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Making reverse logistics green and profitable
26 April 2010
Italian researchers have developed a logistics model that could allow old equipment from refrigerators to mobile phones to be recycled more efficiently under product take-back regulations. They outline their approach in the International Journal of Logistics Systems and Management.
Product take-back legislation, such as the Waste Electrical and Electronic Equipment (WEEE) regulations, shifts the responsibility of disposal of goods from consumers to the manufacturers. The ultimate aim is to allow materials to be recycled and reused rather than sent to landfill. However, management approaches tend to focus on specific WEEE categories, specific people and organisations involved, and the system is not optimised as a whole.
Marco Melacini and Alessandro Salgaro of the Politecnico di Milano, and Davide Brognoli of Avery Dennison Italia, point out that in addressing environmental pollution it might be possible to ensure the process of recycling used goods and even retrieving components for reuse might be an economically attractive proposition. However, the flow of obsolete and broken goods requires the development of so-called “reverse logistics” in which the usual flow of goods from producers to consumers is inverted.
“Reverse logistics encompasses a broad range of activities within, and outside of, logistics including: product returns, source reduction, recycling, material substitution, reuse of material, waste disposal, and refurbishing, repair and remanufacturing,” the team explains.
Within the European Union reverse logistics is essentially obligatory and requires that producers should take responsibility for the end-of-life phase of their products, add identification codes to any new products and provide information for adequate recycling. There is also a requirement that appropriate systems for the separate collection of end-of-life goods should be in place and producers must set-up and finance appropriate collection systems. For future products there is the option that producers will be primarily responsible for take-back but can form alliances with other producers to fulfil their environmental obligations.
The Italian team has now created a mathematical model of the options for the take back and recycling of large and small household appliances, computer and telecommunications equipment, consumer goods, lighting equipment, tools, toys, leisure and sport equipment, medical devices, monitoring and control instruments, and automatic dispensers. There are several different stages involved: collection, transportation, sorting, and processing.
In a test modelling of the Danish supply chain and take-back situation, the model reveals what might seem obvious: that producers working together in consortia can be much more efficient than each working alone to comply with regulations. In a larger country or in the European-wide context, the team suggests that recycling offers economies of scale and allows consortia to operate in a free market, where sales of re-used and recycled products, provide adequate financial return for the effort involved as well as the obvious environmental benefits.