Prof. Dr.-Ing.

Jörg Franke 09 - Disposal logistics

Institute for Factory Automation
and Production Systems
Friedrich-Alexander-University Erlangen-Nuremberg

Lecture ISCM @ vhb

For any questions and support regarding this lecture unit you can contact the
responsible person from institute FAPS.

Contact details:
Dipl.-Ing. Markus Hubert
Email: markus.hubert@faps.fau.de
Phone: 0911 / 5302 9086
Website: http://www.faps.de/1/lehrstuhl/mitarbeiter/mitarbeiter-detail.html?m_id=75

2
This course will provide an overview of structures, aims, systems and
strategies concerning ‘International Supply Chain Management (ISCM)’.

1. Integrated logistics, procurement, materials management and production

2. Material inventory and material requirements in the enterprise

3. Strategic procurement International Supply Chain Management

4. Management of procurement and purchasing

5. Fundamentals of production systems

6. Warehouse management, picking systems, in-plant material handling, packaging

7. Distribution logistics, global tracking and tracing

8. Modes of transport in international logistics

9. Disposal logistics

10. Logistics controlling

11. Global logistic structures and supply chains

12. IT systems in supply chain management

13. Sustainable supply chain management

3
Lecture 9 aims to teach you the structure, goals and tasks of disposal logistics.

There has been a structural change in product life cycles which also effects the
management of waste. Disposal logistics plays an important role to actualize the different
processes and strategies of waste management.

After this lecture you should be able to:

 Know the targets and objects of disposal logistics

 Describe the strategies and processes of waste management
 Have an understanding of the different services of disposal logistics
 Distinguish between internal and external management of waste disposal.

International Supply Chain Management

4
Disposal logistics.

 The structural change in product life cycles and the Waste Act

 Objectives and objects of disposal logistics

International Supply Chain Management

 Strategies and processes of waste management

 Services of disposal logistics

 Internal and external management of waste disposal

 Evaluation of disposal concepts

5
The structure of product life cycles has changed from a linear to a cyclical
system.

Linear system

Cyclical system
Resource
Resource/Waste

Extraction

Producer
Producer

Supply /
Distribution Disposal
Product responsibility Supply /
of the producers Distribution

Consumer
Consumer

Disposal

Waste The structural change from a linear to a cyclical system brings a fundamental
change in the product life cycles and presents companies with new logistical
challenges. The manufacturer now has higher responsibility for the product and its
disposal.

Ref.: [5]

6
The legal background for encouraging recycling is the Recycling and Waste
Management Act (german: KrW-/AbfG)

The Recycling and Waste Management Act (German: KrW-/AbfG) :

 Was enforced in 1994 and replaced the old law Prevention and Disposal of Waste
(German: AbfG)
 Promotes the conservation of natural resources and the protection of environmentally
friendly waste disposal
 Guarantees the manufacturer´s responsibility for their products
 Represents the maxim “Prevention before Recycling before Disposal“

Product responsibility includes („Polluter Pays“ principle):

 Development of reusable products
§22(1): „Whoever develops, produces or
 Technical durability of products distributes products contributes to the
fulfillment of the goals of recycling and product
 Product labelling stewardship.”

 Withdrawal of products and their recycling or their

environmentally friendly disposal

Ref.: [3] [5]

7
Disposal logistics

 The structural change in the product life cycles and the waste act

 Objectives and objects of the disposal logistics

International Supply Chain Management

 Strategies and processes of waste management

 Services of disposal logistics

 Internal and external management of waste disposal

 Evaluation of disposal concepts

8
Legislation, frameworks and new social norms have resulted in new ecological
and economic objectives of waste management.

Definition of disposal logistics: “The scientific discipline that deals with the technical material flow
optimization of internal and external waste streams."

Objectives of the disposal logistics

Economic objectives Ecological objectives

Reduction of logistics costs Conservation of resources

• Warehouse costs • With reusing, recycling and

• Transportation costs Potential conflicts environmentally friendly disposal
• Separation costs -
• Recycling Targets can compete Reduction of emissions
• Proper disposal with or influence
each other • With optimized logistics
Service to the customer

• e.g. Interaction of old equipment

The implementation of economic and ecological objectives can lead to conflicts. Recycling raw materials,
for example, is expensive and competes with economic goals. However, synergetic effects can also be
used. Buying recycled precious metals, for example, can be cheaper in comparison to standard raw
materials.

Ref.:[1] [2] [4]

9
Disposal logistics focuses on the handling of residues of a company.

The objects of disposal logistics are not uniformly referred in literature. The terms "residue" and "waste" are
used synonymously. Apart from the actual target product a company generates unwanted byproducts throughout
the product life cycle. These residues can be categorized according to various criteria. The main distinction is
between residues(waste) for recycling and those for disposal.

Output of a company

The objects of the

disposal logistics
Target product Residue / Waste (in broader sense)

Waste for disposal

Waste for recovery
(waste in the strict sense)

recyclable

Through strategies like reuse and recycling this part of Recycling of these materials is not possible, too
waste can be reincorporated into the product life cycle complex or too expensive.
as a new resource.

Ref.:[1] [2]

10
Residues are generated in different stages of the product life cycle and can also
be distinguished by their aggregate state.

Product life cycle

Production Distribution Consumption

Waste material Packaging Packaging

Examples of
Old product

residues
Sewage Chemicals Empties

Production emissions Transport emissions Usage emissions

Aggregate state of the residue: solid liquid gas

In addition to the place of generation and the state of aggregation, there are a number of other distinguishing
criteria for residues. An example would be the economic value.

Type of residue Influences Disposal strategy

Ref.: [3]

11
Disposal logistics

 The structural change in the product life cycles and the waste act

 Objectives and objects of the disposal logistics

International Supply Chain Management

 Strategies and processes of waste management

 Services of disposal logistics

 Internal and external management of waste disposal

 Evaluation of disposal concepts

12
The scope of waste disposal ranges from prevention and reduction to recycling
and disposal.

Disposal strategy Content Example

To avoid the emergence of new waste in

Prevention advance
Elimination of certain packaging

Prevention before recycling before disposal

Reduction
 Quantitative Use of resource-saving alternatives Use of less-polluting trucks
 Qualitative
Recycling

Reuse Recycling is processing used materials (waste) into new products to prevent
wasting of potentially useful materials, reduce the consumption of fresh raw
materials, reduce energy usage and to reduce air and water pollution.
Utilization

Landfilling
The final discarding of waste from a
Disposal business perspective.
Combustion
Composting

Ref.: [4]

13
In the field of recycling, there are several management strategies based on
reuse and utilization.

Disposal strategy Content Example

Prevention
Reduction
Reuse Retention of material shape

- Renewed use of the product for the

1 same purpose
Introduction of reusable packaging

Using old yogurt glasses as drinking

2 - Use of the product for another purpose
glasses
Recycling

Utilization Loss of material shape

- Renewed use of equivalent material in a

1 production process
Recycling glass and paper

Manufacturing park benches from old

2 - Use in a new application
plastic packaging

Disposal
Ref.: [4]

14
Real-World example Daimler AG

 The EU Commission will set the recycling rate for automobiles at 95% by 2015.
 85% of the materials must be re-used through recycling, 10% may be used for energy recovery and
only 5% may be disposed.

Waste management activities from Daimler:

 Use of lightweight materials (like aluminum)

 Weight reduction  reduced fuel consumption  reduced emissions

 Increased use of renewable resources (such as coconut or cotton)

 Use of various environmentally friendly or recyclable plastics

 Continuous reduction of hazardous substances such as heavy metals

Ref.: [4]

15
 In the flow chart of a product life cycle there are different recycling systems
between supplier, companies and purchaser.

Product/ Product/
Factor Supplier Company Purchaser
factor factor
Production/
Production Production
consumption
2

1
1
1 Use for other 2 Use for other
2 purpose purpose

Resource
Resource

Reuse
Reuse

1 Retention of the
Retention of the
Utilization material shape
material shape

Waste
Waste
Reconditioning
Reconditioning

Change in
material shape
Waste

Waste
Reconditioning
Waste

Disposal site
Ref.: [4]

16
Disposal logistics

 The structural change in the product life cycles and the waste act

 Objectives and objects of the disposal logistics

International Supply Chain Management

 Strategies and processes of waste management

 Services of disposal logistics

 Internal and external management of waste disposal

 Evaluation of disposal concepts

17
Disposal logistics is a part of waste management and provides important
services.

Disposal
Disposal logistics

Logistic processes Disposal processes

Core services Additional Information Reuse Utilization Disposal

services services
• Storage • Collection • Landfilling
• Transport • Sorting • Order • Combustion
• Handling • Packaging handling • Composting

Reconditioning

Separation Transformation

• Disassembly • Crushing
• Filtration • Solidification
• Etc. • Etc.

Ref.: [3]

18
The core services of disposal logistics include various decision factors and
organization alternatives.

Disposal logistics services Decision factors Design alternatives

Warehousing Requirement planning for storage - Deterministic
space - Stochastic

Warehouse space allocation - Separated storage areas

- Shared storage areas

Construction type of the warehouse - Outdoor

- Covered
- Closed
Core Conveyor system - Continuous conveying
Transport
services - Discontinuous conveying

Transport organization - Direct transportation

- Ring or star traffic

Handling Handling equipment - Continuous handling equipment

- Discontinuous handling equipment

Organization of handling - Reloading process

- Changing process

Collection Organization of collection and - Separated collection

separation - Mixed collection with subsequent separation
and - Mixed collection without subsequent separation
separation
Additional Collection principle - Synchronous
- Regular
services - Irregular

Packaging Shape of the containers depending - Carrying

on their function - Enclosing
- Closing

Order Company affiliation of the participants - Intra-organizational focus

Information involved in the exchange of - Inter-organizational focus
services handling information

Ref.: [3]
19
Packaging can be categorized, has certain legal responsibilities and must be
dealt with differently in their disposal.

Transport packaging Outer packaging Sales packaging

Term Transport packaging is used Outer packaging is used as Sales packaging is for the
for cargo transport and additional packaging (e.g. theft consumer to transport the
its protection from a protection or advertising) goods or for storage until
manufacturer to trade consumption

Examples Pallets, packing, shipping, Box over can, blister over box Box, blister, can, bottle
cargo protection guarantee

Responsibilities for - Return to supplier - Remove before selling - Withdrawal from the end
trade and industry - Provide recycling - Set up collection containers user and return to the
- Provide recycling supplier
- Provide recycling

Ref.: [3]

20
Waste material collection and separation can be organized and designed
variedly.

Mixed collection Mixed collection Separated collection

with subsequent
sorting

Organization - Providing different types - Providing different types - Separated collection of

of residues in mixed form of residues in mixed form residue types at the
at their origin at the origin origins
- Collection - Collection - Return of the residues to
- Separation of the their specific use
different residue types
Sorting unit - Not given - Given - Largest

Environmental target It`s hardly possible to reuse - Significantly higher reuse - High reuse rate of
achievement the valuable materials in the rate residues possible
residue mixtures - Environmentally relevant
accident risks

Ref.: [3]

21
Disposal logistics

 The structural change in the product life cycles and the waste act

 Objectives and objects of the disposal logistics

International Supply Chain Management

 Strategies and processes of waste management

 Services of disposal logistics

 Internal and external management of waste disposal

 Evaluation of disposal concepts

22
Disposal logistics can be divided into different phases similar to supply
logistics – they also interact with each other.

Supply logistics

Procurement logistics Production logistics Distribution logistics

Flow of resources and products

Information exchange and integration

Flow of residues

Reuse Reconditioning Redistribution

logistics logistics logistics
- Supply and reuse of secondary - Collection and separation - Receiving and return of waste
raw materials - Interim storage for residues materials
- Provision of reusable systems - Material flows for recycling

The logistical processes of disposal can be classified into various stages of logistics similar to the classic
supply logistics. For the management of these processes the ultimate goal is an effective and efficient
management of residue flow. To achieve this, it is necessary to establish a continuous communication within
the disposal chain and between supply and disposal.

Disposal logistics Ref.: [2]

23
Waste management is primarily concerned with an effective and efficient flow of
disposals.

.
Waste management Planning

Controlling Organizing
Sink Source
Flow of residues
Output Input
supply of information
human resources management

To implement a successful waste management with the goal of an effective and efficient waste
flow the following aspects have to be considered:

• Creation of functional structures and process organization

• Definition and delineation of competences and areas of responsibility
• Integration of target-performance comparisons during the planning and implementation phase
• Guarantee of flexible adaptability within the disposal system

 high dynamics in the international market,

legislation, scientific progress,
ecological changes

Ref.: [2]

24
Waste management can be divided into a normative, strategic and operational
dimension.

Normative Strategic Operational

dimension dimension dimension

waste management policy

Development of strategy Implementation of policy
and culture
for the realization of the and strategy in the
and the vision of a
waste management policy operating business
company

• How does a company want
to appear to the outside
world?
• What environmental policy
is to be pursued?
• Internal or external • How exactly are the routes
services? for re-distribution planned?
• Where are collection points
set up?

The implementation of a waste management system usually follows the top-down principle. Company
management dictates a vision of disposal management (normative dimension). The development of strategy is
based on these specifications, takes in all the important decisions and the operating business implements
everything by coherent organization.
Ref.: [2]

25
Factors influencing waste management and disposal logistics.

- Ecological responsibility
Change in values - Limits of growth
- Environmentally responsible employee
Social and
governmental
requirements - Waste Disposal Act
- Packaging regulations
Laws - Hazardous materials regulations

Factors - Environmentally friendly products

Customer requirements - Transparency
- Service
- Disposal
influencing

Market requirements

- Market entry of new competitors

Competitive behaviour - Communication strategy

- Type and extent of residual

Waste Characteristics of the materials
- Temporary structure of
management production process occurrence
& - Site of occurrence
Disposal In-plant conditions
logistics
Increasing disposal - Shortage of landfill capacities
costs
Ref.: [3]

26
Different types of costs are incurred in the core, additional and information
services of logistics processes.

Disposal logistics costs represent about 5-15% of the total logistics costs. In all disposal responsibilities there are
additional costs apart from the cost of disposal processes (reuse, recycling, ...) and reconditioning which are
attributable to pure logistics services.

Examples of: Disposal logistics costs

Core services - Warehouse rental costs

- Transportation costs
• Storage
• Transport
- HR costs for handling
• Handling
Logistics processes
(disposal logistics)

Additional - Packaging costs

services - HR costs for collection, separation and
• Collection
sorting
• Sorting
• Packaging

Information - HR and IT costs for planning and

services managing logistics process order
• Order
management
handling

Ref.: [2]

27
Disposal logistics

 The structural change in the product life cycles and the waste act

 Objectives and objects of the disposal logistics

International Supply Chain Management

 Strategies and processes of waste management

 Services of disposal logistics

 Internal and external management of waste disposal

 Evaluation of disposal concepts

28
Development of an internal disposal concept.

For the development or revision of an internal disposal concept the following sequence is provided:
1. Analysis of current states
 Inventory of internal material and waste streams
 Clarification of organizational responsibilities for utilization and disposal
 Composition of waste materials and quantity
 Costs (actual and future)

2. Development of an alternative disposal concept

 Implementation from the top-down principle (normative dimension  strategic dimension)
 Which waste management policy does the company want to pursue in the future?
 How can this policy be implemented in a strategic way?

 Design of core, additional and informational services

 Contact with public and private waste disposal companies and verification of legislation
 Establishment of internal competences

3. Introduction of a new waste disposal concept considering the following points:

 Cooperation with all internal and external agencies
 Selection of suppliers considering the new disposal concept
 Agreement on deposit and return policies with suppliers
 Request of third party suppliers´ verifiable evidence of environmentally friendly disposal
 Use of recycled stock markets
Ref.: [4]

29
Disposal concepts can be evaluated according to their ecological and economic
perspectives.

Analogous to the objectives of disposal logistics their assessment can also be divided into
ecological and economic aspects:

Economic evaluation:
 Process-based cost accounting
 Consideration of waste disposal service and marketing aspects and recycling concepts as
an added value to customers

Ecological evaluation:
 To evaluate the environmental impact of disposal logistic processes there is an "ecological
balance sheet" in the context of a "green audit".
 This balance is the basis for the Green Label (environmental safety badge) of the EU
 A test determines the environmental impact of a product in development, production,
distribution and use
 Which process generates equal amount of pollution?

Ref.: [4]

30
To create the inventory analysis as part of the ecological balance sheet the
matrices below can capture all the necessary data of a product life cycle.

Consumption of Affects the quality of Waste

Resource Energy Water Water Air Ground

Raw material extraction

and treatment
Conversion to basic
materials
Production of
construction material

Production, conditioning

Distribution

Use

Disposal, transport

With the help of a matrix all information can be captured within an ecological balance
sheet. To acquire the required data, the construction of complex internal and external
environmental information systems is necessary. These systems, however, allow for
continuous improvements and identify all weak points.
Ref.: [4]

31
For the development and evaluation of the disposal concept there is also the
need for an assessment of the partner companies.

The assessment of business partners and suppliers is usually carried out by a so-
called audit:

 An audit is an analysis process used to evaluate processes, based on the fulfillment of

requirements and guidelines.

 The process requires a trusting relationship between the two companies and their shared
information and data.

 As part of waste management, system supplier audits are conducted to determine whether
the partner is acting in accordance with its own disposal concept. Particularly environmental
aspects have to be considered in this case.

 The holistic view of the product life cycle (also considering the suppliers) is necessary to
realize an innovative disposal concept and an effective recycling strategy with the target
phrase "prevention before recycling before disposal“.

32
The following questions should test your knowledge of disposal logistics.

1. Please describe the change in the product life cycle described in this lecture!
2. Please explain the „Polluter Pays“ principle in the context of a changing structure of product
life cycles.
3. What is the Recycling and Waste Management Act ?
4. What are the two objectives of disposal logistics (name and describe in detail)? Which
conflicts can arise?
5. How can you categorize the objects of disposal logistics in general (considering the output
of a company)? In which phase of the product life cycle do they occur? Please give two
examples per phase.
6. Please name all possible disposal strategies. Describe the related content and give
examples.
7. How are the services of disposal logistics categorized .
8. Please illustrate the phases of disposal logistics in a sketch. Give examples and explain the
analogy to supply logistics.
9. Waste management can be divided into 3 dimensions. Name those dimensions and explain
them in context.
33
References / recommended reading for this lecture.

[1] Pfohl, H.-C.: Logistiksysteme: Betriebswirtschaftliche Grundlagen, Springer, Berlin, 2009.

[2] Klaus, P.; Krieger, W.: Gabler Lexikon Logistik: Management logistischer Netzwerke und
Flüsse, Gabler Verlag, 2008.
[3] Schulte, C.: Logistik, Vahlen, München, 1999.
[4] Wannenwetsch, H.: Integrierte Materialwirtschaft und Logistik, Springer, Berlin, 2010
[5] Ohlig, B.: Kreislauforientierte Entsorgungslogistik, Grin Verlag, 2007.

34
Prof. Dr.-Ing. Jörg Franke
Institute for Factory Automation
and Production Systems
Friedrich-Alexander-University Erlangen-Nuremberg

Thank you
35