Secondary management of materials and parts
<\/strong>For over a decade, a “green trend” has been observed in production and logistics. The European Union’s policy on promoting sustainable development is making environmental legislation more restrictive year by year. This phenomenon forces many industries to change their traditional approach to production processes towards more eco-friendly ones. The so-called Extended Producer Responsibility (EPR) policy, in force in selected EU member states, has necessitated the reconfiguration of traditional supply chains. They have been expanded to include processes related to the post-sales phase, in particular, the management of products used by customers (e.g., household appliances, computer equipment, cars).<\/p>
Figure 1 presents the concept of an extended supply chain, in which we deal with a so-called closed-loop material flow. In Figure 1, material flows are marked with arrows. The flow of the material stream from supply sources to the consumer is often called the primary flow and includes all activities related to the purchase of materials, their transport and storage, and activities related to creating added value in the process of transforming raw materials/components into a final product. The last link is broadly understood distribution, covering all activities related to delivering the product to the final recipient, including transport, storage, packaging, and sales. In the case of closing the material flow loop in the supply chain, distribution can optionally be expanded to include activities related to the collection of products and consumables used by customers (e.g., printer toners).<\/p>
Secondary processes in the supply chain are associated with the collection of used products and raw materials as part of reverse logistics and their secondary management (remanufacturing or recycling). These processes begin with the delivery of used products and materials to the place of their further management. The next necessary stage is an inspection to verify the technical condition of the collected products. As a result, the material streams are separated into those that can be reused and those that should be disposed of in a landfill.
Secondary processing takes various forms, depending on the specifics of the used products and materials. In the case of complex products with high residual value, it is reasonable to process them in a remanufacturing process (also called factory regeneration), while maintaining the existing basic functionality. Remanufacturing means secondary management that allows for the full restoration of the original utility value of the product, and often also its improvement (upgrade), by replacing worn-out elements with parts and subassemblies with higher technical parameters. A typical remanufacturing process consists of the following stages:<\/p>
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disassembly of individual elements<\/div>
<\/li>technical condition inspection of individual components<\/div>
<\/li>identification of elements that require replacement<\/div>
<\/li>cleaning of all elements<\/div>
<\/li>replenishment of missing elements<\/div>
<\/li>reassembly<\/div>
<\/li>software installation (drivers) / adjustment of technical parameters<\/div>
<\/li>inspection.<\/div>
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<\/ul>Remanufacturing allows for saving 50% – 75% of production costs compared to manufacturing a new product from natural raw materials. This is due to capturing the final added value in the form of materials, energy, and labor. It is a more advanced form than reprocessing, but its application is not always profitable. Lund defined the criteria for profitable remanufacturing, including:<\/p>
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the product is a durable good<\/div>
<\/li>the product exists in many configurations, yet consists of standardized parts<\/div>
<\/li>the cost of product collection is low compared to its residual value<\/div>
<\/li>the technology is stable<\/div>
<\/li>customers are informed about the availability of remanufactured products on the market.<\/div>
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<\/ul>In cases where the greatest residual value is contained in the basic raw material, it becomes reasonable to process it through recycling (e.g., paper products, aluminum). In cases where reprocessed parts or raw materials are incorporated into the production of new products, they can become a profitable alternative to the existing raw material base. Hence, the term “re-supply,” i.e., a secondary supply base, appears more and more often in English-language literature. Effective secondary processing is possible when the product’s subsequent management is considered already at the design stage.<\/p>
The article comes from the “Logistyka” magazine 4\/2011.<\/p>
L2011-4s20.pdf<\/a>