Reverse Logistics -The case of e-waste

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Reverse Logistics -The case of e-waste

• Tage Skjøtt-Larsen
• Department of Operations Management
• Copenhagen Business School
• Fremtidens hållbara transport- och
• logistiksystem i Öresundsregionen
• Malmö 1. April 2008

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Agenda

• Why do we care?
• E-waste a ticking bomb
• Challenges of reverse logistics
• WEEE Directive and WEEE System in Denmark
• Options for improvement
• Conclusions

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Why Do We Care?

• Global warming, Carbon emissions
• International regulation and legislation
• Brand reputation (NIKE, HM, ICA)
• Stakeholderss increasing awareness
• Energy and commodity prices
• Potential value creation in reverse supply chain

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E-Waste a ticking bomb

• UN estimates that 20-50 mill. tons of e-waste are
  generated worldwide each year. Less than 20
  captured by recycling programs
• In 2007 about 1,1 bill mobile phones were sold
  worldwide 50 of the worlds population (6,6
  bill) has a mobile phone
• EU produce every year 8,7 mill. tons of e-waste.
  Large export to Asia and Africa in spite of the
  OECD and EU Ban of export of e-waste

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• Circuit boards - lead cadmium
• CRT Monitor - lead barium
• Flat screen displays - mercury
• Printed circuit boards, cables, plastic casing -
  brominated flame retardants, PVC for insulation
• Cadmium in rechargeable batteries

What Is in a Computer?
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Every year, hundreds of thousands of outdated
TVs, computers and mobile phones are dumped in
landfills or burned in smelters. Thousands more
are exported, often illegally, from the Europe,
US, Japan and other industrialised countries, to
Asia and Africa. There, workers at scrap yards,
some of whom are children, are exposed to a
cocktail of toxic chemicals and poisons.
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• Eliminated the use of CRTs in 2006
• Complied worldwide with RoHS in 2006
• Plans to eliminate the use of PVC and BFRs in
  2008
• Recycled 10 af the weight of their e-waste in
  2006
• Expect to recycle 30 of the product weight in
  2010
• In iMac is used aluminum, stainless steel and
• high-grade plastics
• Apples iPod has free recycling programs to Apple
  retail
• stores worldwide (10 discount on a new iPod)

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Dells Zero-Carbon Initiative 2007

• Reduce Dells carbon emission by 15 by 2012
• Primary suppliers have to report carbon emission
  data quarterly
• Partnering with customers to build the greenest
  PC on the planet
• Expanding the companys carbon-offsetting program
  Plant a Tree for Me
• Dell plans to set an environmental standard for
  the technology industry

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Xerox Copiers Xerox has saved millions over the
years by remanufacturing both copy machines and
toner cartridges. Xerox supports its
remanufacturing efforts with its leasing sales
arrangements. Instead of selling the product
outright, Xerox will maintain the machine, so the
customer does not have to replace it as
needed.Reclaimed copiers are inspected and go
right back onto the new-build assembly line. The
only reason Xerox wouldn't remanufacture a
product is if the technology was simply too old
to be useful anymore.
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Key issues in reverse supply chains

• Forecasting og control of timing, quantity and
  quality
• Design for environment, disassembling
  remanufacturing
• Organizing collection systems
• Info-systems for reverse flows of
  products/materials
• Inspection, evaluation, disposition
• Recycling of components, materials, refurbishing
  of products (in-house, third-party, partnerships)
• Create secondary markets for refurbished and
  recovered products and components (avoid
  cannibalization of new products)

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WEEE-System - Denmark

• Manufacturers/distributors of electrical and
  electronic equipment shall from 2006
• Establish and finance return systems for their
  products at the end of the product life cycle
• Establish and finance arrangements to utilize the
  scrap
• Keep account of the e-waste
• Mark the products with a carbage can with a cross
  over and deliver information about recycling and
  treatment (from August 2005)

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Return systems for WEEE
Treatment facilities
End-users waste From trade industry
Producers and Producer schemes
Municipal Collection schemes
Municipal Collection sites
Citizens waste From households
Non-specific product waste stream
Specific product waste stream
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Options for improvement

• Implementation of WEEE directive in different
  speeds in EU
• Compliance with 27 different national legislation
  no pan-European solution
• Collective schemes prevent learning from quality
  defects no closed-loop supply chain
• No incentives to increase rate of return fee
  related to market share not to return rate or
  life-cycle

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Consumers disposal of e-waste

• Consumer behaviour - a life in the fast lane
• Reduced lifetime of electronic equipment
  (typical replacement time for mobile phones is
  1-2 years)
• Logistics infrastructure
• Lack of knowledge of disposal alternatives
• Need for easier access to disposal of e-waste
• Change of consumers attitudes
• More incentives to increase rate of return

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• Conclusions
• We create products, processes, supply chains
  business models without much consideration of the
  reverse supply chains.
• Environmental costs are not fully internalized in
  product price.
• The return process should be an integrated part
  of SCM
• Lack of performance measures on return flow (
  lead-times, return procentage, quality af
  returned products, forecast uncertainty)
• Use technology to obtain speed and lower costs in
  the return system (e.g. data-loggers, ICT,
  RFID)