An interview with Bernhard Albers, Logistics Systems Manager at Fiege relog GmbH.
Iwo Nowak: Is reverse logistics gaining more importance during a crisis, or is it a result of changes in the approach to this issue in recent years?
Bernhard Albers: Reverse logistics is playing an increasingly important role, and not just because of the crisis or the discussion regarding sustainable production and logistics. Innovative strategies help develop markets and introduce new products to them. Soon, we will be evaluating companies based on one specific skill – those who care about their image and drive sales should know how to reverse the cycle so that their product returns to the point of sale. Activities related to the recovery of products that no one wants, that no one needs, or that have reached the end of their life cycle are becoming as important as marketing strategies. Experts claim that obtaining materials for reuse from waste provided by civilization and production residues will often be more profitable than manufacturing them from scratch. Reverse logistics is gaining particular importance at this moment; it is becoming a source of raw materials and is increasingly defining new business models and flow processes. It is no longer a niche, but a strategic business activity.
I. N.: Are customers themselves more interested in the issue of reverse logistics, or are there instruments encouraging them to do so?
B. A.: Contrary to the assumption that all European Union directives aim to make producers responsible for the goods they manufacture, end-of-life product strategies will become important the moment producers are required to accept returns. Their role is to decouple economic growth from the amount of waste generated – in accordance with the guidelines of the European Commission for the Environment – and to protect resources. While this task goes far beyond standard logistics operations, the industry needs it. Sectors, including the automotive industry, have long introduced strategies facilitating the acceptance of returns. So-called life cycle engineering provides the ability to disassemble and recover products and components so that they can be reintroduced into the production process on an industrial scale. The Fiege Group recognized this trend at an early stage of its development and took appropriate steps in this direction by launching a specialized facility that implements processes related to the reverse logistics of waste electrical and electronic equipment within the supply chain. Currently, Fiege relog offers a full range of services in terms of comprehensive solutions for reverse logistics. Since its inception, the company has undergone a transformation and has evolved from a project-oriented company into a thriving enterprise.
I. N.: And what does it look like in more detail?
B. A.: Reverse logistics as we perform it consists of using logistics as a means to provide additional services that constitute added value for customers. It is the company’s duty to develop such concepts in the sphere of management that will help coordinate logistical and technological processes that go beyond the supply chain in reverse logistics, starting from internal processes of one’s own and ending with global supply chain management. Choosing a supply chain system that meets expectations – for an entity wholly owned by the Fiege Group – is as much a “daily matter” as, for example, organizing large-scale processes. Reverse logistics as performed by Fiege relog covers all processes within the supply chain related to the redistribution, collection, sorting, refurbishment, and disposal of returned products. Fiege relog engineers, together with the manufacturer, prepare new ways and possibilities for when a product’s life comes to an end. Various questions arise, to which different answers can be given depending on the industry and type of product: can the item be marketed, refurbished, reused, or processed? Or perhaps it needs to be disposed of? Logistics should be understood as conscious thinking in specific cycles, which entails reuse, refurbishment, market introduction, disassembly, and the use of components. Reverse logistics is therefore more than just the simple transport of old parts and materials. It is a specific form of logistics that offers manufacturers and importers integrated solutions that give unsold products, returns, or old equipment potential added value.
I. N.: When did Fiege carry out the first project of this type and for which clients? What were the benefits associated with it? Have there been any changes since then?
B. A.: The knowledge that Fiege relog refers to is the handling of the European return system for waste electrical and electronic equipment, which, since it came into force based on the Act of March 24, 2006, in Germany, and was subsequently introduced throughout Europe, has become a widely used solution. The adoption of the directive by member states meant that producers responsible for the manufactured goods faced a pan-European challenge. However, before the project was implemented, many barriers had to be overcome, both linguistic and administrative. Based on partnership in logistics and operations, Fiege relog can offer its clients from the European Union and beyond the possibility of fulfilling their operational obligations without the need to transport waste equipment across borders. Additionally, besides fulfilling operational obligations on behalf of producers using the European return system (for example, collecting equipment from specific B2C/B2B points, transporting it to a processing site, utilizing and disposing of waste electrical and electronic equipment, specifically at the request of clients), Fiege relog also handles administrative matters.
The article comes from the magazine “Logistyka” 4/2010.