END OF PRODUCT LIFE:
CLOSING THE LOOP
ISQA 511
Mellie Pullman
Overview



EOL Supply Chain
Management & 3 Rs
Landfill vs. Recycling
Recycling & Innovation
EOL Supply Chain & 3Rs
Raw Material
Suppliers
Recycling with
Disassembly
Product Take-Back
Component
Suppliers
Recycling without
Disassembly
Subassembly
Secondary Markets
Remanufacture &
Reuse
Product Use
DisposalLand Fill & Incinerate
Final Assembly
(OEM)
Distributor &
Customer
US Municipal Waste Stream
Generated from Products
Category
Thousand tons
Durable Goods (tires, appliances, furniture, carpets, etc.)
45,670
Non Durable Goods (newspapers, books, plastic utensils, disposable
58,710
diapers, etc.)
Glass Packaging
10, 050
Steel Packaging
2,550
Aluminum Packaging
1,880
Paper & Paperboard Packaging
38,280
Plastics Packaging
13,010
Wood Packaging
10,670
Other Misc. Packaging
310
Source: Franklin Associates (2008), a Division of ERG.
The Three Principles Of Waste & Pollution Reduction:
There are three different strategies to reduce or prevent waste/pollution:
• Dematerialization: Increase resource productivity (use less to achieve the same function)
• Material/process substitution (different material/process to achieve the same)
• Reuse & recycling (use material and value-added over and over)
Dematerialization examples
• Advanced High Strength Steels (AHSS) in
automotive applications (25% weight reduction)
• Mass reduction of beverage containers
• Continuous casting technology in metals production
• Drip lines instead of sprinklers for irrigation
• Spaceframe design concept
• Miniaturization in the electronics industry
(e.g. precious metal content in consumer electronics)
Material substitution examples
• Steel, aluminum, magnesium, composites in automotive
• Steel, concrete, timber in construction
• Glass, steel, aluminum, plastics, paper in packaging
• CFCs instead of ammonia, chloromethane, sulfur dioxide
• MTBE instead of lead (TEL) as antiknock in fuels
• Bio-based plastics versus petroleum-based plastics
• Lead-based solder versus lead-free solder
Reuse and Recycling (Supply Loops, Closed-Loop Supply Chains)
A supply loop is constrained when it is not able to reprocess all targeted
end-of-life products into secondary output marketable at above-cost prices.
Raw materials
mining
Primary
materials
production
Materials
reprocessing
manufacture
Final
product
assembly
Product
sale and
delivery
Component
reprocessing
Product
reprocessing
Product
demand &
use
Eol product
collection
& inspection
End-of-life
product
disposal
Component
The reasons can be:
• Limited collection of end-of-life products
• Limited feasibility of reprocessing
• Limited market demand for the reprocessed secondary resources
Recycling Rates





Batteries are recycled at a rate of 99%
Metal has next highest recycling rate 6O%
Paper Products: 55%
Current Glass (Aluminum) container recycling rates:

11 Deposit States rates
64% (76%)

Remaining No-Deposit States rates 12% (35%)
Wood Pallets: 800 Million produced each year (300 M from
recycled or reclaimed content)

1/3 of US landfills no longer accept these pallets; others charge for
their disposal.
Supply Loops – Environmental Benefits
Primary
production
2.
Use
1.
Disposal
Collection &
reprocessing
1.
Diversion of product or process waste from landfill or incineration
by collecting them for economic value recovery via reprocessing.
2.
Generation of secondary resources from product or process waste and
displacement of primary resources, i.e. materials, components & products.
When are the environmental benefits from displacement more
significant than the benefits from avoided landfill / incineration?
Supply Loops – Potential Benefits from Displaced Primary Production
Material
Primary Production
(cradle-to-gate in MJ/kg)
Recycling
(scrap-to-gate MJ/kg)
Savings
Factor
Aluminum
194.7
10.3
19
Copper
~100
20 – 30
5 – 3.3
Steel
21.7
7.1
3
Steel section
33.3
16.0
2.1
PET
82.7
30.2
2.7
Paper
18
12
1.5
Glass
12
8
1.5
Product
Steel section
Cell phone
Primary Production
Reuse
Savings Factor
33.3 MJ/kg
5.2 MJ/kg
6.4
150-250 MJ/phone
2.5-5 MJ/phone
30-100
Could we replace all primary steel (BF/BOF) with recycled steel (EAF)?
BF: blast furnace
BOF: basic oxygen furnace
EAF: electric arc furnace
GHG emissions from global steel production in 2005 (in MMT CO2 eq)
MMT= Million Metric Ton
• 1020 MMT finished steel (1142 MMT crude steel)
• Scenario 1: All from basic oxygen furnace (BOF 2.021 kg CO2eq / kg)
• Scenario 2: All from electric arc furnace (EAF 0.3471 kg CO2eq / kg)
2500
MMT CO2eq
2000
1500
Factor 5.4
1000
500
0
100% BOF
100% EAF
Global crude steel production (in MMT)
1200
1000
800
600
640 MMT
scrap
generated
in 2005
400
2005
most consumed
EAF
602
(53%)
200
1950
BOF
540
(47%)
1960
1970
1980
1990
2000
GHG emissions from global steel production in 2005 (in MMT CO2 eq)
• 1020 MMT finished steel
• Current: ~ 70% recycling rate (?), 64% BOF, 33% EAF
• Feasible today but steel demand increases: 100% recycling rate, 47% BOF, 53% EAF
2500
MMT CO2eq
2000
Factor 1.4
Factor 1.75
64% BOF,
33% EAF
47%BOF, 53%
EAF
1500
1000
500
0
100% BOF
100% EAF
Should we reuse or recycle our cell phones?
Research by: Roland Geyer, Vered Doctori Blass, University of California, Santa Barbara
Background
• Estimated amount of cell phone subscriber in 2007: 2.5 billion
• Estimated end-of-life phones in 2005 in the USA: 130 million
(~ 0.55 wt% of total e-waste in the US)
• Estimated av. life time 18 months, collection rate < 20%
• More handsets reuse than recycled
Recycling potential in USA in 2005
Material composition
Plastics
Metric tons
wt% of US
consumption
40-50%
Glass and Ceramics 15-20%
Copper
1500
0.06%
Ferrous metals
~ 3%
Silver
40
0.5%
Non ferrous metals
22-37%
Gold
4
2.3%
Other
5-10%
Palladium
2
1.7%
Energy required to produce, collected and reprocess cell phones
Diversion from
landfill Edisp
Cell phone
use
Collection Ecoll &
reprocessing Erepro
Displaced production
Edisplaced
in
MJ/phone
Best case
reuse
Edisplaced
Material & product
markets
recycle
Edisplaced
reuse
Erepro
Ecoll
recycling
Erepro
Edisp
250
21.6
1
0.5
1.5
~0
Worst case 150
16.2
5
1
2
~0
Economics of cell phone recycling and reuse
Recycling (including reverse logistics)
Average Cost
Average Revenue
US 2006 (2006 $/phone)
7.88
0.75
UK 2003 (2006 $/phone)
11.36
0.90
Not profitable if recyclers have to bear the reverse logistics costs.
Reuse (including reverse logistics cost)
Total Cost
Average Revenue
US 2006 (2006$/phone)
9.8
17
UK 2003 (2006 $/phone)
12.76
23
Profitable even if refurbishers bear the reverse logistics costs.
Closer look at cell phone recycling
Currently, only copper and the precious metals are being recovered.
Ag
Al
Au
Cr
Cu
Fe
Ni
Pb
Pd
Sn
Zn
Total
Mass (in Grams)
Metal price in Value of recoverable metals (in cents)
High
Low
2006 (cents/g) High
Low
36.01
0.90
0.11
32.41
4.03
7.20
1.52
0.27
1.94
0.41
2151.71
0.033
0.026
70.15
56.12
0.72
0.20
0.82
0.59
0.16
0.68
20.68
9.30
14.09
6.33
6.62
2.70
0.10
0.66
0.27
2.74
0.70
2.43
6.64
1.70
0.80
0.28
0.17
0.14
0.05
1060.97
0.09
0.00
93.37
0.00
0.80
0.43
0.92
0.74
0.39
0.92
0.27
0.35
0.32
0.10
41.57
15.56
221.03
69.56
However, together they make up 95% of the total material value.
Conclusions
• More cell phones are currently reused than recycled
• Reuse is profitable even if collection cost is included,
one of the reasons being the short lifetime of cell phones
• Recycling is only profitable without the collection cost
• Recycling currently only recovers copper and precious metals,
i.e. 70-84% of the embodied energy and 95% of the economic value
• The displacement rate of metal recycling is estimated to be high
• The displacement rate of cell phone reuse is estimated to be low
•WHY?
• At current estimated displacement rates cell phone recycling might
generate more environmental benefits than reuse
Reuse & Remanufactured Products

How do you feel about buying these used or
remanufactured products?
 (rate
1 neutral to 3 very strongly on how strong you
feel)
 Unattractive/Disgusting
 Safety and Reliability Issues
 Purchase is more green
Technology Product
 Unattractive/Disgusting
 Safety
and Reliability
Issues
 Purchase is more green
 Would
buy it if it were
X % of new price?
Household Product
 Unattractive/Disgusting
 Safety
and Reliability
Issues
 Purchase is more green
Would buy it if it were X
% of new price?
Personal Product
 Unattractive/Disgusting
 Safety
and Reliability
Issues
 Purchase is more green
Would buy it if it were X
% of new price?
Reuse
Other examples for reuse:
• Beverage containers and other packaging
• Printer/copier cartridges
• Single use cameras
• Electric motors of analog photocopiers
• Cell phones
• Tire retreading
• Automotive spare parts
Fundamental reuse challenges:
• Challenge to competitively match supply with demand
• Newness seems to have intrinsic value for most consumers
• OEMs do not usually support reuse (almost no design for reuse)
• Reused products are seldom perfect substitutes
• Therefore unclear to what extent reuse displaces new production
• Product reuse has conflict potential with product innovation
Question:
How can innovation improve the situation?



Strategies for reducing
waste are not keeping
up.
Market demand for
many materials =
volatile
As Thomas Edison said
about inventing:
“You need a good
imagination and a pile
of junk.”
Factors influencing
3Rs vs. Reverse Supply Chain (EPR)
Factors affecting RSC
implementation
Factors driving 3R Rate
Legislation
Country & State Specific Policies: Product Standards &
bans, Performance Standards, Charges& Taxes, Emissions
trading, Subsidies & Information Disclosure
Customer demand
Customer Demand (both consumer & retail customer)
Strategic cost/benefit
Strategic cost/benefit
Firm’s environmental concern
Firm’s environmental concern
Volume and quality of returns
Overall Market Demand for materials
Incentives & available resources
between partners
Incentives & available resources between partners
Integration & coordination of SC
Integration & coordination of SC
Carter & Ellram (1998), Carter & Carter (1998), Bowen et al (2000), Stevens (2004), Choinard et al
(2005), Dahlatshahi (2005), Tan & Kumar (2006), Walker et al (2008), Guide & Van Wassenhove
(2009), Rahman & Subramanian (forthcoming IJPE) and others.
Incremental vs. Radical Innovation (3R Context)
Incremental
Innovation
Radical
Innovation
Product Redesign
Improvement to a product
within its current typology
Functional
Significant change in the
device concept to provide
the same function as the
device it replaces
Process Redesign
Improvement to a process
within its current typology
Institutional
Replacement of products
with services
System
Significant changes in the
device concept,
infrastructure and user
learning
Washing Machine
System-Radical Innovation
How can we get more recycling innovation?

System or Supply Chain


Significant changes to
device concept, access to
& flows of EOL products
Product and Process
Design & Technologies for
Re-processing and
Disassembly
 Concept & Behavior shifts


Market Demand vs.
Legislation
Case analysis findings: Innovation
(I vs. R) as a function of key drivers
Key Drivers
Innovation
Market
Legislative
Product/
Process
Low Value: I
High Value: I
High Value: I (WEEE &
Autos)
Low Value: I
System/
Low Value: I
Radical (all types) with
Supply Chain High Value: I & R
Autos and EPR products.
(Functional) in shift of
durable product to
services or
“servicizing”
Approaches & Challenges
Market Demand-based Approach

Incremental innovation seen with low value

Customers demand but may not participate

Packaging innovations (weight, unessential
packaging, use of concentrates, refills, different
materials)


Legislative Policy-based Approach
Incremental innovations face diminishing margins
of return
Radical innovation with high value

Hard to create system shifts without high value

Serviciszing & sharing products (company
maintains ownership and others lease as needed)

US demand fluctuates for material causing
uncertainty & risk avoidance >fragile

China demand for materials is high so radical
process innovation happens there


Incremental innovation more likely
with standards, emissions trading,
required information disclosure and
voluntary recycling. (Cander, 2004)
Radical innovation shown with
product bans, charges & taxes,
subsidies and EPR (EU autos)


Shift customer habits in major ways
Product Innovations



Design for Dismantling & Recycling
(DFD/DFR)
EEE producers
Technology & supply chain
innovations

Networks of dismantlers/shredders
Example Market Driven: Chinese Recycling Xmas
Lights , Minter (2011)
Servicizing or Shared resources

B2B
 Copiers
 Equipment
 Others?

B2C
 Cars
 Clothes
 Wineries
Pros & Cons of Servicizing & Sharing
Questions & Thoughts