to scale its efforts.
For
Dell,
sourcing
post-consumer
recycled
plastics
from
the
market
and
building
a
new,
stable
closed-loop
supply
chain
for
plastics
from
used electronics collected through take-back programmes present viable
and affordable alternatives to using virgin materials. Rather than focus-
ing exclusively on individual challenges, Dell has taken steps to approach
their
supply
chain
from
a
broader,
systemic
perspective.
Most
recently,
this
has
included
expanding
its
efforts
to
also
address
precious
metals,
such
as
gold.
Jennifer
Allison,
director
of
supply
chain
sustainability
at
Dell, summarizes the company
’
s current business strategy:
We
’
re
talking
about
systems
—
not
just
products,
programmes,
or
ini-
tiatives. Looking at the whole system is when change begins to make a
signi
fi
cant
difference.
Technology
is
a
great
tool
for
measuring
and
294
,
,
analysing
systems,
understanding
processes,
and
identifying
inef
fi
ciencies.¹²
In this way, Dell takes a whole ecosystem view of its product life cycles.
This approach is transforming the design of products and services. Dell
’
s
life-cycle approach aims to keep viable products and parts in circulation
for
longer
periods
of
time.
It
also
harnesses
global
efforts
to
reuse,
refurbish,
and
resell
products
and
parts
to
extend
their
lifetimes
and
to
recycle them at the end of life.
Product
design
emphasizes
ease
of
repair
and
recyclability
from
the
beginning. Dell also looks continuously for ways to incorporate sustain-
able
materials,
such
as
recycled
plastic
and
reclaimed
carbon
fi
bre,
into
products and packaging.¹³
The Take-Back Programme
Dell
has
the
world
’
s
largest
electronics
take-back
programme,
which
spans more than seventy-
fi
ve countries and territories. The programme
has
recovered
approximately
800,000
tonnes
of
electronics
since
2008.
For
commercial
customers,
Dell
offers
a
full-spectrum
of
logistics
and
disposal capabilities via the Asset Resale and Recycling Service. Current
capabilities
include
data
security,
on-site
shredding,
recycling,
and
full
traceability reporting. Dell also makes it easy for individual consumers to
recycle
by
partnering
with
freight
companies
to
provide
free
mail-back
recycling
of
Dell-branded
equipment.
In
many
countries,
the
pro-
gramme will even pick up used equipment from a customer
’
s home.¹
⁴
Another
programme designed
to
make
the
recovery
of obsolete
elec-
tronics easier and more accessible is the Dell Reconnect Partnership with
Goodwill,
a
not-for-pro
fi
t
organization
committed
to
helping
people
become
independent
through
education
and
training.
The
Reconnect
Programme
allows
people
to
drop
off
any
brand
of
used
electronics
to
more
than
two
thousand
participating
Goodwill
locations
across
the
United States. Dell Reconnect accepts any brand of computer equipment
in any condition from consumers and provides free recycling services.
295
Dell
returns
all
proceeds
to
Goodwill
in
order
to
help
support
Goodwill
’
s mission of putting people to work.¹
⁵
By participating in this
initiative, customers simultaneously help protect the environment, bene-
fi
t the community, and receive a receipt for tax purposes. In this way, the
programme helps both the customers and the business.
The
donated
equipment
has
value
as
a
whole
system,
as
parts,
and
sometimes
as
raw
materials
such
as
metals,
plastics,
and
glass.¹
⁶
If
the
equipment
can
be
refurbished,
Goodwill
sells
it.
If
not,
the
end-of-life
product
is
sent
to
Wistron,
one
of
Dell
’
s
recycling
partners,
for
asset
recovery in the United States. Metals such as tin, gold,¹
⁷
and tungsten are
re-sold in the commodities market. To complete the closed loop, plastics
are
sorted
and
shipped
to
China,
turned
into
pellets,
and
mixed
with
virgin plastics for use in new Dell products.¹
⁸
Closed-Loop Recycled Plastic Supply Chain
Dell
’
s 2020
‘
Legacy of Good
’
sustainability plan set the goal of incorpor-
ating 50 million pounds weight of post-consumer recycled-content plas-
tics
and
other
sustainable
materials
into
Dell
products
by
2020.¹
⁹
Dell
met this target ahead of schedule in early 2017.
It started with the launch of Dell
’
s closed-loop recycled plastics supply
chain in 2014. Since then, the company has used more than 9,750 tonnes
of closed-loop plastics in over 125 products. These products include
fl
at-
panel monitors, desktops, and all-in-one computers.
Run
in
conjunction
with
various
supply
chain
partners,
the
pro-
gramme
consists
of
collecting,
recycling,
and
using
e-waste
to
make
new
Dell
products.²
⁰
It
begins
with
sorting
plastics
out
of
the
various
take-back streams, further processing them, and then sending them to a
manufacturing
partner
in
Asia.
The
plastics
are
then
melted
down
and
moulded
into
new
parts
and
computer
components,
thereby
creating
a
closed-loop system. The whole process
—
from the time the equipment is
received
for
recycling
to
the
time
the
plastics
are
back
in
a
customer
’
s
hands as part of a new product
—
takes just under six months. The closed-
loop
system
also
provides
businesses
with
a
price
more
stable
than
the
cost
of
virgin
materials,
which
fl
uctuates
with
the
price
of
oil.
It
also
296
,
,
reduces
the
company
’
s
dependence
on
those
environmentally
costly
virgin materials. Furthermore, by reusing plastics already in circulation,
Dell cuts down on e-waste, reduces carbon emissions, and helps drive a
circular
economy
for
IT.
The
closed-loop
process
yields
an
11
per
cent
lower
carbon
footprint
than
a
process
using
virgin
materials,²¹
and
creates
products
that
are
better
for
the
environment,
which
is
increas-
ingly
what
Dell
customers
demand.²²
Dell
was
also
the
fi
rst
PC
manu-
facturer (January 2018) to use recycled gold from e-waste in its products.
Working
with
the
data
analyst
TruCost,
it
found
that
this
closed-loop
process can cause 99 per cent less environmental damage and avoid $1.6
million in natural capital costs per kilogram processed (US$3.68 million
for
the
pilot
project
alone)
when
compared
to
gold
mining.
The
same
study showed closed-loop process can avoid 41 times the social impacts
of gold mining.
Dell
’
s
leadership
in
recovering
and
reusing
plastic
from
used
com-
puters
constitutes
an
important
step
in
moving
the
larger
electronics
industry
towards
a
circular
economy.
Louise
Koch,
corporate
sustain-
ability
director in
EMEA
for
Dell, describes
the
impetus
for initiating
a
closed-loop system:
Dell
’
s programme is driven by both an effort to improve ef
fi
ciency
—
a
principle that goes back to its founding ethos and business model
—
as
well as a commitment to reducing environmental impact.²³
The
use
of
closed-loop
plastics
may
create
a
demand
for
plastic
from
used
computers
and
thereby
increase
the
level
of
plastic
recycling
from
electronics. This, in turn, generates new jobs and opportunities for those
in
the
nascent
industry,
all
while
staying
true
to
Dell
’
s
founding
principles.
Challenges in Moving to a Closed-Loop Recycling System
In
moving
from
the
traditional
take
–
make
–
dispose
linear
supply
chain
to a circular supply chain, Dell has had to overcome a number of hurdles.
297
One
of
the
biggest
challenges
that
Dell
faced
with
the
closed-loop
recycling was identifying which types of plastic can be incorporated back
into new products. As Scott O
’
Connell, director of environmental affairs
for
Dell,
puts
it,
‘
When
dealing
with
plastics,
getting
the
properties
equivalent or better to virgin materials isn
’
t easy . . . But this is a challenge
we
’
ve been able to overcome with engineering know-how.
’
²
⁴
Dell worked
with
partners
to
test
different
approaches.
Testing
revealed
that,
due
to
mechanical
and
aesthetic
considerations,
a
blend
of
recycled-content
with virgin plastic produces the best outcomes.
Another
challenge
involves
establishing
a
reliable
closed-loop
supply
chain.
As
O
’
Connell
describes,
‘
We
had
to
make
sure
that
we
had
suf
fi
cient volume of product coming in to be able to yield enough plastics
to put into a mainstream Dell product.
’
²
⁵
Supply of products and plastic
derives
from Dell
’
s own
sources,
which
adds a
greater degree
of insight
and
security.
However,
for
the
closed-loop
recycling
to
work
and
scale,
Dell
needs
security
of
supply,
which
can
be
dif
fi
cult
to
attain
with
fl
uctuating numbers of products collected through take-back. Shrinking
form
factors
—
the
fact
that
there
is
less
plastic
per
item
recycled
as
electronics
become
smaller
—
further
complicate
the
situation.
Hence
Dell
needs
to
continue
to
drive
increasing
participation
in
take-back
programmes, while at the same time exploring other means of acquiring
recycled-content materials.
Transporting materials poses an additional challenge. Dell customers
are
all
over
the
world,
which
means
that
take-back
initiatives
must
accommodate the global scale. While Dell has a small closed-loop plas-
tics
supply
chain
in
Europe
already
and
is
exploring
ways
to
scale
in
other
geographies,
materials
need
to
be
collected
in
suf
fi
ciently
large
amounts
to
make
shipping
to
a
centralized
processor
worth
the
eco-
nomic and environmental costs. This involves logistics, regulations, and
other
considerations.
In
some
cases,
even
the
de
fi
nition
of
the
material
being
moved
can
affect
the
viability
of
closed-loop
efforts:
is
recycled
plastic labelled as waste or a raw material, for example?
The
fi
nal
challenge
for
Dell
is
to
demonstrate
the
bene
fi
ts
of
closed-
loop recycling to customers. Ultimately, the products look and perform
exactly
the
same
as
those
made
from
virgin
materials.
Dell
must
com-
municate the value proposition to customers by highlighting the amount
298
,
,
of
recycled
content
in
the
fi
nal
product,
the
closed-loop
nature
of
the
materials, and the bene
fi
ts to the customers
’
own sustainability goals.
Performance
Since
2008,
Dell
has
taken
back
more
than
1.76
billion
pounds
(nearly
800,000
tonnes)
of
used
electronics
and
since
mid-2014,
when
Dell
launched
the
closed-loop
plastic
recycling
programme,
it
has
created
nearly
5,000
tonnes
of
plastics
from
recycled
computer
parts.
Dell
has
saved more than $1.8 million from this process, and the carbon footprint
of
circular
plastics
is
11
per
cent
smaller
than
that
associated
with
the
manufacture of virgin plastics. Dell now uses circular plastics in approxi-
mately 125 products across millions of units globally.
Together
with
TruCost,
Dell
has
completed
an
evaluation
to
under-
stand the gains from moving away from virgin plastics. One of the most
useful ways for companies to assess the risks associated with new initia-
tives
is
to
quantify
the
environmental
impacts
generated
by
their
activities
—
internal operations, upstream supply chain, and downstream
product use and disposal
—
and then convert those impacts into monet-
ary values.²
⁶
The monetary value helps identify the value not captured in
traditional
fi
nancial markets and incorporates these considerations into
decision-making.²
⁷
Findings showed that Dell
’
s closed-loop plastic has a 44 per cent ($1.3
million
annually)
greater
environmental
bene
fi
t
than
virgin
ABS
plas-
tic.²
⁸
In particular, increased computer recycling lessened environmental
impacts.
The
research
found
that
recovering
and
recycling
the
used
plastics
from
computers
minimized
‘
human
health
and
ecotoxicity
impacts
’
and reduced the overall emission of hazardous substances.²
⁹
Dell
has
also
begun
to
incorporate
social
impact
metrics
into
its
valuation
framework.³
⁰
Emergent
strategies
such
as
analysing
activities
for
their
use
of
social
and
human
capital
are
likely
to
be
an
area
for
further
re
fi
nement
and
application
in
the
future.³¹
At
present,
Dell
is
combining both environmental and social impact metrics into its process
in order to help tackle the challenge of responsible e-waste disposal.
299
Prognosis
•
On
a
global
scale,
there
is
still
huge
potential
to
scale
up
circular
resource streams in the IT sector and
beyond. Only 10 per cent of
the
plastics
produced
today
are
recovered
—
and
more
than
50
per
cent end up in land
fi
lls.
•
Dell
has
increased
the
use
of
recycled
materials
(both
closed-loop
and traditional post-consumer recycled materials) in new products
and plans to continue to scale the programme.
•
As
Dell
continues
to
scale
the
current
programme,
it
will
look
to
expand
into
reclaiming
and
reusing
other
materials.
Dell
has
already had success with using reclaimed carbon
fi
bre for products
and
is
currently
using
recycled
ocean
plastics
ink
made
from
cap-
tured diesel emissions for packaging.
•
Dell
will
also
look
at
how
ocean
plastics
or
other
solutions
can
be
used with products.
•
Dell
will
continue
to
measure
social
impact
using
the
same
meth-
odology, updating models for collection totals to follow form-factor
trends. It will report progress annually, building on this total toward
a cumulative 2 billion pounds by 2020.³²
•
Dell continues to lead conversations with governments and indus-
try
partners
about
recycling
and
circular
loops
on
a
global
scale.
Dell is open to innovative collaborations with even more customers,
partners, and governments in the coming years. Dell sees particular
opportunities
in
creating
partnerships
in
developing
countries
to
strengthen this ecosystem.
Dell
’
s
take-back
programme
presents
a
compelling
example
of
the
potential
of
circular
economy
and
closed-loop
systems
to
contribute
to
responsible,
mutual
business
practices.
Looking
towards
the
future,
creating closed-loop recycling programmes in developing countries rep-
resents
a
new
frontier.
Recycling
products
in
the
countries
from
which
they are
recovered
brings skilled
jobs, creates industry,
and strengthens
the
local
economy.³³
Using
its
proven
abilities
to
leverage
partnerships
and government relationships to create the infrastructure needed for new
programmes,
Dell
can
continue
driving
a
culture
of
recycling
in
300
,
,
communities
around
the
world.³
⁴
As
Dell
’
s
programme
example
high-
lights,
collaborative
approaches
have
the
potential
to
create
both
fi
nan-
cial
and
environmental
savings
for
corporations
and
customers
on
a
global scale.
Notes
1.
‘
Dell
Inc.
at
a
Glance,
’
Company
Pro
fi
le,
Vault.com,
http://www.vault.com/
company-pro
fi
les/computer-hardware/dell-inc/company-overview.
2.
Center for Security Studies, http://isnblog.ethz.ch.
3.
Baldé, C.P., Forti V., Gray, V., Kuehr, R., Stegmann, P. The Global E-waste Monitor
–
2017,
United
Nations
University
(UNU),
International
Telecommunication
Union
(ITU) & International Solid Waste Association (ISWA), Bonn/Geneva/Vienna.
4.
Rubin (2015).
5.
Kitsara (2014).
6.
Baldé et al. (date).
7.
Anya
Khalamayzer.(2017)
“
8
Ripple
Effects
of
the
Circular
Economy
in
2017
”
,
Greenbiz,
https://www.greenbiz.com/article/8-ripple-effects-circular-economy-
2017.
8.
‘
Switched
on
to
Value,
’
WRAP
Report,
November
2014,
http://www.wrap.org.
uk/sites/
fi
les/wrap/Switched%20on%20to%20Value%2012%202014.pdf.
9.
‘
Plastics:
Key
Materials
for
Innovation
and
Productivity
in
Major
Appliances,
’
American Plastics Council, http://infohouse.p2ric.org/ref/11/10437.pdf.
10.
‘
Best
Practices
in
Recycled
Plastic,
’
DigitalEurope
,
August
2016,
http://www.
digitaleurope.org/DesktopModules/Bring2mind/DMX/Download.aspx?
Command=CoreDownload&EntryId=2276&language=en-US&PortalId=0&
TabId=353.
11.
‘
Best Practices in Recycled Plastic,
’
DigitalEurope
.
12.
‘
Full
Circle
’
,
Institute
for
Supply
Management,
October
2016
—
Lisa
Arnseth
interview with Jennifer Allison.
13.
‘
Dell
on
the
Circular
Economy
’
,
March
2016,
http://i.dell.com/sites/content/
corporate/corp-comm/en/Documents/circular-economy-0316.pdf.
14.
‘
Dell
Recycling,
’
Dell
Inc.,
http://www.dell.com/learn/us/en/uscorp1/dell-
environment-recycling.
15.
‘
About
Us,
’
Goodwill
Industries
International,
Inc.,
http://www.goodwill.
org/about-us/.
16.
‘
Dell
Reconnect
—
How
It
Works
’
,
Dell
Inc.,
http://www.dell.com/learn/us/en/
uscorp1/corp-comm/how-it-works-reconnect.
17.
www.dell.com/gold.
301
18.
Hower (2015).
19.
‘
Best Practices in Recycled Plastic,
’
DigitalEurope
.
20.
Hower (2015).
21.
‘
Dell
2020
Legacy
of
Good
Plan
’
,
Dell
Inc.,
http://i.dell.com/sites/doccontent/
corporate/corp-comm/en/Documents/2020-plan.pdf.
22.
‘
Dell
’
s Closed-Loop Recycling Process
’
, Dell Inc., https://www.google.co.uk/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=
0ahUKEwjdkPqots7TAhXhKsAKHde7AF0QFggoMAE&url=http%3A%2F%
2Fi.dell.com%2Fsites%2Fdoccontent%2Fcorporate%2Fsecure%2Fen%
2FDocuments%2FClosed-LoopRecyclingfull.pdf&usg=AFQjCNHzBL-
F4ooKUkKnDSbgyHG8CLRzQ&sig2=bKIXDKjRA1YoWSQgh4H5yg.
23.
Louise Koch (Corporate Sustainability Lead for Europe, Middle East and Africa),
personal communication.
24.
Scott O
’
Connell (Dell, Director of Environmental Affairs), interviewed by Mike
Hower (Hower 2015)
25.
Ibid.
26.
Dell, Dell Inc., http://www.dell.com/en-us/.
27.
Ibid.
28.
‘
Valuing the Net Bene
fi
t of Dell
’
s More Sustainable Plastic Use at an Industry-Wide
Scale
’
,
Trucost,
September
2015,
http://i.dell.com/sites/content/corporate/corp-
comm/en/Documents/circular-economy-net-bene
fi
ts.pdf.
29.
‘
Valuing the Net Bene
fi
t of Dell
’
s More Sustainable Plastic Use at an Industry-Wide
Scale
’
,
Trucost,
September
2015,
http://i.dell.com/sites/content/corporate/corp-
comm/en/Documents/circular-economy-net-bene
fi
ts.pdf.
30.
Ibid.
31.
Ibid.
32.
‘
Dell
2020
Legacy
of
Good
Plan,
’
Dell
Inc.,
http://i.dell.com/sites/doccontent/
corporate/corp-comm/en/Documents/2020-plan.pdf
33.
Ibid.
34.
Ibid.
302
,
,
