Reverse logistics may be applied to several stages of the logistic chain. Both the
materials management part and the physical distribution part of the logistic
chain are potential areas of application. In this article we study the application
of reverse logistics in the area of physical distribution: the reuse of secondary
packaging material.
Secondary packaging is packaging material used for packaging products
during transport from a sender to a recipient, either in retail or in industry[3].
Traditionally, cardboard boxes are used as secondary packaging material. Since
cardboard boxes can be used only once, they are defined as one-way packaging
material.
In contrast, returnable packaging is a type of secondary packaging that can
be used more than once in the same form. Although returnable packaging may
be of different types, such as returnable containers, pallets, or slipsheets, we
will use the term returnable containers, irrespective of the actual type of the
returnable packaging.
Motivation
An initial question one should ask when thinking about introducing this
equipment is whether it offers real environmental benefits. This means that the
processes of producing and disposing of returnable containers, together with
the additional return logistic activities, should not be more harmful to the
environment than the use of one-way packaging material. This question has
been investigated by the Frauenhofer Institut, which specializes in studies of
material flows and packaging logistics. In 1993 this Institute published the
results of an ecological comparison of one-way packaging and returnable
containers[4]. On the basis of four criteria, it concluded that returnable
containers are less of a burden to the environment than one-way packaging
material, provided each container is used a certain minimum number of times
during its lifetime. This minimum number is dependent on the type of
container. The criteria taken into consideration in this study were energy
consumption, emission to the atmosphere, water consumption and pollution,
and solid waste.
The use of systems of returnable containers is being prompted by a growing
concern for the environment and by regulations from the government. For
example, in 1991 the Dutch government and industry signed the Packaging
Covenant forcing industry to think of new ways to deal with packaging
material[5]. In broad terms, the Packaging Covenant requires that in the year
2000 the total amount of new packaging material in The Netherlands should be
reduced by 10 per cent (relative to 1986), and that the total amount of packaging
waste to be dumped in the ecosystem should be reduced to zero.
Similarly, the German Packaging Order requires manufacturers to take
responsibility for their packaging waste. In order to comply with this, German
manufacturers and retailers created the non-profit organization Duales SystemIJPDLM
25,2
58
Deutschland (DSD) to collect packaging material for recycling. Participating
companies pay a per-item fee based on the amount of packaging used and
receive in return a green dot (grüne Punkt) symbol that appears on their oneway
packaging material. The DSD commits itself to collecting and recycling
this material. The system is still suffering from a number of growing pains,
which, of course, works to the relative advantage of systems employing
returnable containers.
But, apart from increasing responsibility towards the environment and
legislation, several companies have discovered that the reuse of packaging
material can also be commercially rewarding. An example of this is the
company John Deere & Co., which has invested $20 million in a returnable
container programme with its suppliers of assembly parts. This programme is
economically feasible, and a positive cash payoff is expected by the time a
comprehensive recycling law comes into effect[6]. Another example is provided
by Herman Miller Inc., which claims to have saved over $600,000 in two years
using returnable packaging material for steel shelves. Returnable containers
are also applied successfully by IBM and Ford[7] and by General Motors and
Toyota[8]
Reverse logistics may be applied to several stages of the logistic chain. Both thematerials management part and the physical distribution part of the logisticchain are potential areas of application. In this article we study the applicationof reverse logistics in the area of physical distribution: the reuse of secondarypackaging material.Secondary packaging is packaging material used for packaging productsduring transport from a sender to a recipient, either in retail or in industry[3].Traditionally, cardboard boxes are used as secondary packaging material. Sincecardboard boxes can be used only once, they are defined as one-way packagingmaterial.In contrast, returnable packaging is a type of secondary packaging that canbe used more than once in the same form. Although returnable packaging maybe of different types, such as returnable containers, pallets, or slipsheets, wewill use the term returnable containers, irrespective of the actual type of thereturnable packaging.MotivationAn initial question one should ask when thinking about introducing thisequipment is whether it offers real environmental benefits. This means that theprocesses of producing and disposing of returnable containers, together withthe additional return logistic activities, should not be more harmful to theenvironment than the use of one-way packaging material. This question hasbeen investigated by the Frauenhofer Institut, which specializes in studies ofmaterial flows and packaging logistics. In 1993 this Institute published theresults of an ecological comparison of one-way packaging and returnablecontainers[4]. On the basis of four criteria, it concluded that returnablecontainers are less of a burden to the environment than one-way packagingmaterial, provided each container is used a certain minimum number of timesduring its lifetime. This minimum number is dependent on the type ofcontainer. The criteria taken into consideration in this study were energyconsumption, emission to the atmosphere, water consumption and pollution,and solid waste.The use of systems of returnable containers is being prompted by a growingconcern for the environment and by regulations from the government. Forexample, in 1991 the Dutch government and industry signed the PackagingCovenant forcing industry to think of new ways to deal with packagingmaterial[5]. In broad terms, the Packaging Covenant requires that in the year2000 the total amount of new packaging material in The Netherlands should bereduced by 10 per cent (relative to 1986), and that the total amount of packagingwaste to be dumped in the ecosystem should be reduced to zero.Similarly, the German Packaging Order requires manufacturers to takeresponsibility for their packaging waste. In order to comply with this, Germanmanufacturers and retailers created the non-profit organization Duales SystemIJPDLM25,258Deutschland (DSD) to collect packaging material for recycling. Participatingcompanies pay a per-item fee based on the amount of packaging used andreceive in return a green dot (grüne Punkt) symbol that appears on their onewaypackaging material. The DSD commits itself to collecting and recyclingthis material. The system is still suffering from a number of growing pains,which, of course, works to the relative advantage of systems employingreturnable containers.But, apart from increasing responsibility towards the environment andlegislation, several companies have discovered that the reuse of packagingmaterial can also be commercially rewarding. An example of this is thecompany John Deere & Co., which has invested $20 million in a returnablecontainer programme with its suppliers of assembly parts. This programme iseconomically feasible, and a positive cash payoff is expected by the time acomprehensive recycling law comes into effect[6]. Another example is providedby Herman Miller Inc., which claims to have saved over $600,000 in two yearsusing returnable packaging material for steel shelves. Returnable containersare also applied successfully by IBM and Ford[7] and by General Motors andToyota[8]
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