If you think the plethora of battery recalls by major notebook
manufacturers amounts to nothing more than a minor nuisance, think
again.
That defective battery could cost companies a bundle. Jack Gold,
president and founder of J. Gold Associates, a Northborough,
Mass.-based research and advisory firm, recently released a paper
detailing the cost of a battery recall to an average
enterprise.
For the sake of analysis, Gold estimated that there is a
centralized, company-wide burdened cost of $40 per unit for
assessing who has an affected machine, ordering replacement
batteries, receiving and distributing batteries, retrieving and
disposal of batteries, and other steps involved in the recall
process. He also estimated that the end-user burdened pay rate is
$72 per hour; the technician burdened rate is $80 per hour.
Gold's analysis found that the cost of replacing a battery in a
notebook device that is located within (or can be brought into)
corporate premises to be repaired by technical staff is $102 per
unit. For a notebook used in the field that has the battery
replaced by the end user, the replacement runs $148. Lastly, a
field notebook that is sent back to a corporate location to be
fixed totals $434. That $434 includes the cost of shipping it back
to the corporation and for the corporation to return it to the
field worker, the costs of repairing and replacing the battery,
loss of productivity and additional costs.
Daniel Taylor, managing director of the mobile enterprise
alliance, agreed that nothing is ever truly free, and the battery
recalls are no different.
"Everyone in the IT community understands that there is no such
thing as free," he said. "Even if something comes at no cost, there
are still the costs of managing it, deploying it, supporting it and
making certain that the old ones are disposed of properly."
Taylor's estimated cost per laptop differs slightly from Gold's,
but both prove that the recalls can cost a lot more than nothing at
all.
"If you add up shipping, help desk and recycling costs," he said,
"you can easily have a number between $50 and $100 per laptop."
Gold said that most companies will have a split between in-house
technical staff remediation and field end-user replacements of
batteries. Assuming a 50-50 split between in-house and end-user
replacement, the average cost to companies will be $125 per
notebook, he said. That $125 does not take into account the number
of units that need to be shipped back to offices.
As of late last month, more than 7 million notebook batteries
had been recalled. Dell pulled 4.2 million; Lenovo, 526,000;
Toshiba, 830,000; Apple, 1.8 million; and Sony, 28,000. Not all
recalled batteries are in enterprise notebooks, however. The number
of affected corporate notebooks is just under 3 million, Gold
said.
Using the repair cost per unit, the total cost of the battery
recall to corporate users could be $372 million. Though vendors are
paying for the cost of replacement, they are not covering the
corporate expenses associated with replacement of batteries. Using
that model, an enterprise with 5,000 affected notebooks would end
up covering roughly $625,000 in additional costs that the battery
vendor will not reimburse.
Gold recommends that companies with a large number of recalled
batteries negotiate with vendors to defray some of the financial
burden the recall can impose. Many vendors will offer credits on
new purchases and additional service offerings, he said, and they
will extend warranties to ease the financial pain caused by the
not-so-free recalls.
"Few companies realize how much it costs them internally to
repair and/or replace affected units," Gold said.