I had the opportunity recently to experience first-hand just how counter-productive some carrier strategies are when it comes to repairing network equipment. Given the size ($10B+) and history of the company we were speaking with, I had expected to find a state of the art, forward-thinking internal service organization with fully optimized processes. What I found was something completely unexpected – the polar opposite.

I’m paraphrasing here but this is what we heard from the head of materials management, “we sell everything we de-install at $1 per pound to our repair vendor regardless of what it is.” I then asked about how they handle spares and repairs to which the replay was basically “we buy the equipment back at full repair or replacement cost.” As you can imagine, there was a short period of uncomfortable silence as my team absorbed what we had just heard.

This example underscores just how easy it is to find managers in critical support roles making major financial and operational decisions without understanding the overall impact or what best-in-class methodologies exist in the marketplace. The idea that a public company, keenly focused on EPS and customer retention on the front-end, could maintain such an arcane process on the back-end is indicative of a lack of ecosystem visibility and the fundamental disconnect that exists between operations and finance.  

The Telecom market is too competitive and cut-throat to spend time living in the past. In order to keep up, and succeed, carriers and OEMs need to be more agile and respond quicker to change. A well-executed reuse strategy can help bridge the gap between finance and operations, and help gain an invaluable window into what’s taking place within their ecosystems. Through that visibility, you can begin to devise unified goals and establish new processes around surplus and decommissioned assets that yield significant financial operating margins.