The Circular Economy in Action: Kenny McGee on Redistributing Excess Components

In this episode, I sit down with Kenny McGee, CEO and founder of Component Sense, to explore how his company is driving sustainability in the electronics industry. Kenny shares the story behind Component Sense’s origins—born out of a pressing need to manage surplus electronic components—and how it has grown into a leader in redistributing excess inventory.

We dig into some hard truths about waste in the electronics supply chain. Did you know that millions of brand-new components are scrapped every year simply because they’re surplus to requirements? Kenny explains how Component Sense prevents this waste by redistributing unused, traceable parts to businesses that need them, ensuring valuable resources don’t end up in landfills.

From navigating financial crises and COVID-19 to tackling Brexit’s logistical headaches, Kenny’s journey highlights the challenges of running a purpose-driven business. He also discusses how his team has developed innovative tools, such as their InPlant system, to integrate seamlessly into clients' supply chains, making redistribution both easy and profitable.

We also touch on broader industry challenges, including the rise of counterfeit components, the regulatory gaps around circularity, and the urgent need for global, not just local, sustainability efforts. Kenny makes a compelling case for prioritising reuse over waste, urging businesses to take responsibility for their environmental impact.

Towards the end, we explore the fascinating role legacy components play in keeping vital industrial machinery alive, a topic that underscores the value of thinking long-term in our throwaway culture.

If you’ve ever wondered how we can align sustainability with business value in the electronics industry, this episode will give you practical insights and strategies. Don’t miss it!

 If disruption hit tomorrow, would you know where your supply chain was most exposed? In 15 minutes my free scorecard helps you assess 27 resilience statements, calculate your score, and turn the result into three priorities and a 30 day action plan. You can download the scorecard free at tomraftery.com/scorecard.

Transcript

Copy

Kenny McGee: 0:03

If you look at your average mobile phone, two thirds of the periodic table, you remember that from school? Periodic table that was sitting in your science lab, two thirds of those elements are in the average mobile phone. So we're drawing resources out of the earth to make these components. For us, it's a real waste and it's a real shock and horror that these components can be just discarded again. Brand new, unused, traceable parts.

Tom Raftery: 0:32

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Sustainable Supply Chain Podcast, the number one podcast focusing on sustainability and supply chains, and I'm your host, Tom Raftery. Hi everyone. And welcome to episode 44 of the sustainable supply chain podcast. My name is Tom Raftery. And I'm excited to share the latest in sustainable supply chains with you. A big, thanks to this podcast's amazing supporters. You are the reason I'm here each week. And I really appreciate every single one of you. If you would like to join this community and help keep the podcast going, it's easy. Support starts or just three euros or dollars a month, which is less than the cost of a cup of coffee. And you can find the support link in the show notes of this or any episode, or at tinyurl.com slash S S C pod. In today's show, I'm thrilled to be speaking with Kenny McGee and in the upcoming weeks, I'll also be chatting to Jon Goriup CEO of vcg.ai, Aaron Lober VP at CADDI, Kayla Broussard who is the CTO at Kendryl, and Jenna Fink who's the principal analyst at zero 100. So, some excellent episodes coming up to look forward to. In the meantime, back to today's show. As I mentioned, my special guest on the show today is Kenny Kenny. Welcome to the podcast. Would you like to introduce yourself?

Kenny McGee: 1:56

Hello. Yes. Thank you, Tom. I'm Kenny McGee, CEO and founder of ComponentSense. I've been running this business since 2001. it was created in 2001 in response to a client's desperate need to get rid of excess and obsolete stock.

Tom Raftery: 2:12

OK, dig into that a little bit more for me. I mean, talk to me about what made you kind of wake up one morning, decide, you know, I think I should start Component Sense,

Kenny McGee: 2:26

Yeah, I was working for one of the biggest companies electronic distributors in the world. So one of the top two. I had a handful of fairly large clients in Scotland and I was looking after those guys. I'm incredibly customer focused, so, you know, I'm always trying to find solutions and help my clients. In any role I've been in, in truth, I've been like that. It started my first business when I was 20. So, when you're that young and working with customers, it's the only way to keep them coming back. So I've always been fanatical about customer service. So we had a similar boom in 99, 2000, as we saw in 21, 22. So there was a massive shortage of particularly semiconductors, other components too. And then there was the inevitable crash. So the crash hit beginning of January 2001, and my clients were suddenly sitting on abundant stock. So, you know, from being shortage, shortage, shortage, panic, panic, panic, panic buy, over forecast, all the same stuff we saw a few years ago literally repeated exactly verbatim as it did back then, 99, 2000. So yeah, January 2001, suddenly people were like, I've got too much stock, cancel my orders, push out the orders, you know, let's

Tom Raftery: 3:42

Yeah.

Kenny McGee: 3:43

try and reschedule. And of course the manufacturers and the distributors refused to do so and pushed stock onto their clients. So that, that's what I was faced with. I was the account manager and I had to go and deliver the terrible news that all that stuff, your orders now in stock and you're getting it next week. And it was millions, millions of dollars. So my client that initially raised the problem to me was, in Perth, maybe 60 miles from here. So I drove up to deliver the bad news. My, my boss wouldn't touch the stock. Brand new hadn't even been delivered yet. I could see an opportunity to redistribute it within our own network 'cause as one of the biggest distributors in the world, we could see there was other people using those parts. So we could fairly easily have redistributed that stock to other people. My customer was willing to take a massive hit on it, 50% percent they were talking about, and that was before we negotiated, so they were literally that desperate to not take the stock, they were willing to take a 50% percent hit. My CEO basically point blank refused to even discuss it. We sell stock, we don't buy, he said. So I was left in the position of going back to that client and giving them the bad news. I was dreading it, I've got to be honest. I really did not want to deliver that. I was trying to build a long term relationship with them. I was trying to get them to put more of their purchases with us. a bigger share than, our competitors. So, I didn't think it would go down well at all. So I was dreading it. Probably took longer than I should have to go and see them. When I did deliver the bad news, they said, oh, everybody said the same. So all their other distributors, all their other suppliers have basically said, tough, get on with it. You ordered it. here's your stock. It put the company under real pressure. It was about a hundred people company. So it wasn't huge. I think 30 million turnover, the stock that we were pushing on them was about three and a half million. So, you know, 10% percent of their turnover and they had similar bills from others. So it was chunky and it really did put them in a difficult position. They did eventually go bust. So it took till about 2007 when they went bust. I worked with them from that point onwards, cause I just didn't like the feeling of working for a company that didn't care about the customer. So it kind of made my decision for me that maybe I was in the wrong company and I decided more or less right away to try and find a solution for them. So I went into that more or less immediately and try to sell the stock which was infinitely harder than I thought. I had no network. I didn't have the database. And I wasn't prepared to steal or use people inside that company to, to do it. Morally, I just wasn't comfortable doing that. So I was literally cold calling similar companies to see if I could find somebody They could use the stock. And it was horribly unsuccessful. Took me two years to get my very first order. So by this time I'd accumulated quite a bit of debt, just surviving, just living. You know, I had a young child, I had a mortgage, all that sort of stuff. And then I discovered that there was a whole network of brokers that I didn't even know about. You know, I mean, that's how naive I was. I was out there trying to solve a problem and it turned out there's thousands of brokers all over the world in this little tight knit group, effectively helping each other. none of them can survive without each other. And it was brilliant, because I'd come from this massive company that was ego driven and desperate to crush the competition. And then suddenly I found myself in an industry where people literally needed each other. And it was wonderful. So I'd started to, get to know people, they got to know me, built up my trust and slowly but surely I started to make progress selling this stock and then brought in more stock and more stock and more stock. So, we now take stock in all sorts of different fashions. So we'll buy it for cash, we'll consign it where we physically take the product, bring it into our premises and manage it in its entirety, and our premium product's InPlant so literally physically inside the factory of our clients is our premium product. designed for billion dollar plus sites, so typically very large companies with full traceability. And that's, that's really key for us, is we need traceable stock now.

Tom Raftery: 7:58

Okay. And what size is the company now?

Kenny McGee: 8:00

Our last count's 12. 7 million revenue, 30 people ish, it varies. It fluctuates slightly, but we're nowhere near where we want to go. we've been building systems and processes for growth. So our systems are designed for billion dollar revenue. So that's the direction we're heading in. We've customized our systems to suit one particular client that we've been building with. And then we're now starting to roll that out to others. So particularly the InPlant system, it was designed very specifically with one very large client in mind. it's intimately integrated into their system and we're ruling it out to others now.

Tom Raftery: 8:39

what would you say has surprised you most in your journey from two years of zero sales through to now 12. 7 million and 30 employees?

Kenny McGee: 8:53

What's surprised me the most? It's a good question. Every year seems to bring its challenges. You know, COVID was the biggest shock of all our lives. I think, you know, that COVID thing kicking in was a massive shock for us because a lot of our sales go to China. We were hit with COVID in the September, October of 2019. Wasn't even talked about then, but we saw our sales plummet. interestingly, not just our Chinese sales. Our European and U. S. sales plummeted with it. I think we were down at one point, I think October 22% percent of our normal sales October is traditionally our strongest month because it's the kind of last month before Christmas in terms of manufacturing. they've got to get the stuff in for October in order to build it in time for Christmas. So, October is our strongest month every year, and in this particular year, 22% percent of our normal revenue is what we saw. There was no discussion even about COVID at that point. It didn't really start to come out until into November. Even to this day, I think the Chinese government See, it didn't appear until November. So I remember having discussions with our team, with our CFO and CTO and sitting down and saying, you know, what's going on. And when I started to hear about COVID, I immediately thought this could be connected, this must be connected. And they thought it was just kind of making excuses. So we had some heated discussions and debates. I am a bit prone, you know, I'm a bit prone to, labeling something and, you know, being quite determined that that's, that's maybe the story or that's the issue. But with that particular one, it was horrendous. It really wasn't till January that we started to talk about it, you know, in the UK press as being a thing that was going to affect us all. And I think it was late February, maybe early March by the time we went into lockdown. But when the Chinese came back after Chinese New Year, our Asian business got back to normal instantly. European and U. S. sales were still slow because of course they were now in lockdown. But yeah, the Asian business recovered almost overnight straight after Chinese New Year in 2020. So, kind of proved at that point that there was a connection, but what it also proved is a lot of our U. S. sales, a lot of our European sales were also going to China. They had to be because they were the only people in lockdown before us. So we didn't realize just how dependent we were on China. That was probably my single biggest surprise, although I have lived through the financial crisis. that was a shocker. In the UK, the banks were in freefall. And we had a situation where we borrowed some money from the bank and the tiny tiny small print that nobody ever reads states that they can demand it back any time they want. And they did. So out of the blue I got a phone call saying that they wanted the overdraft back and they wanted the loan back. And we'd only taken the loan out about six months before, and it was an expansion loan, so we'd, we'd moved premises, we'd taken on loads of staff and they wanted it all back. So I, I said, you know, well, how long have we got? And they said, oh no, we need it back immediately. Where are you going to magic up all that money from to pay it back immediately when you've literally just spent it? So that was a huge challenge that very nearly killed me, never mind the business. And the business was performing reasonably well. I mean, we weren't full of cash, but we were doing okay. we were trading in profit and we were paying the bills and everything was okay. But that was horrendous because they literally started taking money out of the account as soon as it arrived. And again, I had no idea they could do that. We were fairly small back then and money arrived and they took it. you literally saw it drop into the bank account and then vanish.

Tom Raftery: 12:47

Wow

Kenny McGee: 12:48

So that was horrendous.

Tom Raftery: 12:51

Must have been Hard to make. payroll in those kind of situations.

Kenny McGee: 12:54

yeah, we were screwed. We were literally screwed within weeks of that because we just couldn't pay bills and we couldn't pay suppliers. You couldn't pay a supplier. You know, suppliers very quickly put you onto a cash basis. You couldn't buy the thing to sell it. I had to borrow money from friends. All sorts of things just to cash flow particular purchases, you know, if you had to buy something for 20 grand to sell it for 25 to make that five grand profit, you had to find the 20 and of course, The bank was just sucking up every penny that came in, so that was painful.

Tom Raftery: 13:26

what about Brexit?

Kenny McGee: 13:28

Brexit's not been much fun either, yeah, so these are things that do cause us trouble and goodness knows why politicians choose to do these things to us, but yeah, Brexit's been a pain, I mean, particularly for Europe, it's, getting stuck out of Europe is really painful cumbersome now. We used to be able to move single pallets. for a smaller client, they might just have two or three pallets worth of stock that they want to move, you know, into consignment perhaps. And now no shipping company wants to bring two or three pallets because the paperwork is so cumbersome.

Tom Raftery: 14:02

Yeah.

Kenny McGee: 14:02

That they'll, they'll literally only do full trucks and to get a full truck is difficult because you have something might give you 20, 20 pallets. It's not still not full truck. Two more on there, you know, it's that's really challenging. we've looked at all kinds of things. We're working closely with DSV. DSV, I don't know if you know them. They're enormous. And one of the biggest shipping and 3PL companies in the world. Not strangely as well known as, you know, your DHLs and FedEx and people like that, but they are, they're huge and I think they've just merged. They might even be one of the biggest if not the biggest. They're certainly heading in that direction. So, when I mention them, it's funny, it's not as recognizable a name, but they are huge. Huge company. So, we work with them so that we can store stock more locally now. And that, that's partly because of Brexit, but we're doing that in Mexico. Got that ready to roll in Vietnam so it just means that we don't have to drag stock all over the world to then redistribute it to our customers. driven partly and largely by the want to be greener, you know, bringing stuff from Mexico all the way to the UK to then ship it perhaps back to Mexico or to the US. So, We're trying to scale up those operations so that we can, you know, get more suppliers feeding into those sites to make them more cost effective.

Tom Raftery: 15:26

And so essentially, just to clarify for people listening, what you're doing is you're finding excess inventory that people might have or end of life electronics that people might have and finding buyers for same.

Kenny McGee: 15:38

Yeah. So, you know, our feeling is that if a component has been made, there's lots of resources gone into making that component. if you look at your average mobile phone, two thirds of the periodic table, you remember that from school? Periodic table that was sitting in your science lab, two thirds of those elements are in the average mobile phone. So we're drawing resources out of the earth to make these components. We're also using a lot of heat and energy to produce these components. For us, it's a real waste and it's a real shock and horror that these components can be just discarded again. Brand new, unused, traceable parts. and, you know, we've just come from Electronica last week. We're in Electronica and we're speaking to companies that we're talking about crushing hundreds of thousands of pieces of devices because they no longer need them. Brand new traceable stuff that could easily be redistributed. if they're proprietary, I kind of get it, you know, if they're really specialized parts, you know, so the processor chip in an Apple device is typically made for Apple, they won't want anyone else getting that. So I understand an element of that, but I'm talking about proper real parts that are quite usable and quite easy to redistribute. You know, there's lots of users of them and companies are still choosing to crush them. And, you know, we've got to think differently on that stuff. you can't be crushing brand new stuff and it's millions and millions of dollars. As well, you know, you said about shocks earlier. I went to South Korea years ago to visit a client. And they were in one site, this is a massive company, hundreds of factories. And in one site, they were scrapping two and a half million dollars worth a month and scrapping it. The attitude then was that they didn't want anyone else getting the stock. So that whole competitor thing, Oh, wouldn't it be terrible if our competitors got the stock. But again, if we're going to. get the planet on track. We've got to stop thinking like that.

Tom Raftery: 17:41

yeah, and I mean, I can understand the competitive nature of it, but surely for a lot of these companies, in that scenario, they're writing off that two and a half million, whereas they could instead and probably more because it's not just the 2. 5M worth of stock, but this cost associated with the crushing and the disposition as well. Whereas, if they're giving it to the likes of yourselves, instead of becoming a cost, it becomes a potential profit center, right?

Kenny McGee: 18:13

Yeah. I mean, very large companies like that, are InPlant clients, the billion dollar sites, we can typically return a hundred percent of the cost. In many cases, it can actually make them profit because their buying power is such that they're paying a fraction of the price that, you know, that my client in Perth in Scotland would pay, for example, you know, so they might be paying five bucks for a part that. big global entities paying $2 for them. And sometimes more extreme than that, the really big volume users might be paying cents for a part that's $5. there's scope to give them all their money back plus a margin and still save the smaller client a lot of money. So, you know, there is very good financial incentives for redistributing, particularly for the big guys.

Tom Raftery: 19:28

And I mean, from what I read in your site, you've prevented over 30, did I get this right? 30 million components from ending up in landfills. And, and you know, what lessons can other industries learn from, you know, that kind of approach to redistribution.

Kenny McGee: 19:44

Yeah. I mean, it's, it's interesting. We were originally called the company C sense. So the concept was that it could be more than components. the component sense was, our first business with always the intention of rolling it out into other industries, I mean, we could literally be a 10 billion company with amount of excess that's out there. That's not being managed properly. we've got more than enough on our plate as Component Sense. But yeah, I mean, the original concept was that we could be doing this for all sorts of commodities. And yeah, I mean, there is other people doing little bits and pieces, here and there, but you know, one of the frustrations I have is steel, metal, you know, metal is so easily recycled and steel is heavy, so it makes it difficult from a cost, pure cost point of view, makes it difficult to, to collect and redistribute that stuff. But. we see a lot of steel products in the form of screws, you know, in the electronics industry, everything's screwed together or bolted together. So we see lots and lots of screws, but nobody's looking for screws because they're so readily available. so nobody comes to us looking for screws. Particularly at the high end in the aerospace industry, their screws are very expensive, you know, they're very strong, they've got plating, they're, corrosion resistant. The price can be frightening. and we see companies that can't even redistribute it within their own entity, you know, they kill off a product, everything for that product is now deemed. scrap or obsolete or dead, but actually they use the exact same screws on the project next door, but they never seem to be able to tie those two together. And so that, that's one that frustrates me because they're bulky, they are heavy. And actually that's another thing our InPlant system can do is help people redistribute within their own organization. So as a by product, Our InPlant system sees all the stock within the business. So we take feeds from the MRP system so we can start to see patterns. We can start to see the, hang on, that screws also used over there. So, you know, if there's demand in another site and that's a free service we can provide, we don't look to make money from it, but we can basically alert them to the fact that. your other site over there in Mexico is using that same part. Couldn't we redistribute it there? Because our focus is really on making sure this stuff doesn't end up scrap. So if we can help people redistribute within their own organization, that's a win too for us.

Tom Raftery: 22:11

And the InPlant system you've mentioned a couple of times now, that's a software solution you guys have developed yourselves. Is that an on premise system? Is it cloud delivered? You know, how does that work for companies?

Kenny McGee: 22:25

Yeah, I mean, it's basically a website whereby they can log in via an iPad or, you know, anything. So we draw the information typically in standard reporting. Companies are always a little bit wary about letting you loose inside their system. So we tend to take standard reports that any supply chain department would be pulling anyway. And we can use those reports to amalgamate maybe five reports into one to make sense of it for us. That lets us know exactly what is excess on a particular day. So if the forecast changes tonight, tomorrow morning, we've got a fresh excess list. We know exactly what's for sale and we can go to market with that. We then break it down into, into blocks. So there'll be different attitudes towards selling the stock depending on how old it is. If it's completely dead, they might be keen just to move it because we can move things quicker. Your price is always you know, It's the deciding factor if somebody wants to buy a part or not. So if there's dead stock that's never ever going to be used again, give the buyer an incentive, get it moved, get it moved quickly. So if we can identify dead stock and then look separately at slow moving and then, you know, or very slow moving and then slow moving, then there's a big chunk in what we call active excess. So that's just where you have more than you need. So companies are always looking at their stock turns and they're typically trying to, turn their stock every six to eight weeks roughly but people are sitting on two years plus of stock at the moment. in the current market, now that the bubble's burst, people are sitting on two years worth of stock on average which is horrendous for their financials and for the reporting, but that's the stock we want to redistribute. So, there is a massive pain point at the moment. But we want to engage with them for the long term anyway. We just want to move excess.

Tom Raftery: 24:15

right. And of course, the excess of one company is another company's demand, essentially.

Kenny McGee: 24:21

Yeah, I mean, I remember hearing about the scrap industry. They used to talk about one man's waste is another's gold. And it's absolutely the case, you know, that somebody could be crying out for a part that's on a long lead time or is now obsolete and can't be bought. So yeah, one person's waste is another's gold for sure.

Tom Raftery: 24:37

Okay. And you mentioned in the intro call, the idea of keeping, a 20 year old industrial machine alive with one old chip, do you have any memorable examples of this kind of process and action?

Kenny McGee: 24:50

Yeah, I mean, we, do store a lot of legacy stuff. You know, people say, why are you hanging on to that stuff? It's older than me. And, you know, I think our oldest box 1980s, so it's not older than me, but it's older than most of my team. But it is brilliant. It's amazing. When you get somebody looking for one piece of something or five pieces of something and you ask what it's for and it is literally to repair some massive piece of kit sometimes that just needs that chip to keep going. So, you know, maybe a $5 chip, but that $5 is ultimately preventing the remanufacture of maybe a million, million dollar machine. So, we, we quite often give them away, you know, in truth, we don't even look to make money on it. We could be silly and say, Oh, you know, this chip saving hundreds of thousands, but it's actually just a pleasure to Be able to help somebody out in that scenario we often get hobbyists as well that are trying to repair ancient old pieces of kit and it is, it's truly a pleasure to be able to just say, Hey, we'll give you that and we'll ship it free and you're, they're blown away by that, it really is a pleasure to think that something is getting repaired. And getting a longer life.

Tom Raftery: 25:59

And there's an issue as well with counterfeit components in the secondary market. How should the industry address these challenges, you know, while keeping up sustainability goals.

Kenny McGee: 26:12

Yeah, counterfeit's been a big challenge since we started to hear about in 2005. By 2007, it was rife. It was everywhere, particularly within the broker network. And it was really tarnishing the gray market as they call it, you know? And I tried to educate people that the gray market is everything from white or slight off white, all the way to black. And the black is illegal. That's counterfeit. But there's shades of gray in between, and there's loads of really good brokers out there. that are really working hard to avoid counterfeits and keep the supply chain clean. But there is always going to be unscrupulous people. We definitely saw a little rise through that shortage period, where people were willing to basically take shortcuts. Even enormous companies have taken risks that they wouldn't normally consider. We've seen components that, you know, when we check the traceability, we see the component first. we look at the component and we go, suspect this looks dodgy in whatever way. we then check on the traceability and It's come from somewhere that shouldn't have come from really, you know. Big companies don't tend to dabble in those markets, but they were so desperate. And we literally had people asking us to buy stuff for them from really dangerous sources. You know, can you get this part for me? I found somebody that's got it. And you'd look up the company and you know, it was somebody's kitchen table in the Philippines or something. And they're wanting us to spend 40,000 on some parts. And it's just like, no, I mean, I can't risk my license on that. You know, bringing counterfeit product into the, into the country, even, you know, there's no way, but very surprising companies were willing to take those risks during their desperate period. So counterfeits are always there. we do look for traceability. So since 2007, we stopped buying from what's known as the grey market, because we felt it was just too much risk. Because if we bought from you know, even a credible broker, we don't know necessarily where they got it from. And even if they got it from a credible supplier, we don't necessarily know where they got it from. So, we made a conscious decision and it was about half of our business at that time, we did do a lot of sourcing. So it was about half of our business, made the decision in 2007 not to buy from the grey market at all and to focus solely on redistributing excess. So it was a tough decision and it did hurt financially. And of course the financial crisis came very soon after that. there's one thing after the other, but it was the right decision for us for sure.

Tom Raftery: 28:47

And what about the regulatory landscape? Are there any regulations or policies that you think governments should implement to support circularity in electronics?

Kenny McGee: 28:59

I find governments to be a little bit slow. You know, I think if we're waiting on regulation, we're not going to make much progress. I think trying to get people to commit and globally, I mean, it's one planet, I get so frustrated when people have a policy in place that's very narrowly focused. You know, in Scotland, we've got a Zero Waste Scotland thing. And if we're saving waste in Scotland, you get kind of help and support financially and otherwise, which is great, brilliant, but you know, we're one world, you know, we're supporting the planet. For an entity to be so narrowly focused, just seems crazy to me. And governments are the same, you know, we've got the Basel convention, one of the biggest countries in the planet isn't part of. Politics, yeah, politics are always challenging and, you'll never get agreement. My feeling is we as individuals have to take charge and we have to start choosing with our feet, buying products that we believe are coming from companies that do care, that are making a difference. And I think that's what's going to ultimately change it. People like us have to stand up and show ourselves. And, and be brave, and, and, you know. Our feeling is that some companies won't like our message, but the ones that care, the ones that really want to make a difference, we're aligned with. And those are the people we want to work with anyway. And there is lots of them now, thankfully. Yeah, since 2001, selling the green credentials was a really hard sell. You know, I was going in to see CFOs and people like that. And they kind of glossed over all that stuff. We always had a couple of slides about the environment and they did not want to know back then. But more and more now we're seeing younger people coming into management positions and they're very much more aligned and they want to make a difference. And as I say, it's common sense. What we're doing is common sense. It's just, you know, don't scrap it. We'll give you all your money back. We've tried to take out all the barriers, you know, so we can give you all your money back. Why would you not redistribute it? Why would you not? There's, there's no good excuse for crushing something that you can get all your money back on. And then similarly for the buyer, we're saving you money. So why would you not? And ideally, and what we really hope to get to, is people will choose sustainability first. So again, back to MRP systems, an MRP system automatically places orders currently. So SAP and all the other MRP systems place auto orders with your preferred supplier list. How beautiful would it be if those MRP systems chose the sustainable option first? That, that would be utopia, I think. You know, that's, that's where I hope the world will end up where we actually choose the sustainable option first.

Tom Raftery: 31:45

Yeah.

Kenny McGee: 31:45

And this stuff we sell is already made. The resources have already gone into it.

Tom Raftery: 31:49

No, it makes sense. I've had that kind of conversation before. I remember back in 2014. So 10 years ago now it was at the 2013 or 2014. I was at Ariba Live in Rome and they were talking about how their new version of Ariba allowed companies to see if there was forced labor or not in the companies they were procuring from. And I thought, yeah, that's laudable. Sure, but can they not also see the carbon footprint of the stuff they're buying? You know, can I not look down through their various suppliers and choose not just based on the financial and the forced labor, but also the lower carbon footprint? And it wasn't a thing they had then. And it's still not a thing they have now, as far as I know. So, you know, it will come. It's starting to be a thing, so hopefully to your point, the MRP system similarly will choose the more sustainable option in their auto settings just by default. Not here yet, but hopefully it will get there. And to that point, really, I want to take a more forward looking view now, you know, what's what's your vision for the electronics industry in 2030, 2035, you know, five to 10 year horizon, how close do you think would be to achieving a fully circular supply chain?

Kenny McGee: 33:04

Yeah, fully circular Yeah, it depends. I mean,

Tom Raftery: 33:07

a stretch. I know.

Kenny McGee: 33:08

Some of the companies we are talking to are really taking it seriously and they're literally looking at their entire supply chain and the suppliers of their suppliers and you're working all the way back literally to the raw material. They tend to be European companies that the ones I'm hearing about most. So, you know, the European legislation is coming. Everyone's well aware of it. Other countries, we're seeing quite different attitudes towards it, unfortunately. Yeah, I think it's good. It's going to be challenging. It really is. I mean, we're now trying to talk to chip makers as well. I was at a round table discussion last Monday, and there was a lot of the chipmakers represented there, and when they were asked about their sustainability goals, there was a lot of kind of looking at each other and not really knowing what to say, you know, chipmaking isn't particularly environmentally friendly, it does use a lot of resources, we know that but really the best answer they were able to give was that their technology allowed other people to be more sustainable. That seemed to be the best they could manage. We also went to meet as many companies as we could that had, in some cases, hundreds of staff on an exhibition stand. Not one had anybody on the stand that represented the sustainable part of the business. So some have somebody, you know, there was one particular stand. They didn't know who was in charge of sustainability for the company. And this is an enormous company that had no idea. They literally ended up looking up their website and still couldn't find me a name of somebody responsible. Yet their stand was covered in sustainability messages. And that sadly is, is still very common. So our goal. You know, I completely understand, these companies are shareholder owned typically. They're always trying to generate more and more revenue, more and more sales. But 2030 is coming pretty fast. There will be regulations upon them. And their customers are ultimately going to be pushing them towards it too. We want to ultimately work with them because there's lots of things that have happened in the past. We've seen large companies reselling the chip makers components. So, you know, a large production company that's getting really favorable pricing, intentionally buying more than they need to sell it on. Now, that's clearly frowned upon. You know, it's outwith the contract that the chipmaker has engaged with. That's what they're trying to clamp down on. I don't believe they're genuinely trying to clamp down on, on what we call redistribution. But in effect they are clamping down on redistribution because they are taking a kind of blanket approach to it to try and prevent what is probably verging on fraud you know buying components for your own use and shipping them out the side door. I completely understand why they're trying to clamp down on it, but I think if we could offer them full transparency on where the stocks come from and where it's going to, they might be more reassured that this is a thing they could take part in. That would be my ultimate goal with the chip makers is to try and help them be more sustainable by ensuring that the components they either take back from customers, because they do take back components sometimes, in particular from their disties, their distributors. We could maybe be the conduit to help them redistribute that stock in a sustainable manner, but also open and transparent so that they can manage it and make sure it's not being abused. So our systems could do that right now.

Tom Raftery: 36:37

Okay, left field question for you. What's the oldest gadget that you own and still use regularly?

Kenny McGee: 36:47

I've got an old Motorola flip phone. I don't use it regularly, but I just can't part with it. It's so cool. I think it was probably one of the first phones I bought in this business. So it probably is era somewhere about 2001. I certainly still have that. What else have

Tom Raftery: 37:02

and still works? Impressive.

Kenny McGee: 37:04

It does. Yeah, it still works. Yeah, absolutely. Yeah. it was such a cool phone at the time. Really slim line and you flip it open, and you know, look cool.. In the old days when I had hair, that was quite a cool thing to be able to do. Flick your phone and answer it. It didn't do very much, except make phone calls. You could text if you had the patience. What else do I have? I mean I've got loads of old stuff. I've got a very old motorbike. I've got old hi fi equipment, things like that. that is still brilliant. some of that stuff must go back to the 80s.

Tom Raftery: 37:38

I was in the electronics store the other day and I was amazed to see they're bringing back Polaroid cameras. I was like, are you kidding me? No. What?

Kenny McGee: 37:49

they weren't even good the first time around. You're waiting on a photo developing. And my daughter insisted on one a few years ago for a Christmas and they're quite cool looking now. And you can print them straight from the camera. And but yeah, I said to her that, you know, you're going to, the novelty will wear off very quickly. But she absolutely insisted this was the present she needed for Christmas. So we gave in. We bought the thing. She rattled off five or six photos and it's never been used since. And that, you know, this waste thing's really big for me. I hate buying stuff that doesn't have longevity. I will not buy cheap, poor quality item because I know it's going to end up in the bin in five minutes in some cases, you know, and yeah, that frustrates me. I don't like to do that. I do have, I've got lots of old furniture. I try and keep it going. I'll get it recovered. And you know, I like quality items that last. My granddad was a fan of going to the auctions, you know, he would go to the auctions. Everything he owned, I've got some of his stuff. I've got an old clock of his, I've got an old drinks cabinet of his that he bought at auction for peanuts, you know, and it's still, I don't know how many years, 70 or more years later, it's still perfect and solid. It's got a few chips and a few grazies, but you know, that's character. I like quality and I like things that last. I certainly don't want to be chucking stuff into landfill.

Tom Raftery: 39:14

Great. Kenny, we're coming towards the end of the podcast now. Is there any question I didn't ask that you wish I did or any aspect of this we haven't touched on that you think it's important for people to think about?

Kenny McGee: 39:26

That's a great question. Yeah, I mean, the primary message for me is let's just do the easy stuff. You know, why would we not do something that's relatively easy, that's better for the planet, better for the seller, the buyer? You know, Common sense, Component Sense, it's everything that we do is just common sense. And I take that from my fairly long life, what, 55? Am I 55? I think I'm 55. That's what happens when you get older.

Tom Raftery: 39:57

Lost count.

Kenny McGee: 39:58

Yeah. So yeah, my 55 years on the planet, growing up with parents that were, you know, war babies. You know, they waste not, want not all that sort of stuff. You know, let's just stop buying crap and throwing it away 10 minutes later. Yeah. And if there is an opportunity to redistribute, recycle stuff. I mean, we give away anything we don't need because I'd rather it be used than it go to the dump. You know, I don't want to waste stuff. so if we've got a bicycle, our kids have grown out of it, let's make sure it goes to another kid, give it a longer life maintain things, you know, keep them going. it's not rocket science, but you do have to buy quality for that. And I think consumers nowadays tend to go for constant change. They would, you know, I've got family members that want a new sofa every couple of years just because they fancy a new color. And, oh, we've changed the decor and that doesn't suit anymore and, that thing ends up in the waste because it's the wrong color. I mean, really?

Tom Raftery: 40:57

Can sympathize. Cool. Kenny, if people would like to know more about yourself or any of the things we discussed in the podcast today, where would you have me direct them?

Kenny McGee: 41:06

Yeah, I mean, componentsense.com is probably our primary place. we're also available on all the major social media platforms. So component sense on Twitter, on Facebook, on Instagram Our blog is really interesting. We've got a lot of nice and interesting blog articles. Our marketing team are constantly putting out really good content. LinkedIn, either under my name or under the company name. I'm trying to build a bigger profile on, on LinkedIn. And it's funnily enough, something we didn't mention. You said, is there anything we haven't mentioned? You know, I was recently in Ghana. I've been looking into e-waste. it's not really something we as a business do, but it's something I'm very passionate about is understanding where our waste goes. there was a documentary I saw years ago where they tracked some items from amenity sites in the UK. and there was a particular item that came from the amenity site less than a mile from my house. So it is literally the one I would use. And it ended up in Ghana. that shocked me, really horrified me, that the things we thought were being recycled properly were somehow ending up dumped elsewhere. We literally witnessed European stock, British stock, German stock, discarded items ending up in Ghana. So I went out physically on the ground two weeks and spent those two weeks looking at the supply chain, getting a sense of how the stock was getting there and how it was ending up in this massive scrapyard. And it was really quite eye opening. Maybe it could be another podcast down the line. Maybe we could go into much more detail, but putting out a lot of content over the next month or two relating to that. People might find that really interesting. So it'll be on either my LinkedIn account or on the company one or mixture of both.

Tom Raftery: 42:58

I'll put links to both in the show notes so people can follow up there. Great. Super Kenny. That's been fascinating. Thanks a million for coming on the podcast today.

Kenny McGee: 43:05

Thank you. Thank you.

Tom Raftery: 43:08

Okay. Thank you all for tuning into this episode of the Sustainable Supply Chain Podcast with me, Tom Raftery. Each week, thousands of supply chain professionals listen to this show. If you or your organization want to connect with this dedicated audience, consider becoming a sponsor. You can opt for exclusive episode branding where you choose the guests or a personalized 30 second ad roll. It's a unique opportunity to reach industry experts and influencers. For more details, hit me up on Twitter or LinkedIn, or drop me an email to tomraftery at outlook. com. Together, let's shape the future of sustainable supply chains. Thanks. Catch you all next time.