How we are fixing the spare parts supply chain so you can repair your Fairphone

To break the cycle of constantly replacing broken or out-of-date phones, we’re designing our phones (and their lifespans) to last as long as possible. That’s why, from the start, we’ve focused on making the Fairphone easy to repair – either by yourself or at a repair center. And one of the most important elements of repair is the availability of spare parts.

A serious learning curve for selling spare parts

Armed with good intentions and a touch of naiveté, we set about figuring out how to sell spare parts for the Fairphone 1 back in 2013. But we soon discovered that it wasn’t quite as simple as ordering a few extra components or even just a matter of good forecasting. In fact, we realized that what we were trying to do was considered pretty radical by others in the electronics sector. So to achieve our ambitions, it was up to us to start from square one and cobble together a brand new spare parts supply chain.

As a first step, we had to consider three very important questions:

– How many spare parts do we need?
– How will we pay for them?
– How long will the supplier keep producing them?

Customer Support team open up Fairphone 1These questions were directly related to our goal of keeping our phones functioning for up to many years. In terms of quantity, we needed to have enough of the most commonly broken parts in stock to sell to individual customers via our online shop, as well as use in our repair center. But how many batteries, motherboards, speakers and other components did we actually need? At the time, we were truly a scrappy startup with just a few employees – we didn’t have a dedicated operations department to help us answer these questions, and because we had never produced a phone before, we had no historical data to help us make accurate forecasts.

Our financial situation also created limitations. Because we were crowdfunding the production of the Fairphone 1, our cash flow was limited. In addition, we didn’t want to earn a significant margin on selling spare parts – we wanted to keep the retail price affordable to encourage Fairphone owners to perform repairs themselves.

Another major concern was that we weren’t certain how long the manufacturers of specific components would keep producing the required parts. We certainly couldn’t afford to order many years’ worth of spare parts up front, so we understood that this posed a significant risk. In the end, our only choice was to order to small quantities of spare parts and keep restocking them as we ran out.

Of course, figuring out stock requirements and financing was only part of the equation. We also had to educate our manufacturer as to why we wanted to do this, convince them to supply us with small volumes of parts, improve quality control and tackle issues like packaging and shipping something as small as, say, a camera. In addition, we needed to ensure that Fairphone owners had the right information and support to help them successfully complete the repairs. We handled all of this to the best of our ability with the skills and resources we had.

Fairphone 1’s easily replaceable battery

An example based on a true story: Replacement batteries for the Fairphone 1

As some of you may have noticed, our lack of experience and the challenges mentioned above often led to spare parts being out of stock for certain periods in time. To give you more insight into how this happens, let’s take a look at the specific example of the replacement battery for the Fairphone 1.

When we started selling the Fairphone 1, in line with our ambitions for creating a longer-lasting phone, we decided to offer a two-year warranty on the Fairphone 1 battery. We did this despite the fact that the industry standard for battery warranties is only one year, and the battery we were using wasn’t designed to last longer than a “regular” phone battery.

Besides taking our financial constraints into account, we purposely order batteries in small quantities so that we always have a “fresh” supply – as soon as a battery is manufactured, the material starts to age (deteriorate), even if they are not being used. This stock of batteries needs to cover both online sales as well as repairs performed at our repair center.

The combination of the two-year battery warranty and a limited stock is what causes Fairphone 1 batteries to be unavailable in the online shop. Especially now, as the Fairphone 1 is two years old, we’ve been experiencing some unexpected peaks in in-warranty service requests at our repair center. When this happens, the batteries needed for in-warranty repairs take priority over online orders, leading us to disappoint you with an “out of stock” message.

Rest assured, we have ordered more batteries and they will be available again soon.

Operations team visit Rhenus, the Fairphone 2 distribution center

Improving the spare parts supply chain with the Fairphone 2

From the moment we started developing the Fairphone 2, we’ve made a conscious effort to correct the issues we faced during our initial attempt to create our spare parts supply chain. The first major improvement relates to the design of the phone itself. The replaceable modules offer greater options for DIY repair and supplying spare parts. While we still can’t guarantee that manufacturers will continue to supply the specific components we need for five years, in the event that a component is no longer available, the modularity gives us more room to modify the design to accommodate a certain change.

In addition to a more “repair-friendly” design, we are in a much better financial position than we were two years ago. This gives us the ability to order larger volumes of spare parts for our online shop, repair center, and growing network of resellers. It’s also allowed us to expand our team to include experienced operations professionals who understand the logistics process, improve forecasting and build stronger relationships with our spare parts suppliers. Finally, based on the experience of the Fairphone 1, we now have access to our own repair statistics which allow us to make more accurate assumptions and estimates. One direct result of this new-found expertise is that we could be more realistic about the Fairphone 2 battery; it only has a one-year warranty.

The one thing that hasn’t changed is our approach to spare parts pricing. We’re still selling the parts as affordably as we can to encourage people to repair their phones whenever possible.

Technical Support team testing Fairphone 2’s

Up next: Setting up reverse logistics for spare parts

We’ll continue to improve and optimize the spare parts supply chain for both the Fairphone 1 and Fairphone 2 in the months and years ahead. Because we want to take responsibility for the entire life cycle of our phones, one of our biggest upcoming challenges is to set up reverse logistics for the used/broken spare parts.

Ideally, we want these old spare parts to come back to Fairphone – either for safe recycling, or to be refurbished if possible. At the moment, our most significant hurdle is once again financial. Currently, the cost of shipping these tiny parts surpasses the value gained from recycling or refurbishing them – but of course, we refuse to simply throw them away! In the next months, we’ll be conducting another Life Cycle Assessment (LCA) to explore the most beneficial (and affordable) way to reuse or recycle these discarded parts.