324
• There have been signifi cant market challenges to overcome: the main one has
been assurance of supply – particularly with regard to consistency and quantity.
• Pricing stability has been found to be key. HP commodity purchasers are closely
involved with comparisons to virgin materials to ensure there is no fi nancial
impact from using RCP. A real-time example comes from the late 2014 oil price
slump which has created new challenges for the adoption of recycled plastic.
Virgin resin prices have dropped as much as 30 % per month (HP internal data,
2015).
The economics of recycled plastic are interesting and merit further study.
Recycled plastic providers who ‘fl oat’ their prices with the virgin resin demand will
most likely feel a ‘pinch’ when petroleum pricing drops. However, HP believes that
recycled plastic can be priced independently of virgin resin when operating in a
circular model. This makes most sense when long-term collaborative relationships
are established within the supply chain.
HP intends to continue this path of increasing recycled content in products and
components, wherever possible using its own closed-loop material streams. The
next step in this program is to extend into further plastic types and more product
families, thus disrupting the perception that closed-loop solutions can only be possible in small volume, localized situations. HP demonstrates that a world-wide solution involving millions of kilograms of material every year is indeed possible.
The next example from HP concerns an inner circle of the circular economy
diagram: that of service models. This is where products are leased or rented to customers, either with a service contract or not. The products remain within HP’s control which makes closing material loops, refurbishment, maintenance and repair
much simpler and cost-effective.
5 HP Device-as-a-Service Program
HP is currently developing business models in all levels of circularity. Market forces
and new customer norms are growing and shaping the company’s portfolio of
device-as-a-service product offerings to become a larger part of its business portfolio. Current programs are offered to all types of customer, from the home user to the
large enterprise such as Government departments or companies like banks or
manufacturers.
• HP Renew – This program currently remanufactures server, storage and networking products, offering the same reliability, functionality and warranty as
new HP products. In 2013, 3.7 million units were processed through HP’s 5
facilities across the world. Returned, loaned or trial units are completely remanufactured so they can be fully utilized and are not unnecessarily wasted. HP
Renew is a full-scale worldwide product example of remanufactured and redeployed servers, storage and networking solutions.
K. McIntyre and J.A. Ortiz
• There have been signifi cant market challenges to overcome: the main one has
been assurance of supply – particularly with regard to consistency and quantity.
• Pricing stability has been found to be key. HP commodity purchasers are closely
involved with comparisons to virgin materials to ensure there is no fi nancial
impact from using RCP. A real-time example comes from the late 2014 oil price
slump which has created new challenges for the adoption of recycled plastic.
Virgin resin prices have dropped as much as 30 % per month (HP internal data,
2015).
The economics of recycled plastic are interesting and merit further study.
Recycled plastic providers who ‘fl oat’ their prices with the virgin resin demand will
most likely feel a ‘pinch’ when petroleum pricing drops. However, HP believes that
recycled plastic can be priced independently of virgin resin when operating in a
circular model. This makes most sense when long-term collaborative relationships
are established within the supply chain.
HP intends to continue this path of increasing recycled content in products and
components, wherever possible using its own closed-loop material streams. The
next step in this program is to extend into further plastic types and more product
families, thus disrupting the perception that closed-loop solutions can only be possible in small volume, localized situations. HP demonstrates that a world-wide solution involving millions of kilograms of material every year is indeed possible.
The next example from HP concerns an inner circle of the circular economy
diagram: that of service models. This is where products are leased or rented to customers, either with a service contract or not. The products remain within HP’s control which makes closing material loops, refurbishment, maintenance and repair
much simpler and cost-effective.
5 HP Device-as-a-Service Program
HP is currently developing business models in all levels of circularity. Market forces
and new customer norms are growing and shaping the company’s portfolio of
device-as-a-service product offerings to become a larger part of its business portfolio. Current programs are offered to all types of customer, from the home user to the
large enterprise such as Government departments or companies like banks or
manufacturers.
• HP Renew – This program currently remanufactures server, storage and networking products, offering the same reliability, functionality and warranty as
new HP products. In 2013, 3.7 million units were processed through HP’s 5
facilities across the world. Returned, loaned or trial units are completely remanufactured so they can be fully utilized and are not unnecessarily wasted. HP
Renew is a full-scale worldwide product example of remanufactured and redeployed servers, storage and networking solutions.
K. McIntyre and J.A. Ortiz