What is Flex doing in the field of ‘circular economy’? How does this business operate? How do they help customers reduce their environmental footprint and maximise value recovery? To find answers to these questions, Rahul Chopra spoke to Nikhil Rao, General Manager, Global Services and Solutions at Flex in India. Here are the key excerpts of the discussion.
Q. Can you share a bit about your experience at Flex?
A. I started my career with Flex 17 years ago as a graduate engineer trainee and now I head one of the business verticals for Flex, called Global Services and Solutions, which offers circular economy solutions, focusing on aftermarket services like repair to spare parts management, forward and reverse logistics. To elaborate further, at Global Services and Solutions in India we provide returns and screening, complex repairs, CO2 reporting and analytics, asset recovery and parts harvesting. Flex is an amazing company that gives you great opportunities to work and have a great career. I completed my Senior Executive MBA from the Indian School of Business (ISB) and I was supported by Flex in managing time and work.
Q. How has the electronics sector evolved over the years in India?
A. Fifteen years ago, all the companies in India were struggling to get a foothold in electronics manufacturing, but since then, it has taken great shape. Our investments in the space in Bangalore, and specifically Chennai, have been very interesting. We’ve remained invested, and we knew that the time would come when India would grow as an electronics repair hub.
We are happy to have been through this journey. There were tough times when we tried to convince customers to come and place their business here. But today every customer wants to look at India as an alternative to a manufacturing hub. They are very interested in working with us, and a good amount of business is also coming into India in electronic repairs and refurbishing.
Today, I can proudly say that India has transformed into a manufacturing hub and is in the phase of transforming into an international repair hub.
Q. Can you help us to understand the focus of the Global Services and Solutions (GSS) division?
A. We have been doing repairs for the biggest brands for more than 20 years now and the expansion to areas like Bangalore in 2004 is a testament of our global reach.
Today, we have two state-of-the-art repair/refurbishment sites, also called the Circular Economy hubs. Here, we are focused on providing circular economy solutions for products that are not only coming from domestic market but also imported internationally for repairs and return, and we usually do a lot of complex repairs. We import defectives from 50 to 60 countries across the world, which arrive in Bangalore, where we repair and send them out to their respective destinations. It’s a circular economy repair hub, which serves certain customers and products across the world. We are bringing in high technology products and training our technicians, getting them up to speed to repair such kinds of products.
Q. How would you define the circular economy? Are you referring to products that can be refurbished and resold?
A. Generally, products have linear product life cycles, that is, you build, you use, and scrap. This is how products were designed in the past. But now, many companies are working toward ambitious sustainability goals, like net-zero and zero waste, and looking at solutions to help them deliver on their commitments, including exploring circular practices. Today, products can be designed to support more circular product life cycles and progress can be made through aftermarket services.
Companies are putting in extra efforts to design products with components which are sustainable. After that, there is use followed by reuse, which in a linear model used to be scrapped. This reused product can be repaired, or refurbished, and it can be resold, or recycled in itself.
So, from a linear product lifecycle, what has evolved today is a circular product lifecycle. As far as the circular economy is concerned, what we are focused on is related to repair, refurbishment, and getting the best economic value through the entire product lifecycle. That’s the focus of Flex’s Global Services and Solutions.
Q. How do these products come to the OEMs and how are they captured and returned?
A. OEMs who sell their products are giving warranties and out-of-warranty services. When it comes to warranty service, the OEM is responsible for the repair, refurbishment, or replacement of the product. Hence, a large portion of the returns that are coming to us are warranty based.
At the same time, for out-of-warranty returns also we use standard repair and test process and genuine spare parts and make the products more reliable. Even the out-of-warranty cases come back to us, but 70%-80% of the cases are in warranty and 20% of the cases are out of warranty. We convert these products (given by our customers) into reusable products which are as good as new.