Most procurement processes end with the purchase. The life cycle only begins there.
We optimise purchase prices with great care, negotiate discounts, compare offers and haggle over percentage points. We largely leave everything that follows to chance: operation, maintenance, spare-parts supply, return, recycling and documentation.
That backfires twice. Commercially, because the purchase price is the smaller part of total cost for many assets, certainly for vehicles and IT and also for energy-intensive machinery. And from a regulatory perspective, because evidence of whereabouts, recovery and materials is increasingly required, even from companies that are not themselves subject to reporting obligations. [Evidence: status of Swiss circular-economy rules, for example the revised Environmental Protection Act]
There is another development many SMEs have not yet considered: the availability of raw materials and spare parts is no longer guaranteed. Anyone planning to operate equipment for ten years depends on someone else having planned for those same ten years.
This is an underestimated side effect of usage models. Financing with a defined term and return point forces the company to consider the final phase. When the agreement is signed, it must determine the condition in which the asset will be returned, who will inspect it and what happens next. Purchasing rarely creates this discipline by itself: there, the process ends with an entry in the fixed-asset register, while return becomes a disposal problem fifteen years later.
Two goals often portrayed as competing can therefore be combined. Equipment that enters a refurbishment process after defined use is more sensible economically and ecologically than equipment that operates inefficiently for five years too long and ends as scrap. The residual value is not a side effect but a variable that can be negotiated when the agreement is signed.
The objection is valid: this works only if a secondary-use market exists. It does for IT, vehicles and standard machines, but not for specialist solutions. That distinction is also useful when classifying the company’s assets.
An IT service provider leases work equipment with planned return and renewal.
An honest question: do you know where the devices you used five years ago are today?