Cisco scrap turned into $100M gold mine

The executive responsible for processing Cisco scrap (the return of used equipment under Cisco trade-ins and take-back/recycling programs) gave a fascinating interview to the EcoInnovator blog.

In less than 3-years, Dan Gilbert - Cisco Vice President for Reverse Logistics, turned 6 million pounds of Cisco product returns (scrap equivalent to 12 football fields filled knee-deep) from an $8 million expense into a profit center that contributed $100 million to the Cisco bottom line last year. According to Gilbert, "One of the myths is that you should treat all returns the same, the reality is there is a huge variation in the products you receive. You really have to dig into the details."

A story in DC Velocity states: "From 1995 to 2005, Cisco discarded more than 95 percent of its returned goods. According to company estimates, the Web networking giant in 2005 dumped $500 million worth of returns, junking enough product to cover 12 football fields knee-deep. By 2005, Cisco's returns business was a bona fide cost center. That year, it spent $8 million more to process returns than it generated in revenue from selling some of the items at residual raw material value." Read further on how Gilbert turned Cisco scrap into a $100 millon gold mine: Turning “Scrap” into Profit Reverse Logistics - hold 'em or fold 'em Related Story: Soft economy lifts the Cisco gray market

Why do you think it took so long for Cisco to cash in on its scrap? BradReese.Com Cisco Refurbished Quotes on New Cisco Equipment One year warranty on refurbished: Cisco Aironet Cisco Power Supplies Cisco VoIP Gateways One year warranty Refurbished Cisco

Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.

Copyright © 2008 IDG Communications, Inc.