Product recovery options

the environmental impacts of end-of-life products (Jacobs and Subramanian, 2009). Producers will be required to provide and pay for take-back schemes for their products (take-back obligation); these are set by the government and have started to place more responsibility onto producers.

Based on a detailed understanding of their products, companies can learn to manage the recovery and distribution of end-of-life products, planning of production and inventory, and supply chain management issues in reverse logistics (Rubio et al, 2008). Recovered products can be civil objects, consumer goods, industrial goods, minerals and chemical compounds, raw materials, distribution items and spare parts. The next step is to understand suitable product recovery options for each type of recovered product. Product recovery management (PRM) involves the management of all used and discarded products, components and materials that fall under the responsibility of a manufacturing company (Thierry et al, 1995). PRM aims to recover as much of the economic (and ecological) value as is reasonably possible, thereby reducing the ultimate quantities of waste. Due to the belief that the cost of PRM should not outweigh its benefits, most manufacturers focus on the forward logistic flows from the factories to the end customers but not the reverse flows of the used products. Therefore, the traditional approach of many manufacturers towards used products has been to ignore them or let other parties dispose of them. Recently, manufacturers are being pressured by both consumers and governments to reduce waste generated by their products. In general, there are six major product recovery options (Thierry et al, 1995).

Repair:

● The aim of repair is to return used products to working order. ● Used products are normally not disassembled. Used products are fixed and some parts may be replaced while some parts can be reused. ● The quality of the repaired products is usually lower than the quality of new products. ● Repair can be performed at the retail stores or repair centres. ● Products such as computers, mobile phones, washing machines are suitable for repair.

Refurbishing:

● The aim of refurbishing is to bring used products to a specified quality. ● Refurbishing needs similar processes to repair. It involves disassembly of used products into modules, inspection of the modules and then fixing and/or replacing some modules. ● Approved modules are then reassembled into refurbished products. ● The quality of refurbished products is often lower than that of new products. ● Products such as houses and caravans can be refurbished.

Remanufacturing:

● The aim of remanufacturing is to bring used products up to quality standards that are as good as those for new products. ● The processes involved are similar to those of refurbishing. Used products are often completely disassembled into modules and parts. There will be extensive inspection of modules. Worn-out parts or modules are replaced.

Repairable parts are fixed and extensively tested. Approved parts and modules are re-assembled into remanufactured products. ● It is popular for products such as copiers, engines, car parts, machine tools, etc.

Cannibalization:

● The aim is to recover a limited set of reusable parts from used products or components. ● Only a small proportion of the parts of used products are recovered for reuse, remanufacture or repair of other products and components. ● Involves selective disassembly of used products and inspection of potentially reusable parts. ● The remaining parts are recycled or disposed of.

Recycling:

● The aim is to reuse materials from used products or components. ● The recovered materials are separated into categories. ● The materials can be used to produce original products and components if their quality is high. Otherwise, the materials can be used to produce other products. ● Examples are milk bottles, soft drink bottles, etc.

Upcycling:

● This is different from recycling; it requires creative reuse. ● The aim is to produce something new and better than the old items. ● The end product is typically one of a kind, handmade and sustainable. ● It is based on a ‘buy low, sell high’ business model. ● For example, worn T-shirts are used to make cleaning rags; many unwanted items are now used to make bags, notebooks, etc.

The above concept of upcycling has generated some attention recently because it transforms low-value unwanted items into high-value, highly sought-after items. Many new enterprises have emerged due to the opportunities for upcycling lots of unwanted items. For example, TerraCycle Inc is a world leader in the collection and reuse of consumer packaging products. Playback Clothing transforms trash such as plastic bottles and clothing scrap into great-looking eco-clothing. IceStone makes high-design surfaces from recycled glass instead of quarried stone. Kallio is a New York-based company that makes old clothes young again. Sword & Plough works with veterans to repurpose military surplus fabric into stylish purses and bags. TRMTAB collects leather scraps from factories around the world to create limited-edition, refined leather goods for tech devices. Loopworks is a social enterprise that rescues high-quality, unused material and turns it into limited-edition, handnumbered goods. Blue Jeans collects old denims, transforms them into cotton fibre state and upcycles them into denim insulation. As of 2016, the company has upcycled more than 600 tonnes of denims, diverted more than a million denims from landfill, and produced over 2 million insulations. Even Ikea has started to consider collecting furniture to turn it into other types of furniture or appliances, and some clothing companies have already been incorporating recycled plastics into the design of their new clothes.

There are some main differences between the above recovery options. In terms of the level of disassembly, used products are disassembled at product level for repair, module level for refurbishment, part level for remanufacture and cannibalization, and material level for recycling. The quality of upcycled or remanufactured products is the highest (as new), and the quality of repaired and refurbished will be lower. By using the repair option, some parts are fixed or replaced by spares. By refurbishing, some modules are repaired or replaced and potentially there is a need for upgrade. By remanufacturing, used and new modules/parts are combined into new products with some potential upgrade. Upcycling is a new approach to remanufacturing that can significantly upgrade the value of unwanted items. Cannibalization is

quite different; it reuses some parts and the remaining product is recycled or disposed of. Recycling is working at material level; that means parts are reprocessed into raw material form.

One of the very first steps to developing an effective PRM is to acquire adequate information. First, there is a need to understand the composition of products. The manufacturers should be able to identify each part and component of their products based on the bill of material and product/ material technical specification. A manufacturer with a proper environmental management system (EMS) will have a system to gather knowledge about the materials used to make each part or product and the legislation governing the end-of-life management of such materials. They can therefore identify which parts/modules/products, depending on the quality of returned products, are suitable for reuse, repair, refurbishment, remanufacture, upcycling, recycling or recovery.

Different incentives can be provided to encourage customers to return used products. For example, used laser printer cartridges can be returned easily because customers are provided with cartridge boxes marked for free return shipment. Credits toward future purchases are given to encourage participation in product recovery. Sliding scales of prices to be paid by customers for products with different residual quality levels encourage customers to take better care of the products and subsequently help to increase the average quality of recovered products. Some companies offer free recycling services to customers who purchase a new product from them. Lexmark offers a ‘pre-bate’ discount to customers who agree to return their Lexmark printer cartridges to Lexmark for remanufacturing (Streitfeld, 2003, after Toffel, 2004). The scheme has not only increased return rates, it has also positively improved Lexmark’s brand image. Many companies have even started to provide free take-back services by working closely with their distributors and third-party logistics service providers. Even though setting up own-product recovery or reverse logistics networks helps to ensure returned product quality, many manufacturers offer multiple return channels to increase recovery rates. Incentives for retail companies to collect end-of-life products can in some instances increase product recovery rates as well as sales of new products.

When choosing suitable product recovery options, several factors need to be considered. First, not all used products are technically suitable for reuse, repair, remanufacture or recycling. For example, food packaging may not be suitable for reuse, but it may be recycled. Second, there is a need to investigate if there is a constant supply (from the ‘disposal’ market) of suitable used products and components. This depends on the efficiency of the product return logistics flow, the willingness of consumers to return used products, and the