Logistics of Product Recovery - Case Study Example

Logistics of Product Recovery Contents Contents 2 Introduction 3 Scope 4 OEM Takeback 4 Convenient Collection 5 Conclusion 7 References 8 Introduction The United States of America, European Union and provinces in Canada have been rapidly adopting the cause ocf EPR or Extended Producer Responsibility and more focus being given to e-waste. In the case of USA, the very foundation of EPR has been the refunds of beverage containers that have been prevalent for years now. The case for EPR into non beverage items is catching up (Western Sydney Waste Board, n.d.). Legislation for EPR of products that are harmful to the environment like batteries and electronic goods has been enacted way back 2004 in the USA. However, these laws have been enacted within USA alone and that too only within 32 states. It is now being realized that producer responsibility needs to be increased in areas of Northern America and to increasingly shift the burden of environmental protection for the government to the producers. This also enables the government to shift the responsibility of economic responsibility from the government to the local taxpayers. The scope for such laws is also being expanded to other non-recyclable wastes such as fluorescent bulbs, paint, mattresses, appliances, mercury thermostats and medical sharps. The use of EPR shall essentially require the formation of a separate and somewhat parallel system of waste management or collection mechanism that is the key to increase the quantity of waste collected. The maximization achieved within the collection system is also responsible for increased industrial as well as consumer participation in management of waste products. The laws help in mandating such convenience in collection methods which is difficult to define (Michelini & Razzoli, 2010). This paper is aimed at analyzing the scope of reverse logistic management and developing of a proper model that would be helpful in EPR management deriving most benefits from reuse and recycle of end-of-life products. The paper suggests the establishment of the OEM takeback methodology for the benefit of companies and the environment because it is the most efficient management technique for wastes. However, it also suggests the use of pooled takeback within the collection mechanism to facilitate convenience and also eliminate the drawbacks of the OEM method by way of using the benefits of pooled takeback in the collection procedure. Scope The components, product, equipment, materials and even the total technical system can go backwards in the supply chain for rework in the manufacturing process so as to facilitate reuse and enhancement of unsatisfactory products on quality and component usage. On occasions, defective products may also be detected when they have gone into the supply chain and need to be pulled back or recalled for the purpose of rework. This stage involves enactment of a host of player who engage in business to business transactions of return and also takeback of obsolete products that have a very short product life cycle. Additionally, in the business to customer relationship, the products can also be returned for mismatches in demand and supply. Such product reverse supply chain management calls for a comprehensive system of management of product returns and reuse and recycle of such products in the reversal process. OEM Takeback This refers to the assumption of responsibility of physical and economic take back of the products manufactured by the manufacturer himself. The OEM (Original Equipment Manufacturer) takeback requires that each concern takes responsibility of their demanufacturing process such that their products are dismantled and reassembled for manufacturing and recycling and such other items that reflect an environmentally responsible behaviour. In this process, producer responsibility and feedback is likely to work well (Zhang, 2010). The producer is held solely responsible for its products at the end of its life and he should be held responsible for the cost of recycle and waste disposal of such products that have approached end-of-life. The manufacturer has to see some incentive in taking such painful measures. In the process of demanufacturing, the facilities are owned by the product manufacturer himself, a relatively small product family shall be engaged in producing the demanufacturing facilities. This shall help in inducing feedback as well as efficiency. Expertise in demanufacturing shall come from specialization and expertise. The closed loop of reuse and recycling of products that is likely to be improved through the OEM management via the end of life system. The ease of access of parts that can be reused shall contribute towards encouraging component development within the OEM demanufacturing facility (Spicer & Johnson, 2004). Convenient Collection Convenience in collection is a subjective idea however, based on the effort that is needed post consumption in collection of used products; the convenience in collection becomes a major issue in determining the efficiency of the EPR system. The convenience factor can be segregated into 5 different types of convenience needs namely knowledge need, proximity of the collection site for disposed items, scope for drop-off of materials so collected, the mechanism of the collection site and ease of processing such a mechanism (Wagner, 2012). For the purpose of this paper, it is suggested that the pooled takeback method is incorporated within the OEM takeback model such that the convenience factor is facilitated. This implies that pooled takeback can be handy in the collection process for the waste management and then help in drop off of the collected wastes to the manufacturing site so that effective reuse and recycle of the product is facilitated. Figure 1: Pooled collection system (Source: Parry, 2011) The collection system can have consortia of manufacturing concerns that establish product category groups and an organization that is engaged in delivering for producer responsibility. For the purpose, the pooled takeback mechanism can be adopted to facilitate the convenience in collection methods alone. Such a model based on the OEM takeback model assisted by the pooled takeback in waste collection shall reap the benefits of both the waste management models. This also imbibes a sense of producer responsibility in reverse logistics management. The pooling of waste material so done is to be deposited to different manufacturing consortia’s who arrange for segregation and disassembly of their products. The companies then arrange for collection of their products that have reached end of life stage and carry it within their manufacturing units for reuse and recycling (De Brito & Flapper, 2002). The model can be pictorially represented as below. Since collection of products is also a producer responsibility, although in consortia, the responsibility of collection also becomes an issue that seeks economic benefits and increases in efficiency due to scale of operations in collection management. This assures that all products have to travel short distances for disassembly at end-of-life. Additionally, all products have only a single place to go segregated by geographical collection scope. Conclusion The benefit of economies in collection cost can be derived from pooled takeback method, furthermore, the benefit derived from focussed and specialisation expertise in manufacturing can be derived from the OEM takeback process for reuse and recycle of disassembled produce that have attained end-of-life. One significant drawback of pooled takeback in collection is the loss of feedback in terms of innovating of the takeback cost of the waste products. The costs of takeback are universal as decided by the manufacturer consortia. However, such impacts of feedback loss can be minimised by the use of OEM takeback at the reuse and recycle stage of disassembled products. References De Brito, M. P. & Flapper, S. D. P. (2002) Reverse Logistics: a review of case studies. Retrieved from: http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&cad=rja&ved=0CCoQFjAB&url=http%3A%2F%2Frepub.eur.nl%2Fpub%2F561%2Ffeweco20020605160859.pdf&ei=GA4UU8nDIcba4ASOkoDgBQ&usg=AFQjCNGtSZ-PI8A6skXQx4m732c44Aq3qg&bvm=bv.61965928,d.bGE Michelini, R. C. & Razzoli, R. P. (2010) Reverse Logistics: End-of-Life Recovery Pledge, Discrete Event Simulations. Retrieved from: http://www.intechopen.com/download/get/type/pdfs/id/11542 Parry, A. (2011). Smiths Waste Management wins Recycling at the CLA Game Fair. Retrieved from: http://www.eventindustrynews.co.uk/2011/06/30/smiths-waste-management-wins-recycling-at-the-cla-game-fair/ Spicer, A. J. & Johnson, M. R. (2004) Third‐party demanufacturing as a solution for extended producer responsibility. Journal of Cleaner Production, 12(1), 37. Wagner, T. (2012) Examining the concept of convenient collection: An application to extended producer responsibility and product stewardship frameworks. Waste Management, 33(3), 499‐507. Western Sydney Waste Board. (n.d.) Case Studies on Product Take Back Schemes. Retrieved from http://www.zerowaste.co.nz/assets/Councilssolutions/casestudies.PDF. Zhang, J. (2010). Iclem 2010: Logistics for Sustained Economic Development--Infrastructure, Information, Integration. Reston: ASCE Publications. Read More