Edition 52
Asset Retirement Breeds New Channels
by Heather Engen, Director of Marketing & Sales, Lenovo, Lenovo

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Arrow Electronics Inc.announced an agreement with Lenovo designating Arrow as its “partner of choice” for a new asset retirement service offered at the point of sale. Through the agreement, Arrow’s value recovery and recycling offerings can be bundled with new Lenovo equipment purchases.

Initially launching in the United States and Canada, this service is available to Lenovo’s relationship customers in global accounts, public sector and large enterprise segments.

Arrow Electronics Inc. is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Arrow serves as a supply channel partner for more than 100,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of more than 470 locations in 55 countries.

Serving its industrial and commercial customers, Arrow offers both a wide spectrum of products on behalf of leading electronic components and enterprise computing solutions suppliers, and a broad range of services and solutions that are complementary to the products Arrow distributes, including materials planning, new product design services, programming and assembly services, inventory management, reverse logistics, training and education, managed services, and electronics asset disposition.

Through six acquisitions of industry-leading EAD providers since the company’s entry into that market in 2010, Arrow processes approximately 7.2 million electronic assets annually through 16 EAD processing facilities across the Americas and Europe. With a “zero-landfill” policy, Arrow offers enterprise customers the ability to recycle, redeploy, remarket or donate their assets. Through these offerings, Arrow helped to keep more than 25,000 tons of material out of landfills last year. Arrow’s EAD operations exceed industry standards and the company employs a uniform, consistent approach to EAD processing globally.

Lenovo is a US $34 billion personal technology company – one of the top two PC makers in the world and an emerging PC Plus leader – serving customers in more than 160 countries. Dedicated to exceptionally engineered PCs and mobile internet devices, Lenovo’s business is built on product innovation, a highly-efficient global supply chain and strong strategic execution. Formed by Lenovo Group’s acquisition of the former IBM Personal Computing Division, the company develops, manufactures and markets reliable, high-quality, secure and easy-to-use technology products and services. Its product lines include legendary Think-branded commercial PCs and Idea-branded consumer PCs, as well as servers, workstations, and a family of mobile internet devices, including tablets and smart phones. Lenovo, a global Fortune 500 company, has major research centers in Yamato, Japan; Beijing, Shanghai and Shenzhen, China; and Raleigh, North Carolina.

Lenovo Services offers a comprehensive portfolio of services to assist customers with all aspects of the IT hardware life cycle from factory integration and automation services to simplify deployment, to support and protection services to maximize productivity and lower the hardware cost of ownership. Lenovo also provides hardware disposition services to enable customers to responsibly and securely manage end of life assets. Lenovo’s portfolio of services, tailored for Lenovo’s products, complement the capabilities of our partners and customers.

IT asset retirement can be time-intensive and costly if not managed efficiently. Lenovo, in partnership with Arrow, provides a new, smart option for IT asset retirement. Adding enterprise asset retirement at the time of new equipment purchases is a wise move that saves time and effort down the road.

A Conversation With Lenovo and Arrow

Question: What brought about the partnership?

Heather Engen, Director of Marketing & Sales, Lenovo answers: Arrow has a long-standing relationship with Lenovo. Lenovo was seeking to solve customer pain points associated with the “unplanned” nature of traditional asset recovery service. Lenovo recognized how much time and effort customers were investing in ad hoc disposition processes, such as manually cataloging end-of-life assets, as well as developing and reviewing custom proposals for disposition.

Lenovo felt there was an opportunity to create a standardized asset retirement service that could be conveniently and cost effectively attached to new serialized Lenovo equipment at the initial time of sale. By adding this service at point of sale, customers can pro-actively budget and plan for end-of-life asset management, as well as manage the service in a cloud based portal environment. The portal greatly simplifies service delivery with “one clock” pick-up as well as additional benefits, including a central repository for all reports/certificates, improved service delivery tracking and oversight and the ability to monitor to residual value during the in-service life of the equipment. This vision of service delivery mirrors the provisioning of other services, such as warranty coverage to serialized equipment.

After an extensive evaluation process, Lenovo selected to partner with a clear leader in the reverse logistics area as well as expand an existing relationship with Arrow. Through an acquired company (TechTurn), Arrow has a long history of supporting Lenovo’s standard ARS services, from providing quotes and sales support to handling the logistics, processing, and remarketing or recycling of the assets. Arrow also works with Lenovo to support its product returns program by procuring, processing and reselling inventory Lenovo receives through channel, retail, and customer returns. As a service provider, Arrow provides great expertise in the area of value recovery for retired IT assets.

Arrow’s asset retirement services can be attached to any new serialized Lenovo system using one of two part numbers for either recycling or value recovery (i.e., return of fair market value). Regardless of the service type selected, the customer receives a complete turnkey service, including on-site packing, secure shipping, processing at a certified and audited facility and complete reporting including certification of data destruction and environmental compliance.

Lenovo strongly believes this new ITAD option will change the way organizations approach the challenge of efficiently managing end-of-life assets.

Question: What are the dominant Regional/Global influences?

Jeff Zeigler, President & GM, Global Asset Disposition , Arrow answers: Both Arrow and Lenovo are taking a global thought leadership position by providing a new take on traditional ARS services. This service eliminates many of the historical pain points and those pain points aren’t specific to any particular geography. Because of that we believe this service is very likely to be replicated by others in the space on a regional and global scale.

Heather Engen answers: Some of the pain points Jeff refers to include the growing number of required certifications for IT asset handling (e.g., RIOS, R2); increasing number of local and regional regulations governing IT asset disposal; enterprises increasingly comprised of multiple geographically dispersed locations; fewer IT resources available to manage time-consuming ad hoc processes; and the need to streamline and automate IT equipment lifecycle management for greater efficiency.

Question: How does the customer benefit from this partnership?

Heather Engen answers: Customers often lack options for secure and responsibly planned asset retirement. IDC has indicated this new solution pioneered by Lenovo and Arrow is unique in the ITAD market today. By planning ahead, customers can accurately budget for asset disposition and amortize that expense over the life of the system. Additionally, customers can replace manual ad hoc processes for dealing with end-of-life assets with a fully automated and cloud-based portal solution to greatly simplifying asset disposition management and delivery. Geographically dispersed locations can locally manage a uniform and centrally supervised service across the United States and Canada. This new solution approach improves equipment lifecycle planning and allows for optimizing the value of IT equipment with ongoing visibility to residual values.

Jeff Zeigler answers: I would add that this is innovative not only in terms of the client benefits it provides, but also in the way this service is fulfilled. This model is very natural inside an OEM like Lenovo, as it becomes another service to attach to the box at the point the new box is sold. This becomes a perfect storm of fluid sales motions inside Lenovo and expanded value to the end client, which is what makes it such a home run. I would be really surprised if this didn’t become the default ARS model for OEMs (and VARs) at some point.

Question: Does this partnership increase job availability?

Jeff Zeigler answers: Consistent with our standard approach for all of our operations, Arrow will allocate resources as demand for this service grows, given the program is newly launched.

Question: Where does cost responsibility/shareholder value improve in the equation?

Jeff Zeigler answers: Shareholder value will be driven by the revenues/profits we garner from this service. Revenue is generated by fees paid by the client at the point the new box is sold and at the point any units are remarketed. Both Arrow and Lenovo participate in those revenue streams. This program is very strategic in nature and I think it eventually will set a new standard for how this service is procured.
Heather Engen joined Lenovo in 2005 and currently holds the position of Director, Services Marketing and Sales for Lenovo’s Americas geography. During her 19 nineteen years in the PC industry Heather has held numerous leadership positions in functions such as Marketing, Product Management, Operations, Business Development and Corporate Strategy. Heather completed undergraduate studies at the University of South Dakota and holds an MBA from UNC’s Kenan-Flagler Business School.

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