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There's Money To Be Made At The End Of The Value Chain

IBM is earning some additional cash these days by using end-of-life products to produce usable parts for new products, according to Eric Karofsky and Lora Cecere of AMR Research, Inc. In an April 13 article, the authors state that IBM produced 1.5 million usable parts in its Asset Recovery Center in Endicott, N.Y.

On an annual basis this facility, originally built to ensure environmental compliance on disposal of excess and scrap products, transformed 28 million pounds of scrap into resalable products.

The authors, having studied how IBM and other companies such as Hewlett Packard reuse obsolete products and scrap, ask "Shouldn't we redefine the customer buying experience by including this in brand positioning? The program needs to be developed based on a joint value proposition that allows both to win: the consumer needs to win by gaining easy disposal, and the manufacturer needs to win through established and profitable processes for remanufacturing."

The authors also point out that customers take notice of these types of practices as well. "Customers are becoming more green minded, increasingly showing buying preference to companies that take this responsibility early."

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