Value Chian Analysis: Elements of a Circular Economy at Dell

Value Chain Analysis
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Value Chain Analysis
Introduction
In order to understand the functioning of the economy, it is worthwhile to know the definition; the production and consumption of goods and services. Here, there are different models of economic endeavors. First, there can be a linear structure or a circular structure. A linear economy entails production and consumption of services in a linear manner. For instance, in a system of producing plastic bottles, a company would engage in the extraction of required raw materials, go through to the production stage, distribute the bottles for consumption and then dispose of the product. In a nutshell, the production process has an ‘endgame’ of zero because of the one-way system of materials.
In most cases, the waste usually ends up back in the soil or back into the atmosphere leading to pollution (Ranta & Makinen, 2018). On the other hand, a circular economy has a different set up that proves to be the way forward. The understanding of the way a circular economy works is simple; there is re-usage and recycling in the entire product life cycle so as to maintain the availability of the resource given the finite nature of the Earth’s supply. The linear economy doesn’t have a stage of product recycling. The circular system may first obtain raw materials and recycle the used products for subsequent production. The main aim of the circular economy is to avail the materials that are in limited supply to the manufacturers. This is a practice that creates value from waste streams.
This paper focuses on Dell Company as one of the many organizations that have adopted the circular value chain. Dell is an electronics company that manufactures computer hardware such as desktop monitors, laptops and other computer accessories. The Dell Company operates in line with the circular business model. The company believes that its objectives and principles can be achieved through a sustainable technological approach. The world’s economy can be driven forward through the elements of the circular value chain model. For instance, maintaining the production of computer hardware and accessories in terms of value creation and utility depends on how the components, products, and materials are handled. Additionally, the elements of the model help the company to identify new opportunities, develop better systems and increase efficiency. Dell operates in such a way that there is movement between the raw materials obtained, the production facilities, the distribution process, the disposal process, and back. The system makes a loop that leads to sustainability (Urbinati & Chiesa, 2017). Therefore, maintaining life and growth of economies would otherwise not be possible on a planet that has a limited supply of resources.
Elements of a Circular Economy at Dell
As a member of the circular economy program, Dell has employed several elements of circular economy in its operations. Among them include how they obtain materials, packaging, takeback, resale, energy, cloud and virtualization, understanding systems and public procurement.
The company has been able to create materials made of plastic that is environmentally friendly. The OptiPlex 3030 All-in-one is a growing network of the closed-loop plastic network (Hilton, 2018). This is one that can be recycled since it is made of recycled plastics that are environment-certified. Every year, Dell post-consumer recycled plastics in their products, which are more than 10 million pounds in weight. In addition, the company started another program that reflects the circular program; the production unit now uses more plastics from their own ‘heap’ of electronics that are already used which is about four million pounds annually. Furthermore, the practice adopted by the company yields more benefits than expected. For instance, the plastics used are given a longer lifespan through the recycling process. They also help in the reduction of costs and they even have a smaller lifecycle carbon footprint. The company has a goal related to circular value chain; in 2020, they are aiming to obtain a flow of about fifty million pounds of recycled plastic as well as purchase sustainable materials to use on their products. Dell has a system that identifies products that require recycling so as to champion their objectives on a circular value chain.
The company has also applied elements of circular economy with regards to packaging. On the bid to reduce the number of packaging materials required for safe distribution of products, the company has shifted to more eco-friendly materials. For example, packaging sustainable materials are made available for two or every three products for safe deliveries. The sustainable packaging materials are made from Air Carbon which a special plastic made from emissions of methane instead of oil. Other sources include mushrooms and wheat straws. As a result of the new measures, the company has managed to avoid using over a million pounds of materials on the packaging. Their objective doesn’t stop here since they are aiming to develop a sustainable waste free-packaging with fully recyclable materials.
As a company that employs the circular value chain model, Dell has established recycling services as a large system of takeback program in more than seventy-eight territories. With the available global service, Dell has managed to recover over 1.4 billion pounds of used computer hardware and other electronics. Moreover, the company is aiming to reach a goal of collecting 2 billion pounds. These processes all lead to the establishment of a closed-loop of processing and using plastic materials as well as other electronic parts. The takeback program helps in preventing an all return stream of materials (Chiaroni & Chiesa, 2016).
Elements of the model can also be witnessed on Dell’s resale program. Every year, the company receives about 800,000 products from across the globe. These are products that are canceled, exchanged or returned to the company. The company engages its team on a responsible recycling system of some units while others go to manufacturing. Additionally, the team also concentrates on re...