- Email: [email protected]
WASTE AND POLLUTION MANAGEMENT PRACTICES BY GERMAN COMPANIES
7th IFAC Conference on Management and 7th IFACofConference Management and Control Productionon and Logistics Available online at www.sciencedirect.com 7th IFACofConference on Management and Control Production and Logistics February 22-24, 2016. Bremen, Germany Control of Production and Logistics February 22-24, 2016. Bremen, Germany February 22-24, 2016. Bremen, Germany
ScienceDirect
IFAC-PapersOnLine 49-2 (2016) 102–107
WASTE WASTE AND AND POLLUTION POLLUTION MANAGEMENT MANAGEMENT PRACTICES PRACTICES WASTE AND POLLUTION BY GERMANMANAGEMENT COMPANIES PRACTICES BY GERMAN Jonathan Ullwer* Juliana K.COMPANIES Campos* Frank Straube* BY GERMAN COMPANIES Jonathan Ullwer* Juliana K. Campos* Frank Straube* Jonathan Ullwer* Juliana K. Campos* Frank Straube* * Technische Universiaet Berlin, Germany Universiaet Germany Tel: **49Technische 151 70110770; e-mail:Berlin, [email protected]. Universiaet Germany Tel: 49Technische 151 70110770; e-mail:Berlin, [email protected]. Tel: 49 151 70110770; e-mail: [email protected].
Abstract: This paper focuses on waste and pollution management (W&PM) practices within a group of Abstract: This paperfrom focuses on waste and pollution management practices within group of German companies various industries. A content analysis (W&PM) was conducted using an aaintegrated Abstract:companies This paperfrom focuses on waste and pollution management (W&PM) practices within group of German various industries. A content analysis was conducted using an integrated framework for managing sustainable supply chain practices as a background. To evaluate companies’ German companies from sustainable various industries. A content analysis was conducted using ancompanies’ integrated framework for managing supply chain practices as a background. To evaluate initiatives publicly available documents were used. The findings were organized into three topics: reuse frameworkpublicly for managing sustainable supply practices as awere background. evaluate companies’ initiatives available documents were chain used. The findings organizedTo into three topics: reuse and recycle, waste available disposal documents and pollution control and practices implemented (or not) by topics: each ofreuse the initiatives publicly were used. The findings were organized into three and recycle, waste disposal and pollution control and practices implemented (or not) by each of the researched companies presented inpollution details. The results show that sustainability practices are more related and recycle, waste disposal and control and practices implemented (or not) by each of the researched companies details. The results that sustainability practices are more related to companies` culture, presented values andin strategies rather than show to industry specific characteristics. researched companies presented in details. The results show that sustainability practices are more related to companies` culture, values and strategies rather than to industry specific characteristics. to companies` culture, valuesFederation and strategies rather than to industry specific characteristics. © 2016, IFAC (International of Automatic Control) Hosting by Elsevier Ltd. All rights reserved. Keywords: Reuse, Recycle, Remanufacture, Refurbish, Waste Management, Pollution, Supply Chain Keywords: Reuse, Recycle, Remanufacture, Refurbish, Waste Management, Pollution, Supply Chain Management, Sustainability, Germany Keywords: Reuse, Recycle, Germany Remanufacture, Refurbish, Waste Management, Pollution, Supply Chain Management, Sustainability, Management, Sustainability, Germany
1. INTRODUCTION AND BACKROUND 1. INTRODUCTION AND BACKROUND 1. INTRODUCTION AND BACKROUND Sustainable supply chain management can be defined as “the Sustainable supply chain management can be defined as strategic, transparent integration and achievement of“the an Sustainabletransparent supply chain management be defined as strategic, integration andcan achievement of“the an organization’s social, environmental, and economic strategic, transparent and achievement of an organization’s social,integration environmental, and economic objectives in the systemic coordination and of key interorganization’s social, environmental, economic objectives in business the systemic coordination of key organizational processes for improving the interlongobjectives in the systemic coordination of key interorganizational business processes forsupply improving the longterm performance of the firm and its chain partners” organizational business processes forsupply improving the longterm performance of the firm and its chain partners” (Ageron et al, 2012). Thisandintegration of social and term performance of the firm its supply chain partners” (Ageron et al, 2012). This integration of management social and environmental management within supply chain (Ageron et al, 2012). This integration of management social and environmental within supply chain is based on themanagement recognition that a single company can impact environmental management within supply chain management is basedand on the recognition that a own singlecorporate company can impact nature society beyond its boundaries is basedand on the recognition singlecorporate company can impact nature society beyondthat itsa own boundaries (McKinnon, 2012). Regulations the Wasteboundaries Electrical nature and society beyond its such ownas (McKinnon, 2012). Regulations such ascorporate the Waste Electrical and Electronic Equipment (WEEE) directive (McKinnon, 2012). Regulations such as the Waste (directive Electrical and Electronic Equipment (WEEE) directive (directive 2002/96/EC) playEquipment an important role directive in controlling the and Electronic (WEEE) (directive 2002/96/EC) play ofancompanies’ importantactions role on in environment controlling and the detrimental effects 2002/96/EC) play ofancompanies’ importantactions role on in environment controlling and the detrimental effects society (Govindan et al, 2015). However, this paper focusses detrimental effects of companies’ actions on environment and society (Govindaninitiatives et al, 2015). However, this paper focusses on voluntary which exceed governmental society (Govindaninitiatives et al, 2015). However, this paper focusses on voluntary which exceed governmental regulations. Specifically regarding W&PMgovernmental initiatives, on voluntary initiatives which exceed regulations. Specifically regarding W&PM Campos (2015) clustered them into three groups: initiatives, reuse and regulations. Specifically regarding W&PM Campos (2015) clustered them into three groups: initiatives, reuse and recycling, waste disposal and pollution control. The aimand of Campos into threecontrol. groups:The reuse recycling,(2015) waste clustered disposal them and pollution aim of this workwaste is disposal to analyze how companies stimulate recycling, and pollution control. The aim of this work is to analyze how companies stimulate sustainability in to theiranalyze supply chain. The arising stimulate research this work is how companies sustainability in their there supplyarechain. Theindustry-dependent arising research questions are whether striking sustainability in their there supplyarechain. Theindustry-dependent arising research questions are whether striking differences inwhether the respective company-internal W&PM questions are there are striking industry-dependent differences inwhat the factors respective company-internal W&PM policies, and could explain possibly different differences inwhat the factors respective company-internal W&PM policies, and could explain possibly different chosen approaches. policies, and what factors could explain possibly different chosen approaches. chosen approaches. 1.1 Reuse and recycling 1.1 Reuse and recycling 1.1 Reuse and recycling At first, companies should plan the reverse flow of goods, At first, companies should plan the reverse flow of goods, materials and waste should from the clients to flow the appropriate At first, companies the back reverse of goods, materials and waste from theplan clients back to the appropriate facility. There is also thethe possibility of using the forward materials and waste from clients back to the appropriate facility.chain Thereserving is alsothetheretail possibility oftake using therecycling forward supply sector to back facility.chain Thereserving is alsothetheretail possibility oftake using therecycling forward supply sector to back material or used products. Thissector couldto decrease the carbon supply chain serving the retail take back recycling material or usedwaste products. This could decrease the carbon footprint from management in urban regions. If the material usedwaste products. This could decrease the carbon footprint or from management in urban regions. If the recyclate across different supply chains would be pooled, footprint from management in urban regions. If the recyclate acrosswaste different supply chains would be pooled, recyclate across different supply chains would be pooled,
even higher environmental and economic benefits could be even higher environmental and economic benefits could be generated. still existing this should be even higherBut environmental and barriers economicto could be generated. But still existing barriers tobenefits this should be considered. On the one hand, there are additional legal generated. But still existing barriers to additional this shouldlegal be considered. On the one hand, there are requirements for the the one transport companies and on the other considered. On hand, there are additional legal requirements the fear transport companies and ifonthey the act other hand, retailersfor could a possible image loss as requirements for the fear transport companies and ifonthey the act other hand, retailers could a possible image loss as take-back station (McKinnon, 2015). hand, retailers could fear a possible take-back station (McKinnon, 2015). image loss if they act as take-back station (McKinnon, 2015). Secondly, there are differing understandings of the term Secondly, there are differing understandings of the term reuse. Arnette at al. reveal a narrow concept of reuse Secondly, there are(2014) differing understandings of the term reuse. Arnette at al. (2014) reveal a narrow concept of reuse as reutilisation ofal. a product as-is ora harvesting working parts reuse. Arnette at (2014) reveal narrow concept of reuse as reutilisation of a product as-is or harvesting working parts and component, theor harvesting form of working repairs parts and as reutilisation of a often productin and component, often inas-is the form of of reuse repairs and replacements. Furthermore the durability targeted and component, often inthe the form of of reuse repairs and replacements. Furthermore durability targeted components may be enhanced and the of recovery process replacements. Furthermore the durability reuse targeted components may enhanced and the and recovery process improved. This canbe reduce both economic environmental components may be enhanced and the and recovery process improved. This can reduce both economic environmental costs (Keoleian & Menerey, 1994). Otherand specific practices improved. This can reduce both economic environmental costs (Keoleian & Menerey, 1994). specific practices of reusing are remanufacturing andOther refurbishing, rated as costs (Keoleian & Menerey, 1994). specific practices of reusing are remanufacturing andOther refurbishing, rated as sustainably superior to recycling (Arnette et al., 2014). of reusing are remanufacturing refurbishing, as sustainably superior to recyclingand(Arnette et al.,rated 2014). Remanufacturing is thetoprocess of returning a used product to sustainably superior recycling (Arnette et al., 2014). Remanufacturing is the process of returning a used product to like-new conditionis with a warranty to matcha (Ijomah, 2002). Remanufacturing the process of returning used product to like-new condition with a warranty to match (Ijomah, 2002). Then, thecondition product iswith resold, often intoamatch different market. The like-new a warranty (Ijomah, 2002). Then, theofproduct is resold, often in a different The process remanufacturing includes sorting, market. inspection, Then, theofproduct is resold, often in a different market. The process remanufacturing includes sorting, inspection, disassembly, cleaning, reprocessing and reassembly, and process of remanufacturing includes sorting, inspection, disassembly, cleaning, reprocessing andoriginal reassembly, and parts which cannot be brought back to quality are disassembly, cleaning, reprocessing andoriginal reassembly, and parts which cannot be brought back to quality area replaced, meaning the final remanufactured product will be parts which cannotthe befinal brought back to original quality replaced, meaning remanufactured product will bearea combination of new reused parts (Hatcher et al, 2011). replaced, meaning theand final remanufactured product will be a combination of new and reused parts (Hatcher et al, 2011). While remanufacturing aims to restore the qualityetlevel of the combination of new and reused parts (Hatcher al, While remanufacturing aims to restore the quality level2011). of the product as new, refurbishment the quality While remanufacturing aims to strives restore to theimprove quality level of the product as new, refurbishment strives to improve the quality level. product as new, refurbishment strives to improve the quality level. level. Recycling is an important part of waste management and Recycling is an important ofmicro wastelevel. management and resource efficiency strategiespart at the It has several Recycling is an important part ofmicro wastelevel. management and resource efficiency strategies at the It has several benefits efficiency to promote recycling, such aslevel. greenhouse gas resource strategies at the micro It has several benefits toenergy promote recycling, such less as damage greenhouse gas reduction, and material saving, to health benefits promote recycling, such less as damage greenhouse gas reduction,toenergy and material saving, to health and job creation al, 2013). Complementary, reduction, energy (Menikpura and materialet less damage to health and job creation (Menikpura etsaving, al, 2013). Complementary, companies are recommended to al, design products with less and job creation (Menikpura et 2013). Complementary, companies are recommended to design products with less variety of are materials and employ recyclable ones. companies recommended to design products with Both less variety of materials and employ recyclable ones. Both measures lead to an increased percentage of recyclability, variety of materials and employ recyclable ones. Both measures lead to an increasedand percentage recyclability, higher recycling efficiency reduced of raw materials measures lead to an increasedand percentage recyclability, higher recycling efficiency reduced ofraw materials higher recycling efficiency and reduced raw materials
2405-8963 © 2016, IFAC (International Federation of Automatic Control) Hosting by Elsevier Ltd. All rights reserved. Copyright 2016 responsibility IFAC 102Control. Peer review©under of International Federation of Automatic Copyright © 2016 IFAC 102 10.1016/j.ifacol.2016.03.018 Copyright © 2016 IFAC 102
IFAC MCPL 2016 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
consumption (Huisman et al., 2003). International companies have been encouraged to improve their waste recycling practices by government policies based on the concept of Extended Producer Responsibility. This is a policy approach in which producers accept significant responsibility for the treatment or disposal of products (Walther & Spengler, 2005). In contrast to Organisation for Economic Cooperation and Development nations where recycling is part of a strategy to promote and enhance waste management, multiple economies of the Global South have not implemented recycling as a governmental policy in a holistic and integrated way. Instead, informal recycling prevails.
103
management and lean production resulting in improved operational performance through better utilization of inputs, reduced cycle times and overall lower costs (Golicic, Smith, 2013). 2. METHODOLOGY Firstly, in order to enhance a comparison of different sustainability approaches, different industry sectors were chosen: automotive and components (Audi, Continental, Porsche), chemical (Merck), Pharmaceutical (Bayer), retail (Metro) and materials (Linde). Secondly, companies had to be included in the Newsweek Green Ranking (NGR) 2012 or 2014. In order to survey the actual waste and pollution management of the selected cases, content analysis was applied, "a systematic, replicable technique for compressing many words of text into fewer content categories based on explicit rules of coding" (Stemler, 2001). An integrated framework for managing sustainable supply chain practices (Campos, 2015) was the research background. It contains seven groups of practices: supplier relationship, governance, procurement, production management, distribution, waste management (the focus of this paper) and customer relationship. The sources were publicly available documents, especially corporate responsibility reports and annual reports, similar to other recent studies (Tate et al., 2010).
1.2 Waste Disposal It stands to reason that it is more sustainable to reduce or rather avoid waste than to dispose of. Fiksel et al. (1997) show ways to design in order to reduce waste. If a company decreases its waste, it can reduce its cost and lower the raw materials consumption. Moreover, a change in waste management strategy will raise sustainability if (1) profit from the waste management is the same or greater than it is currently; (2) ecological health is the same or greater than it is currently; and (3) intra-generational social acceptance and intergenerational fairness are the same or greater than they are currently. Therefore in case of a landfilling, direct compensation of a community's full opportunity cost is demanded (Wagner, 2011). If waste disposal is necessary, correct form of disposal is often legally required. However, in some countries like Germany, responsibility for correct disposal is placed on the end user, even with EOL vehicles. This can constitute a thread to the automobile industry’s ability to meet sustainability requirements because abandoned vehicles are an existing problem in these countries. Therefore, other EU member states leave the responsibility for the disposal to the manufacturers forcing them to invest in effective design for disassembly (Kumar & Putnam, 2008).
3. FINDINGS AND DISCUSSIONS The findings of this research (table 1) shows the predominant focus of all companies on recycling practices. 3.1 Reuse and Recycling The researched German automobile industry seems to report very few information on their reverse logistic efforts. Indeed, the only initiative found is the practice by Continental to take-back used tires in many but implicitly not all European countries. However as this is legal requirement, it was already expected to be found. Similarly, Bayer and Merck do not appear to report on reverse logistics in Germany. What is more, just as the vehicle makers, Bayer does not seem to mention this topic in its reporting at all. It seems very improbable that these companies do not maintain a reverse supply chain in order to be able to recycle or reuse their products and material. Apart from that, Merck describes a project to raise awareness for the environment and handling of hazardous materials in South-East Asia establishing a Retrologistik® concept. But the report lacks detailed description of this waste management process. As a retail company, Metro obviously does not primarily produce but trades other enterprise’s products although they report practices of lengthening the product life cycle. The retailer implements a voluntary take-back program and cooperates with a recommerce provider which refurbishes used electrical goods. As an incentive to bring back used products, Metro offers shopping vouchers. Moreover, Metro’s firms Real and Media-Saturn are involved in the German retail industry’s voluntary take-back programs of old electrical goods since 2005. Customers can give back their old electrical and
1.3 Pollution Control Prevention is the first step in managing pollution. It focuses on reducing or eliminating waste before it is created (Hart, 1997). Aside from statutory requirements like the exemplary WEEE directive, a primary internal motivation behind this initiative is the top management’s desire for a certain corporate image with stakeholders. Therefore, enterprises do not want to become responsible for accidental or purposeful environmental damage. In order to limit this liability, pollution reduction mechanisms and the correlating sustainable responsibility have to be implemented not only by the companies, but also by their supply chain partners (Ageron et al., 2012). Certainly, strategies of prevention are dependent of continuous improvement efforts in order to minimize waste and energy use. But managers who implement pollution prevention can also follow an economic logic because it could be shown that pollution prevention saves costs (Hart, 1997). This does not come by surprise as pollution prevention conforms concepts like total quality 103
IFAC MCPL 2016 104 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
electronic appliances free of charge. Although on the presumably profit driven condition that they buy a new one. Subsequently, Metro introduces these appliances directly into the recycling process instead of disposing them of at municipal collection points.
specified and open to interpretation, it is not mentioned in the report, how this packing material is reused afterwards. Audi promotes a research project which aims to find new concepts and techniques for reusing carbon-fiber reinforced composites. They are planning to develop a recovery process at the same time. Continental in the other hand does not seem to mention reuse of tires, although some applications can be seen in the market. Contrary to Continental, Porsche promotes the reuse of its products. It claims that two thirds of all its cars ever built remain functional and are driven up until this point. This is not only environmentally sustainable. As Porsche’s costumers can trust in the longevity and value durability of the cars, Porsche can push through higher prices enhancing the company’s performance and economic sustainability. Additionally, Porsche aims to promote the use of reusable containers pressed ahead by annually set green logistic targets. At Merck’s sites, scrap metal is returned to the material cycle from German plants: all combustible ingredients are destroyed; the heat released is harnessed to generate energy. Metro’s initiative to collect and reselling used electronic products enables the reuse of consumer goods.
Chemicals & Pharma
Retail
Materials
Items
Audi
Continental
Porsche
Bayer
Merck
Metro
Linde
Table 1 Summary of the results
Take back, statutory Take back, voluntary
-
-
-
-
-
-
-
-
-
-
-
Closed loop
-
-
-
-
-
Reuse materials Reuse containers / packaging Reuse plants, tools Reconditioning Remanufacture Refurbishment Upcycling Downcycling Recycling of own products Use of recyclate Correct disposal
-
-
-
-
-
-
- - -
-
Reduce waste
-
-
-
Prevent Reduce
-
-
-
Manage
-
-
-
Reforestation CO2-neutral production
-
-
-
-
-
-
-
-
-
-
-
Automobiles
Industry sector
Subgroup
Framework categories
Subsubgroups
Reuse and Recycle
Recovery end of life products / Reverse Logistics Reuse Remanufacture & Refurbish
Pollution Control
Disposal
Recycling
Waste disposal Prevent, Reduce and Manage Pollution Compensating programs
-
Only two of seven researched companies seem to report eventual remanufacturing and refurbishment practices. Materials, chemical and pharma products seem not be suitable for those practices. Still, Continental and Porsche both producing high residual value goods could promote these first-class recovery methods in their reports. Audi reconditions and subsequently reuses components from cars put out of service in order to save steel, copper and aluminum. The extraction and production of these metals (especially of the latter) is highly unsustainable because of high energy intensity (Huisman et al., 2003; Menikpura et al., 2013). Therefore, this Audi initiative can lower the production’s negative environmental impact, even though the extend of this initiative remains unclear because the car maker only seems to publish the absolute amount of saved metal and not the more meaningful relative savings. In Metro’s case, it is open to speculation if their reverse logistics initiative in cooperation with a reseller is also a refurbishment initiative. While the retail group reports that used electronic products are collected and tested, it is an open question if repairable products are then refurbished. Could be, as this recovery seems economically and ecologically sustainable.
- - - - - - - - - - - - - - - - - - - - - - - - - - -
-
McKinnon (2015) indicated that take-back programs like these can decrease the carbon footprint of waste management in urban regions, but the question remains, why Metro only takes-back combined with the condition that the persons bringing their old electronic and electrical appliances become Metro’s costumers. As a retailer, it has to take back batteries even if the consumer does not buy anything and could do the same with electronic waste. This shows that Metro’s ability to act in a sustainable manner before regulations can lead to a higher performance.
As mentioned before, all seven companies report recycling practices. However, some questions still remain unanswered: Is the company reporting initiatives of making its products recyclable or is the initiative about using recyclate as own input? Second, the quality of recycling: Is the product downcycled or up-cycled (Desai & Mital, 2003)? The vehicle makers Audi and Porsche have to comply with the same statutory recyclability quota of 85 percent of their vehicles for 2015. Moreover, it seems remarkable that Audi managed to accomplish this statutory requirement so early. Arguing for Karnani (2011), this recycling law might be inefficient in enforcing CSR because Audi’s profits and public welfare anyhow seem to be aligned. Either way, both producers implement initiatives to make recycling of their
Unlike the companies discussed until now, Linde combines forward and reverse logistics, thus avoiding waste and pollution. The company utilizes gas cylinders that depending on its content and application they are reused on average four times a year. Whereas Linde reports that the cylinders have a lifespan of “many years” (Linde AG, 2014b) which is not 104
IFAC MCPL 2016 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
cars feasible. Audi participates in a battery recycling research project. As the literature indicates and against public opinion, this recycling of lithium ion batteries for electric vehicles is practicable and efficient (Schwarzer, 2015). Audi emphasizes that goal of the research is to develop environmentally sound processes, so it shows that it keeps in mind that recycling is not per se sustainable. Similarly, a Bayer subsidiary already uses a certain recycling method to recycle 1,500 tons of batteries a year (29% of rate). However, reviewed literature demands that companies should not only research processes of battery recycling because there are already working recycling plants in Europe. By contrast, an infrastructure for lithium ion batteries in Germany is still missing; journalists criticize (Schwarzer, 2015). Audi initiated two vehicle material recycling projects that are dealing with aluminum. These initiatives have the potential to not only make the vehicle production more environmentally sustainable, but also create jobs with a new recycling industry, hence enhancing the social sustainability. Noticeably, both vehicle makers appear to lack information on possible use of recyclate in their vehicles. This is in contrast to the representatives of all other researched producing companies. Porsche starts the recycling process already in the design phase, by labelling plastic components and planning the disassembling of its vehicles. Notwithstanding the relatively high amount of diverse recycling initiatives, Linde’s subsidiary Afrox sets the only found example of an upcycling project. Perhaps the recent research on cost effective and feasible up-cycling of CRFP can lead the industry to new processes in this field. Nilakantan and Nutt (2015) show that not only small scale and like in Linde’s case side business initiatives are possible. The company has a recycling rate of 56%. Continental stresses that it does not export waste, and in the context of informal recycling and the possible damage to people and the environment mentioned by Halabi et al. (2013), this should be the basis of a waste management. In contrast to the demand of Huisman et al. (2003), no company seems to minimize the material variety of their products in order to increase the recyclability.
105
reduce waste for disposal in one of its plants by 30 percent. Maybe Linde’s worldwide recording project for gas cylinders can lead to less hazardous waste disposal or at least correct treatment because Linde reports that these containers require special means of disposal. Unlike the other companies, Porsche reports that it follows an own waste management concept which it understands as an enabler for improvement in environmental sustainability. Noticeably, the vehicle maker engages its suppliers in avoiding waste. 3.3 Pollution Control Just like in waste management, preventing pollution is sustainably superior to reducing or managing it (Hart, 1997). Against this background, it strikes that only Metro mentions an initiative of complete pollution prevention. Though it may be questioned if its target to phase out F-gases until 2025 is actually ambitious. With the exception of Continental, all researched companies implement a pollution management system. Only Audi, Porsche and Linde seem to explicitly take manage their plant’s noise pollution. The indirect stakeholders are thus considered, so the companies become more socially sustainable (Heinrichs, 2014). Only two companies mention voluntary pollution compensation programs in their reports. Both Audi and Linde report to participate or have initiated international reforestation projects. In order to be truly sustainable, the projects should include the care for the trees. The companies indeed mention a future perspective for the initiative. While Audi says its project is designed to run several generations, Linde only indicates that it spent a certain amount on planting and maintenance in the reporting year. However, neither of the companies can estimate the amount of GHG that are compensated or saved because of their projects. On the other hand, the relating concepts to measure the sustainability impact of such initiatives have their limits (Pagell & Shevchenko, 2014). 4. CONCLUSIONS The paper aims to analyze the initiatives for sustainable waste and pollution management that have been implemented by the seven selected German companies. The question whether there are striking industry dependent differences in the respective company waste and pollution management practices cannot be answered in general. Refurbishment and remanufacturing do not seem to fit to the chemical, pharmaceutical, materials industry, and are well implemented in the automobile and retail sector. Although the literature indicates that this kind of practice is sustainably superior to recycling, it may lead a miserable existence in all the companies’ reports. Is it because the image of refurbishment suffers from its unclear definition and a connected shoddy image?
3.2 Waste Disposal As the literature suggests, the best waste disposal is the prevented one (Fiksel & Hill, 1997). However, only four of seven companies report of waste reducing initiatives. Complementary, all automobile companies Porsche, Audi and Continental, plus Bayer and Linde state that their waste is disposed correctly which should be the minimum requirement towards the sustainability. Of course, this does not implicate that the remaining companies use illegal disposal methods. In Merck’s case, the company outsourced the waste disposal nearly completely. In order to make sure that the contractors dispose correctly, it can audit and approve them, as Porsche does. Metro’s report seems to lack information on its waste disposal initiatives besides the comment that the retailer substantially reduced its disposal rate in Eastern Europe. Unfortunately, Metro leaves it open how it accomplished this. Similarly, Linde states the will to achieve further reductions of hazardous waste reduction, without telling a specific initiative. In contrast, Bayer explains why it was able to
In contrast to this, recycling initiatives are highly represented in the reports which might reveal the companies’ priorities in the corporate sustainability strategies. However, using recyclate seems to be a non-issue for the selected vehicle makers. This could change with image carrier models that promote recyclate interiors as green life-style insignia. 105
IFAC MCPL 2016 106 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
Evidently, up-cycling appears to challenge producers more than common recycling. Only one company mentions a related initiative which besides is a small project. For the chemical and pharmaceutical industry with their strict recycling regulations this seems to be out of reach, although the automobile and retail industry could do more. Similarly, although almost all companies have pollution management programs, the prevention aspect was found in only one of them. Voluntary compensation programs, a relatively new research field and object of opposing forces, still seem to be uncharted territory for most companies. Another interesting but not surprising conclusion is that companies’ actions are focused on environmental sustainability and few actions regarding social sustainability were found.
Desai,
A.,
&
Mital,
A.
(2003).
Evaluation
of
disassemblability to enable design for disassembly in mass production. International Journal of Industrial Ergonomics, 32(4), 265–281. European Commission. (2011a). White Paper: Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system.
Brussels,
Belgium. European Commission (2011b). A renewed EU strategy 2011-14 for CSR Brussels, Belgium.
Due to the small sample ad research method chosen, conclusions cannot be generalized, but some relevant questions could be addressed. The discussion has shown that companies seem to avoid stronger commitments. That is partly because once published, a sustainability initiative or statement can hardly be withdrawn without image costs. Additionally, very rarely the financial and strategic benefit of a reported sustainable initiative is appealed by the company. Complementary, different definitions of some terms, e.g. reuse, open a wide scope of interpretation by companies. They tend to use wider interpretations of sustainability concepts for the purpose of marketing, thus losing a potential pioneering role in implementing an effective sustainable supply chain management. Further research in form of expert interviews with mid-level managers and stakeholders could be useful in order to clarify some doubts and enrich the results. Moreover, the sample size could be enlarged by considering companies on an international level. This could conceivably reveal other impact factors on the companies’ policies of W&PM.
Fiksel, J., & Hill, M. (1997). Design for Environment: Creating Eco-Efficient Products and Processes. Journal of Product Innovation Management, 14(1), 69–70. Golicic, S. L., & Smith, C. D. (2013). A Meta-Analysis of Environmentally Sustainable Supply Chain Management Practices and Firm Performance. Journal of Supply Chain Management, 49(2), 78–95. Govindan, K., Soleimani, H., & Kannan, D. (2015). Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future. European Journal of Operational Research, 240(3), 603–626. Halabi, A. X., Torres, J. R. M., Pirachicán, D. C., & Mejía, D. (2013). A modelling framework of reverse logistics
Acknowledgments
practices in the Colombian plastic sector. International
The authors would like to thank CNPQ for financing Juliana K. Campos during her stay in Germany.
Journal of Industrial and Systems Engineering, 13(3), 364. Hart, S. L. (1997). Beyond Greening: Strategies for a
5. REFERENCES
Sustainable World. Harvard Business Review: Vol. 11.
Ageron, B., Gunasekaran, A., & Spalanzani, A. (2012).
Hatcher, G. D., Ijomah, W. L., & Windmill, J. (2011). Design
Sustainable supply management: An empirical study.
for remanufacture: A literature review and future research
International Journal of Production Economics, 140(1),
needs. Journal of Cleaner Production, 19(17-18), 2004–
168–182.
2014.
Arnette, A. N., Brewer, B. L., & Choal, T. (2014). Design for
Heinrichs, H. (2014). Nachhaltigkeitswissenschaften. Berlin:
sustainability (DFS): The intersection of supply chain and
Springer Spektrum.
environment. Journal of Cleaner Production, 83, 374–
Huisman, J., Boks, C. B., & Stevels, A. L. N. (2003). Quotes
390.
for environmentally weighted recyclability: Concept of
Campos, J. K. (2015). Integrated framework for managing
describing product recyclability in terms of environmental
sustainable supply chain practices. Schriftenr ed. Berlin.
value. International Journal of Production Research,
Berlin: Univ.-Verl. der TU Berlin, Berlin, Germany.
41(16), 3649–3665. 106
IFAC MCPL 2016 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
107
Ijomah, W. L. (2002). A Model Based Definition of the
Rogers, D. S., & Tibben-Lembke, R. S. (1999). Going
Generic Remanufacturing Business Process: University
backwards: Reverse logistics trends and practices. Reno:
of Plymouth.
University of Nevada, Reno, Center for Logistics Management.
Karnani, A. (2011). CSR Stuck in a Logical Trap: A
Schwarzer, C. M. (2015). Die Maer vom Sondermuell auf
Response to Pietra Rivoli and Sandra Waddock's “‘First
Raedern.
They Ignore You…’: The Time-Context Dynamic and Corporate
Responsibility”.
California
Management
Retrieved
from
http://www.zeit.de/mobilitaet/2015-08/elektromobilitaet-
Review, 53(2), 105–111.
batterie-recycling
Keoleian, G. A., & Menerey, D. (1994). Sustainable
Tate, W. L., Ellram, L. M., & Kirchoff, J. F. (2010).
Development by Design: Review of Life Cycle Design
Corporate social responsibility reports: A thematic
and Related Approaches. Air & Waste, 44(5), 645–668.
analysis related to supply chain management. Journal of Supply Chain Management, 46(1), 19–44.
Kumar, S., & Putnam, V. (2008). Cradle to cradle: Reverse logistics strategies and opportunities across three industry
Thierry, M., Salomon, M., van Nunen, J., & van
sectors. International Journal of Production Economics,
Wassenhove, L. (1995). Strategie Issues in Product
115(2), 305–315.
Recovery Management. California Management Review, 37(2), 114–135.
McKinnon, A. C. (Ed.). (2012). Green logistics: Improving the environmental sustainability of logistics (2. ed.).
Wagner,
J.
(2011).
Incentivizing
sustainable
waste
management. Ecological Economics, 70(4), 585–594.
London: Kogan Page. McKinnon, A. C. (Ed.). (2015). Green logistics: Improving
Waite, M. (2013). SURF Framework for a Sustainable
the environmental sustainability of logistics (3. ed.).
Economy. Journal of Management and Sustainability,
London: Kogan Page.
3(4). Walther,
Menikpura, S. N. M., Gheewala, S. H., Bonnet, S., &
G.,
&
Spengler,
T.
(2005).
Impact
of
Chiemchaisri, C. (2013). Evaluation of the Effect of
WEEE‐directive on reverse logistics in Germany.
Recycling on Sustainability of Municipal Solid Waste
International
Management
in
Thailand.
Waste
and
Biomass
Journal
of
Physical
Logistics Management, 35(5), 337–361.
Valorization, 4(2), 237–257. Messelbeck, J., & Whaley, M. (1999). Greening the health care supply chain: triggers of change, models for success. Corporate Environmental Strategy, 6(1), 39–45 Nilakantan, G., & Nutt, S. (2015). Reuse and upcycling of aerospace prepreg scrap and waste. Reinforced Plastics, 59(1), 44–51. Pagell, M., & Shevchenko, A. (2014). Why Research in Sustainable Supply Chain Management Should Have no Future. Journal of Supply Chain Management, 50(1), 44– 55. Porter, M. E., & van der Linde, C. (1995). Green and Competitive: Ending the Stalemate. Harvard Business Review, 73(5), 120–134. 107
Distribution
&
ScienceDirect
IFAC-PapersOnLine 49-2 (2016) 102–107
WASTE WASTE AND AND POLLUTION POLLUTION MANAGEMENT MANAGEMENT PRACTICES PRACTICES WASTE AND POLLUTION BY GERMANMANAGEMENT COMPANIES PRACTICES BY GERMAN Jonathan Ullwer* Juliana K.COMPANIES Campos* Frank Straube* BY GERMAN COMPANIES Jonathan Ullwer* Juliana K. Campos* Frank Straube* Jonathan Ullwer* Juliana K. Campos* Frank Straube* * Technische Universiaet Berlin, Germany Universiaet Germany Tel: **49Technische 151 70110770; e-mail:Berlin, [email protected]. Universiaet Germany Tel: 49Technische 151 70110770; e-mail:Berlin, [email protected]. Tel: 49 151 70110770; e-mail: [email protected].
Abstract: This paper focuses on waste and pollution management (W&PM) practices within a group of Abstract: This paperfrom focuses on waste and pollution management practices within group of German companies various industries. A content analysis (W&PM) was conducted using an aaintegrated Abstract:companies This paperfrom focuses on waste and pollution management (W&PM) practices within group of German various industries. A content analysis was conducted using an integrated framework for managing sustainable supply chain practices as a background. To evaluate companies’ German companies from sustainable various industries. A content analysis was conducted using ancompanies’ integrated framework for managing supply chain practices as a background. To evaluate initiatives publicly available documents were used. The findings were organized into three topics: reuse frameworkpublicly for managing sustainable supply practices as awere background. evaluate companies’ initiatives available documents were chain used. The findings organizedTo into three topics: reuse and recycle, waste available disposal documents and pollution control and practices implemented (or not) by topics: each ofreuse the initiatives publicly were used. The findings were organized into three and recycle, waste disposal and pollution control and practices implemented (or not) by each of the researched companies presented inpollution details. The results show that sustainability practices are more related and recycle, waste disposal and control and practices implemented (or not) by each of the researched companies details. The results that sustainability practices are more related to companies` culture, presented values andin strategies rather than show to industry specific characteristics. researched companies presented in details. The results show that sustainability practices are more related to companies` culture, values and strategies rather than to industry specific characteristics. to companies` culture, valuesFederation and strategies rather than to industry specific characteristics. © 2016, IFAC (International of Automatic Control) Hosting by Elsevier Ltd. All rights reserved. Keywords: Reuse, Recycle, Remanufacture, Refurbish, Waste Management, Pollution, Supply Chain Keywords: Reuse, Recycle, Remanufacture, Refurbish, Waste Management, Pollution, Supply Chain Management, Sustainability, Germany Keywords: Reuse, Recycle, Germany Remanufacture, Refurbish, Waste Management, Pollution, Supply Chain Management, Sustainability, Management, Sustainability, Germany
1. INTRODUCTION AND BACKROUND 1. INTRODUCTION AND BACKROUND 1. INTRODUCTION AND BACKROUND Sustainable supply chain management can be defined as “the Sustainable supply chain management can be defined as strategic, transparent integration and achievement of“the an Sustainabletransparent supply chain management be defined as strategic, integration andcan achievement of“the an organization’s social, environmental, and economic strategic, transparent and achievement of an organization’s social,integration environmental, and economic objectives in the systemic coordination and of key interorganization’s social, environmental, economic objectives in business the systemic coordination of key organizational processes for improving the interlongobjectives in the systemic coordination of key interorganizational business processes forsupply improving the longterm performance of the firm and its chain partners” organizational business processes forsupply improving the longterm performance of the firm and its chain partners” (Ageron et al, 2012). Thisandintegration of social and term performance of the firm its supply chain partners” (Ageron et al, 2012). This integration of management social and environmental management within supply chain (Ageron et al, 2012). This integration of management social and environmental within supply chain is based on themanagement recognition that a single company can impact environmental management within supply chain management is basedand on the recognition that a own singlecorporate company can impact nature society beyond its boundaries is basedand on the recognition singlecorporate company can impact nature society beyondthat itsa own boundaries (McKinnon, 2012). Regulations the Wasteboundaries Electrical nature and society beyond its such ownas (McKinnon, 2012). Regulations such ascorporate the Waste Electrical and Electronic Equipment (WEEE) directive (McKinnon, 2012). Regulations such as the Waste (directive Electrical and Electronic Equipment (WEEE) directive (directive 2002/96/EC) playEquipment an important role directive in controlling the and Electronic (WEEE) (directive 2002/96/EC) play ofancompanies’ importantactions role on in environment controlling and the detrimental effects 2002/96/EC) play ofancompanies’ importantactions role on in environment controlling and the detrimental effects society (Govindan et al, 2015). However, this paper focusses detrimental effects of companies’ actions on environment and society (Govindaninitiatives et al, 2015). However, this paper focusses on voluntary which exceed governmental society (Govindaninitiatives et al, 2015). However, this paper focusses on voluntary which exceed governmental regulations. Specifically regarding W&PMgovernmental initiatives, on voluntary initiatives which exceed regulations. Specifically regarding W&PM Campos (2015) clustered them into three groups: initiatives, reuse and regulations. Specifically regarding W&PM Campos (2015) clustered them into three groups: initiatives, reuse and recycling, waste disposal and pollution control. The aimand of Campos into threecontrol. groups:The reuse recycling,(2015) waste clustered disposal them and pollution aim of this workwaste is disposal to analyze how companies stimulate recycling, and pollution control. The aim of this work is to analyze how companies stimulate sustainability in to theiranalyze supply chain. The arising stimulate research this work is how companies sustainability in their there supplyarechain. Theindustry-dependent arising research questions are whether striking sustainability in their there supplyarechain. Theindustry-dependent arising research questions are whether striking differences inwhether the respective company-internal W&PM questions are there are striking industry-dependent differences inwhat the factors respective company-internal W&PM policies, and could explain possibly different differences inwhat the factors respective company-internal W&PM policies, and could explain possibly different chosen approaches. policies, and what factors could explain possibly different chosen approaches. chosen approaches. 1.1 Reuse and recycling 1.1 Reuse and recycling 1.1 Reuse and recycling At first, companies should plan the reverse flow of goods, At first, companies should plan the reverse flow of goods, materials and waste should from the clients to flow the appropriate At first, companies the back reverse of goods, materials and waste from theplan clients back to the appropriate facility. There is also thethe possibility of using the forward materials and waste from clients back to the appropriate facility.chain Thereserving is alsothetheretail possibility oftake using therecycling forward supply sector to back facility.chain Thereserving is alsothetheretail possibility oftake using therecycling forward supply sector to back material or used products. Thissector couldto decrease the carbon supply chain serving the retail take back recycling material or usedwaste products. This could decrease the carbon footprint from management in urban regions. If the material usedwaste products. This could decrease the carbon footprint or from management in urban regions. If the recyclate across different supply chains would be pooled, footprint from management in urban regions. If the recyclate acrosswaste different supply chains would be pooled, recyclate across different supply chains would be pooled,
even higher environmental and economic benefits could be even higher environmental and economic benefits could be generated. still existing this should be even higherBut environmental and barriers economicto could be generated. But still existing barriers tobenefits this should be considered. On the one hand, there are additional legal generated. But still existing barriers to additional this shouldlegal be considered. On the one hand, there are requirements for the the one transport companies and on the other considered. On hand, there are additional legal requirements the fear transport companies and ifonthey the act other hand, retailersfor could a possible image loss as requirements for the fear transport companies and ifonthey the act other hand, retailers could a possible image loss as take-back station (McKinnon, 2015). hand, retailers could fear a possible take-back station (McKinnon, 2015). image loss if they act as take-back station (McKinnon, 2015). Secondly, there are differing understandings of the term Secondly, there are differing understandings of the term reuse. Arnette at al. reveal a narrow concept of reuse Secondly, there are(2014) differing understandings of the term reuse. Arnette at al. (2014) reveal a narrow concept of reuse as reutilisation ofal. a product as-is ora harvesting working parts reuse. Arnette at (2014) reveal narrow concept of reuse as reutilisation of a product as-is or harvesting working parts and component, theor harvesting form of working repairs parts and as reutilisation of a often productin and component, often inas-is the form of of reuse repairs and replacements. Furthermore the durability targeted and component, often inthe the form of of reuse repairs and replacements. Furthermore durability targeted components may be enhanced and the of recovery process replacements. Furthermore the durability reuse targeted components may enhanced and the and recovery process improved. This canbe reduce both economic environmental components may be enhanced and the and recovery process improved. This can reduce both economic environmental costs (Keoleian & Menerey, 1994). Otherand specific practices improved. This can reduce both economic environmental costs (Keoleian & Menerey, 1994). specific practices of reusing are remanufacturing andOther refurbishing, rated as costs (Keoleian & Menerey, 1994). specific practices of reusing are remanufacturing andOther refurbishing, rated as sustainably superior to recycling (Arnette et al., 2014). of reusing are remanufacturing refurbishing, as sustainably superior to recyclingand(Arnette et al.,rated 2014). Remanufacturing is thetoprocess of returning a used product to sustainably superior recycling (Arnette et al., 2014). Remanufacturing is the process of returning a used product to like-new conditionis with a warranty to matcha (Ijomah, 2002). Remanufacturing the process of returning used product to like-new condition with a warranty to match (Ijomah, 2002). Then, thecondition product iswith resold, often intoamatch different market. The like-new a warranty (Ijomah, 2002). Then, theofproduct is resold, often in a different The process remanufacturing includes sorting, market. inspection, Then, theofproduct is resold, often in a different market. The process remanufacturing includes sorting, inspection, disassembly, cleaning, reprocessing and reassembly, and process of remanufacturing includes sorting, inspection, disassembly, cleaning, reprocessing andoriginal reassembly, and parts which cannot be brought back to quality are disassembly, cleaning, reprocessing andoriginal reassembly, and parts which cannot be brought back to quality area replaced, meaning the final remanufactured product will be parts which cannotthe befinal brought back to original quality replaced, meaning remanufactured product will bearea combination of new reused parts (Hatcher et al, 2011). replaced, meaning theand final remanufactured product will be a combination of new and reused parts (Hatcher et al, 2011). While remanufacturing aims to restore the qualityetlevel of the combination of new and reused parts (Hatcher al, While remanufacturing aims to restore the quality level2011). of the product as new, refurbishment the quality While remanufacturing aims to strives restore to theimprove quality level of the product as new, refurbishment strives to improve the quality level. product as new, refurbishment strives to improve the quality level. level. Recycling is an important part of waste management and Recycling is an important ofmicro wastelevel. management and resource efficiency strategiespart at the It has several Recycling is an important part ofmicro wastelevel. management and resource efficiency strategies at the It has several benefits efficiency to promote recycling, such aslevel. greenhouse gas resource strategies at the micro It has several benefits toenergy promote recycling, such less as damage greenhouse gas reduction, and material saving, to health benefits promote recycling, such less as damage greenhouse gas reduction,toenergy and material saving, to health and job creation al, 2013). Complementary, reduction, energy (Menikpura and materialet less damage to health and job creation (Menikpura etsaving, al, 2013). Complementary, companies are recommended to al, design products with less and job creation (Menikpura et 2013). Complementary, companies are recommended to design products with less variety of are materials and employ recyclable ones. companies recommended to design products with Both less variety of materials and employ recyclable ones. Both measures lead to an increased percentage of recyclability, variety of materials and employ recyclable ones. Both measures lead to an increasedand percentage recyclability, higher recycling efficiency reduced of raw materials measures lead to an increasedand percentage recyclability, higher recycling efficiency reduced ofraw materials higher recycling efficiency and reduced raw materials
2405-8963 © 2016, IFAC (International Federation of Automatic Control) Hosting by Elsevier Ltd. All rights reserved. Copyright 2016 responsibility IFAC 102Control. Peer review©under of International Federation of Automatic Copyright © 2016 IFAC 102 10.1016/j.ifacol.2016.03.018 Copyright © 2016 IFAC 102
IFAC MCPL 2016 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
consumption (Huisman et al., 2003). International companies have been encouraged to improve their waste recycling practices by government policies based on the concept of Extended Producer Responsibility. This is a policy approach in which producers accept significant responsibility for the treatment or disposal of products (Walther & Spengler, 2005). In contrast to Organisation for Economic Cooperation and Development nations where recycling is part of a strategy to promote and enhance waste management, multiple economies of the Global South have not implemented recycling as a governmental policy in a holistic and integrated way. Instead, informal recycling prevails.
103
management and lean production resulting in improved operational performance through better utilization of inputs, reduced cycle times and overall lower costs (Golicic, Smith, 2013). 2. METHODOLOGY Firstly, in order to enhance a comparison of different sustainability approaches, different industry sectors were chosen: automotive and components (Audi, Continental, Porsche), chemical (Merck), Pharmaceutical (Bayer), retail (Metro) and materials (Linde). Secondly, companies had to be included in the Newsweek Green Ranking (NGR) 2012 or 2014. In order to survey the actual waste and pollution management of the selected cases, content analysis was applied, "a systematic, replicable technique for compressing many words of text into fewer content categories based on explicit rules of coding" (Stemler, 2001). An integrated framework for managing sustainable supply chain practices (Campos, 2015) was the research background. It contains seven groups of practices: supplier relationship, governance, procurement, production management, distribution, waste management (the focus of this paper) and customer relationship. The sources were publicly available documents, especially corporate responsibility reports and annual reports, similar to other recent studies (Tate et al., 2010).
1.2 Waste Disposal It stands to reason that it is more sustainable to reduce or rather avoid waste than to dispose of. Fiksel et al. (1997) show ways to design in order to reduce waste. If a company decreases its waste, it can reduce its cost and lower the raw materials consumption. Moreover, a change in waste management strategy will raise sustainability if (1) profit from the waste management is the same or greater than it is currently; (2) ecological health is the same or greater than it is currently; and (3) intra-generational social acceptance and intergenerational fairness are the same or greater than they are currently. Therefore in case of a landfilling, direct compensation of a community's full opportunity cost is demanded (Wagner, 2011). If waste disposal is necessary, correct form of disposal is often legally required. However, in some countries like Germany, responsibility for correct disposal is placed on the end user, even with EOL vehicles. This can constitute a thread to the automobile industry’s ability to meet sustainability requirements because abandoned vehicles are an existing problem in these countries. Therefore, other EU member states leave the responsibility for the disposal to the manufacturers forcing them to invest in effective design for disassembly (Kumar & Putnam, 2008).
3. FINDINGS AND DISCUSSIONS The findings of this research (table 1) shows the predominant focus of all companies on recycling practices. 3.1 Reuse and Recycling The researched German automobile industry seems to report very few information on their reverse logistic efforts. Indeed, the only initiative found is the practice by Continental to take-back used tires in many but implicitly not all European countries. However as this is legal requirement, it was already expected to be found. Similarly, Bayer and Merck do not appear to report on reverse logistics in Germany. What is more, just as the vehicle makers, Bayer does not seem to mention this topic in its reporting at all. It seems very improbable that these companies do not maintain a reverse supply chain in order to be able to recycle or reuse their products and material. Apart from that, Merck describes a project to raise awareness for the environment and handling of hazardous materials in South-East Asia establishing a Retrologistik® concept. But the report lacks detailed description of this waste management process. As a retail company, Metro obviously does not primarily produce but trades other enterprise’s products although they report practices of lengthening the product life cycle. The retailer implements a voluntary take-back program and cooperates with a recommerce provider which refurbishes used electrical goods. As an incentive to bring back used products, Metro offers shopping vouchers. Moreover, Metro’s firms Real and Media-Saturn are involved in the German retail industry’s voluntary take-back programs of old electrical goods since 2005. Customers can give back their old electrical and
1.3 Pollution Control Prevention is the first step in managing pollution. It focuses on reducing or eliminating waste before it is created (Hart, 1997). Aside from statutory requirements like the exemplary WEEE directive, a primary internal motivation behind this initiative is the top management’s desire for a certain corporate image with stakeholders. Therefore, enterprises do not want to become responsible for accidental or purposeful environmental damage. In order to limit this liability, pollution reduction mechanisms and the correlating sustainable responsibility have to be implemented not only by the companies, but also by their supply chain partners (Ageron et al., 2012). Certainly, strategies of prevention are dependent of continuous improvement efforts in order to minimize waste and energy use. But managers who implement pollution prevention can also follow an economic logic because it could be shown that pollution prevention saves costs (Hart, 1997). This does not come by surprise as pollution prevention conforms concepts like total quality 103
IFAC MCPL 2016 104 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
electronic appliances free of charge. Although on the presumably profit driven condition that they buy a new one. Subsequently, Metro introduces these appliances directly into the recycling process instead of disposing them of at municipal collection points.
specified and open to interpretation, it is not mentioned in the report, how this packing material is reused afterwards. Audi promotes a research project which aims to find new concepts and techniques for reusing carbon-fiber reinforced composites. They are planning to develop a recovery process at the same time. Continental in the other hand does not seem to mention reuse of tires, although some applications can be seen in the market. Contrary to Continental, Porsche promotes the reuse of its products. It claims that two thirds of all its cars ever built remain functional and are driven up until this point. This is not only environmentally sustainable. As Porsche’s costumers can trust in the longevity and value durability of the cars, Porsche can push through higher prices enhancing the company’s performance and economic sustainability. Additionally, Porsche aims to promote the use of reusable containers pressed ahead by annually set green logistic targets. At Merck’s sites, scrap metal is returned to the material cycle from German plants: all combustible ingredients are destroyed; the heat released is harnessed to generate energy. Metro’s initiative to collect and reselling used electronic products enables the reuse of consumer goods.
Chemicals & Pharma
Retail
Materials
Items
Audi
Continental
Porsche
Bayer
Merck
Metro
Linde
Table 1 Summary of the results
Take back, statutory Take back, voluntary
-
-
-
-
-
-
-
-
-
-
-
Closed loop
-
-
-
-
-
Reuse materials Reuse containers / packaging Reuse plants, tools Reconditioning Remanufacture Refurbishment Upcycling Downcycling Recycling of own products Use of recyclate Correct disposal
-
-
-
-
-
-
- - -
-
Reduce waste
-
-
-
Prevent Reduce
-
-
-
Manage
-
-
-
Reforestation CO2-neutral production
-
-
-
-
-
-
-
-
-
-
-
Automobiles
Industry sector
Subgroup
Framework categories
Subsubgroups
Reuse and Recycle
Recovery end of life products / Reverse Logistics Reuse Remanufacture & Refurbish
Pollution Control
Disposal
Recycling
Waste disposal Prevent, Reduce and Manage Pollution Compensating programs
-
Only two of seven researched companies seem to report eventual remanufacturing and refurbishment practices. Materials, chemical and pharma products seem not be suitable for those practices. Still, Continental and Porsche both producing high residual value goods could promote these first-class recovery methods in their reports. Audi reconditions and subsequently reuses components from cars put out of service in order to save steel, copper and aluminum. The extraction and production of these metals (especially of the latter) is highly unsustainable because of high energy intensity (Huisman et al., 2003; Menikpura et al., 2013). Therefore, this Audi initiative can lower the production’s negative environmental impact, even though the extend of this initiative remains unclear because the car maker only seems to publish the absolute amount of saved metal and not the more meaningful relative savings. In Metro’s case, it is open to speculation if their reverse logistics initiative in cooperation with a reseller is also a refurbishment initiative. While the retail group reports that used electronic products are collected and tested, it is an open question if repairable products are then refurbished. Could be, as this recovery seems economically and ecologically sustainable.
- - - - - - - - - - - - - - - - - - - - - - - - - - -
-
McKinnon (2015) indicated that take-back programs like these can decrease the carbon footprint of waste management in urban regions, but the question remains, why Metro only takes-back combined with the condition that the persons bringing their old electronic and electrical appliances become Metro’s costumers. As a retailer, it has to take back batteries even if the consumer does not buy anything and could do the same with electronic waste. This shows that Metro’s ability to act in a sustainable manner before regulations can lead to a higher performance.
As mentioned before, all seven companies report recycling practices. However, some questions still remain unanswered: Is the company reporting initiatives of making its products recyclable or is the initiative about using recyclate as own input? Second, the quality of recycling: Is the product downcycled or up-cycled (Desai & Mital, 2003)? The vehicle makers Audi and Porsche have to comply with the same statutory recyclability quota of 85 percent of their vehicles for 2015. Moreover, it seems remarkable that Audi managed to accomplish this statutory requirement so early. Arguing for Karnani (2011), this recycling law might be inefficient in enforcing CSR because Audi’s profits and public welfare anyhow seem to be aligned. Either way, both producers implement initiatives to make recycling of their
Unlike the companies discussed until now, Linde combines forward and reverse logistics, thus avoiding waste and pollution. The company utilizes gas cylinders that depending on its content and application they are reused on average four times a year. Whereas Linde reports that the cylinders have a lifespan of “many years” (Linde AG, 2014b) which is not 104
IFAC MCPL 2016 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
cars feasible. Audi participates in a battery recycling research project. As the literature indicates and against public opinion, this recycling of lithium ion batteries for electric vehicles is practicable and efficient (Schwarzer, 2015). Audi emphasizes that goal of the research is to develop environmentally sound processes, so it shows that it keeps in mind that recycling is not per se sustainable. Similarly, a Bayer subsidiary already uses a certain recycling method to recycle 1,500 tons of batteries a year (29% of rate). However, reviewed literature demands that companies should not only research processes of battery recycling because there are already working recycling plants in Europe. By contrast, an infrastructure for lithium ion batteries in Germany is still missing; journalists criticize (Schwarzer, 2015). Audi initiated two vehicle material recycling projects that are dealing with aluminum. These initiatives have the potential to not only make the vehicle production more environmentally sustainable, but also create jobs with a new recycling industry, hence enhancing the social sustainability. Noticeably, both vehicle makers appear to lack information on possible use of recyclate in their vehicles. This is in contrast to the representatives of all other researched producing companies. Porsche starts the recycling process already in the design phase, by labelling plastic components and planning the disassembling of its vehicles. Notwithstanding the relatively high amount of diverse recycling initiatives, Linde’s subsidiary Afrox sets the only found example of an upcycling project. Perhaps the recent research on cost effective and feasible up-cycling of CRFP can lead the industry to new processes in this field. Nilakantan and Nutt (2015) show that not only small scale and like in Linde’s case side business initiatives are possible. The company has a recycling rate of 56%. Continental stresses that it does not export waste, and in the context of informal recycling and the possible damage to people and the environment mentioned by Halabi et al. (2013), this should be the basis of a waste management. In contrast to the demand of Huisman et al. (2003), no company seems to minimize the material variety of their products in order to increase the recyclability.
105
reduce waste for disposal in one of its plants by 30 percent. Maybe Linde’s worldwide recording project for gas cylinders can lead to less hazardous waste disposal or at least correct treatment because Linde reports that these containers require special means of disposal. Unlike the other companies, Porsche reports that it follows an own waste management concept which it understands as an enabler for improvement in environmental sustainability. Noticeably, the vehicle maker engages its suppliers in avoiding waste. 3.3 Pollution Control Just like in waste management, preventing pollution is sustainably superior to reducing or managing it (Hart, 1997). Against this background, it strikes that only Metro mentions an initiative of complete pollution prevention. Though it may be questioned if its target to phase out F-gases until 2025 is actually ambitious. With the exception of Continental, all researched companies implement a pollution management system. Only Audi, Porsche and Linde seem to explicitly take manage their plant’s noise pollution. The indirect stakeholders are thus considered, so the companies become more socially sustainable (Heinrichs, 2014). Only two companies mention voluntary pollution compensation programs in their reports. Both Audi and Linde report to participate or have initiated international reforestation projects. In order to be truly sustainable, the projects should include the care for the trees. The companies indeed mention a future perspective for the initiative. While Audi says its project is designed to run several generations, Linde only indicates that it spent a certain amount on planting and maintenance in the reporting year. However, neither of the companies can estimate the amount of GHG that are compensated or saved because of their projects. On the other hand, the relating concepts to measure the sustainability impact of such initiatives have their limits (Pagell & Shevchenko, 2014). 4. CONCLUSIONS The paper aims to analyze the initiatives for sustainable waste and pollution management that have been implemented by the seven selected German companies. The question whether there are striking industry dependent differences in the respective company waste and pollution management practices cannot be answered in general. Refurbishment and remanufacturing do not seem to fit to the chemical, pharmaceutical, materials industry, and are well implemented in the automobile and retail sector. Although the literature indicates that this kind of practice is sustainably superior to recycling, it may lead a miserable existence in all the companies’ reports. Is it because the image of refurbishment suffers from its unclear definition and a connected shoddy image?
3.2 Waste Disposal As the literature suggests, the best waste disposal is the prevented one (Fiksel & Hill, 1997). However, only four of seven companies report of waste reducing initiatives. Complementary, all automobile companies Porsche, Audi and Continental, plus Bayer and Linde state that their waste is disposed correctly which should be the minimum requirement towards the sustainability. Of course, this does not implicate that the remaining companies use illegal disposal methods. In Merck’s case, the company outsourced the waste disposal nearly completely. In order to make sure that the contractors dispose correctly, it can audit and approve them, as Porsche does. Metro’s report seems to lack information on its waste disposal initiatives besides the comment that the retailer substantially reduced its disposal rate in Eastern Europe. Unfortunately, Metro leaves it open how it accomplished this. Similarly, Linde states the will to achieve further reductions of hazardous waste reduction, without telling a specific initiative. In contrast, Bayer explains why it was able to
In contrast to this, recycling initiatives are highly represented in the reports which might reveal the companies’ priorities in the corporate sustainability strategies. However, using recyclate seems to be a non-issue for the selected vehicle makers. This could change with image carrier models that promote recyclate interiors as green life-style insignia. 105
IFAC MCPL 2016 106 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
Evidently, up-cycling appears to challenge producers more than common recycling. Only one company mentions a related initiative which besides is a small project. For the chemical and pharmaceutical industry with their strict recycling regulations this seems to be out of reach, although the automobile and retail industry could do more. Similarly, although almost all companies have pollution management programs, the prevention aspect was found in only one of them. Voluntary compensation programs, a relatively new research field and object of opposing forces, still seem to be uncharted territory for most companies. Another interesting but not surprising conclusion is that companies’ actions are focused on environmental sustainability and few actions regarding social sustainability were found.
Desai,
A.,
&
Mital,
A.
(2003).
Evaluation
of
disassemblability to enable design for disassembly in mass production. International Journal of Industrial Ergonomics, 32(4), 265–281. European Commission. (2011a). White Paper: Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system.
Brussels,
Belgium. European Commission (2011b). A renewed EU strategy 2011-14 for CSR Brussels, Belgium.
Due to the small sample ad research method chosen, conclusions cannot be generalized, but some relevant questions could be addressed. The discussion has shown that companies seem to avoid stronger commitments. That is partly because once published, a sustainability initiative or statement can hardly be withdrawn without image costs. Additionally, very rarely the financial and strategic benefit of a reported sustainable initiative is appealed by the company. Complementary, different definitions of some terms, e.g. reuse, open a wide scope of interpretation by companies. They tend to use wider interpretations of sustainability concepts for the purpose of marketing, thus losing a potential pioneering role in implementing an effective sustainable supply chain management. Further research in form of expert interviews with mid-level managers and stakeholders could be useful in order to clarify some doubts and enrich the results. Moreover, the sample size could be enlarged by considering companies on an international level. This could conceivably reveal other impact factors on the companies’ policies of W&PM.
Fiksel, J., & Hill, M. (1997). Design for Environment: Creating Eco-Efficient Products and Processes. Journal of Product Innovation Management, 14(1), 69–70. Golicic, S. L., & Smith, C. D. (2013). A Meta-Analysis of Environmentally Sustainable Supply Chain Management Practices and Firm Performance. Journal of Supply Chain Management, 49(2), 78–95. Govindan, K., Soleimani, H., & Kannan, D. (2015). Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future. European Journal of Operational Research, 240(3), 603–626. Halabi, A. X., Torres, J. R. M., Pirachicán, D. C., & Mejía, D. (2013). A modelling framework of reverse logistics
Acknowledgments
practices in the Colombian plastic sector. International
The authors would like to thank CNPQ for financing Juliana K. Campos during her stay in Germany.
Journal of Industrial and Systems Engineering, 13(3), 364. Hart, S. L. (1997). Beyond Greening: Strategies for a
5. REFERENCES
Sustainable World. Harvard Business Review: Vol. 11.
Ageron, B., Gunasekaran, A., & Spalanzani, A. (2012).
Hatcher, G. D., Ijomah, W. L., & Windmill, J. (2011). Design
Sustainable supply management: An empirical study.
for remanufacture: A literature review and future research
International Journal of Production Economics, 140(1),
needs. Journal of Cleaner Production, 19(17-18), 2004–
168–182.
2014.
Arnette, A. N., Brewer, B. L., & Choal, T. (2014). Design for
Heinrichs, H. (2014). Nachhaltigkeitswissenschaften. Berlin:
sustainability (DFS): The intersection of supply chain and
Springer Spektrum.
environment. Journal of Cleaner Production, 83, 374–
Huisman, J., Boks, C. B., & Stevels, A. L. N. (2003). Quotes
390.
for environmentally weighted recyclability: Concept of
Campos, J. K. (2015). Integrated framework for managing
describing product recyclability in terms of environmental
sustainable supply chain practices. Schriftenr ed. Berlin.
value. International Journal of Production Research,
Berlin: Univ.-Verl. der TU Berlin, Berlin, Germany.
41(16), 3649–3665. 106
IFAC MCPL 2016 February 22-24, 2016. Bremen, Germany Jonathan Ullwer et al. / IFAC-PapersOnLine 49-2 (2016) 102–107
107
Ijomah, W. L. (2002). A Model Based Definition of the
Rogers, D. S., & Tibben-Lembke, R. S. (1999). Going
Generic Remanufacturing Business Process: University
backwards: Reverse logistics trends and practices. Reno:
of Plymouth.
University of Nevada, Reno, Center for Logistics Management.
Karnani, A. (2011). CSR Stuck in a Logical Trap: A
Schwarzer, C. M. (2015). Die Maer vom Sondermuell auf
Response to Pietra Rivoli and Sandra Waddock's “‘First
Raedern.
They Ignore You…’: The Time-Context Dynamic and Corporate
Responsibility”.
California
Management
Retrieved
from
http://www.zeit.de/mobilitaet/2015-08/elektromobilitaet-
Review, 53(2), 105–111.
batterie-recycling
Keoleian, G. A., & Menerey, D. (1994). Sustainable
Tate, W. L., Ellram, L. M., & Kirchoff, J. F. (2010).
Development by Design: Review of Life Cycle Design
Corporate social responsibility reports: A thematic
and Related Approaches. Air & Waste, 44(5), 645–668.
analysis related to supply chain management. Journal of Supply Chain Management, 46(1), 19–44.
Kumar, S., & Putnam, V. (2008). Cradle to cradle: Reverse logistics strategies and opportunities across three industry
Thierry, M., Salomon, M., van Nunen, J., & van
sectors. International Journal of Production Economics,
Wassenhove, L. (1995). Strategie Issues in Product
115(2), 305–315.
Recovery Management. California Management Review, 37(2), 114–135.
McKinnon, A. C. (Ed.). (2012). Green logistics: Improving the environmental sustainability of logistics (2. ed.).
Wagner,
J.
(2011).
Incentivizing
sustainable
waste
management. Ecological Economics, 70(4), 585–594.
London: Kogan Page. McKinnon, A. C. (Ed.). (2015). Green logistics: Improving
Waite, M. (2013). SURF Framework for a Sustainable
the environmental sustainability of logistics (3. ed.).
Economy. Journal of Management and Sustainability,
London: Kogan Page.
3(4). Walther,
Menikpura, S. N. M., Gheewala, S. H., Bonnet, S., &
G.,
&
Spengler,
T.
(2005).
Impact
of
Chiemchaisri, C. (2013). Evaluation of the Effect of
WEEE‐directive on reverse logistics in Germany.
Recycling on Sustainability of Municipal Solid Waste
International
Management
in
Thailand.
Waste
and
Biomass
Journal
of
Physical
Logistics Management, 35(5), 337–361.
Valorization, 4(2), 237–257. Messelbeck, J., & Whaley, M. (1999). Greening the health care supply chain: triggers of change, models for success. Corporate Environmental Strategy, 6(1), 39–45 Nilakantan, G., & Nutt, S. (2015). Reuse and upcycling of aerospace prepreg scrap and waste. Reinforced Plastics, 59(1), 44–51. Pagell, M., & Shevchenko, A. (2014). Why Research in Sustainable Supply Chain Management Should Have no Future. Journal of Supply Chain Management, 50(1), 44– 55. Porter, M. E., & van der Linde, C. (1995). Green and Competitive: Ending the Stalemate. Harvard Business Review, 73(5), 120–134. 107
Distribution
&