Two birds, one stone
Strategy and concept Industry players and markets

Two birds, one stone

Wednesday, 21 March 2018

Shoppers in Glasgow are taking part in a pilot project, whereby they drop unwanted electrical goods in shops as they buy their everyday items. As Tim Maughan finds, this means opportunities for the remanufacturing business.

Remanufacturing is commonly associated with the handling and reforming of business and industrial products. But a pilot study in Scotland is pioneering a programme which links the high street consumer, a national distribution company, and a remanufacturer. Stavros Karamperidis, assistant professor of shipping and international logistics at Heriot Watt University in Edinburgh, speaks of "trade flows, and how you can move products from point A to point B”. In an interview with ReMaTecNews, he explains: “I realised that there is an opportunity for [transport] businesses, as they operate half empty, are coming back not fully loaded, so the utilisation ratio could be increased.”

“Small electrical appliances are not usually disposed of properly, they are usually just thrown in the bin, thrown in the garbage, end of story”

Increased utilisation
The unusual reman study is trying to identify how to increase the utilisation of companies from a logistics perspective, and has teamed up with transport company Menzies Distribution to find out. The products under scrutiny are small household electronic devices such as toasters, telephones, and laptops, whose disposal falls under Waste Electrical and Electronic Equipment (WEEE) regulations. Menzies vehicles drop a load such as magazines at a shop - nothing unusual about this part of the transport chain - but then the remarkable part of this reman process swings into action. Shop customers drop their unwanted devices in dedicated areas of the shops, as they buy everyday items. The defunct goods are then dropped at Menzies warehouses, before being trunked to remanufacturer CCL North in Irvine, Ayrshire. "We prefer small electrical appliances that usually end up in landfill, because small electrical appliances are not usually disposed of properly, they are usually just thrown in the bin, thrown in the garbage, end of story," he says. The pilot scheme is currently funded by the Scottish Institute for Remanufacturing.

Selling point
Committed recyclers could well be prepared to drive some distance to drop unwanted WEEE goods, but it is hard to picture such a process on a large, national scale. The beauty of the scheme - Karamperidis is part of a four-strong team working on the project - is the fact that the customers kill two birds with one stone: they buy their goods from the shop and drop their WEEE items at the same time. Convenience is a major selling point. "We are trying to do some analysis of what people are feeling about small electrical products after they reach the end of the lifecycle, and we found that they weren’t bothered because the collection centres were so far away from them. It is changing the perception of WEEE," he says. Unwanted items like laptops and smartphones carry a lot of personal information, Karamperidis asserts, and that even after their disposal, security is important. "We have bags and boxes where they can be stored safely, because of the personal data that exists," he adds. Customers are given a receipt when they drop an old device, and the item can be traced through the supply chain.

“We should probably be a bit more open-minded in the future, if we want to make remanufacturing work…If you cannot share information in the supply chain, you cannot reduce the costs”

Satisfying needs
Karamperidis emphasises that it is vital to understand the needs of the retailer, a crucial conduit on whom the project depends. "We have to satisfy the need of lots of shops,” he points out. “They are busy, selling other stuff, and of course having a dedicated space in a convenience store, just for remanufacturing products, they want to keep the stock as minimum as possible on their premises.” The extra business for the remanufacturer is an obvious benefit, but what's in it for the retailer? The outcomes of the pilot project are yet to be fully realised, but Karamperidis stresses that there is already a noticeable increase in consumer ‘traffic’, with more customers visiting the shops - to both buy daily products, and to drop their toasters, phones, laptops, and so on, at the reman spots. Shopkeepers are given a small bursary, in exchange for their loan of the shop space. Funding is an issue (see box, How the scheme works. "I also think that local councils could help us, because, at the end of the day, we are removing waste from their waste chains,” he points out. “We are asking the customers to make a selection about what's going in the bin, and what's not, and we're saving the landfill from poisonous products.” But he acknowledges: "We are still in a preliminary phase, and we don't know the outcomes. Without knowing the outcomes of the pilot, we cannot really say who's going to be the funder we are looking for."

Information circulation
Efficient supply chains are important, too, states Karamperidis, not least for the remanufacturer: "As long as you are able to provide cheap transportation, because remanufacturers operate on very narrow margins, they can break even. They have a special delivery, with X company, which is going to cost them let's say £15 to collect an old mobile phone, and they have to spend a lot of money to remanufacture it, and send it to the market." In the long term, warns Karemperidis, it will be vital that information is circulated among all parties, across the chain. He concludes: "The overall initiative is good for the environment, and it's good to try to identify what's developing. I think that we should probably be a bit more open-minded in the future, if we want to make remanufacturing work, because at the moment everybody is keeping their cards close, without sharing information. And if you cannot share information in the supply chain, you cannot reduce the costs.

How the scheme works
Menzies Distribution was an obvious choice for the pilot scheme, chiefly due to its large scale of operation. The company was unfamiliar with remanufacturing but was keen to get involved. "We have a great match,” explains Stavros Karamperidis of Heriot Watt University. “They deliver anywhere in Scotland, any convenience store. Scotland is a very remote and isolated area, apart from the central belt. There are a lot of places in the Highlands that are remotely located." To date, the pilot study has focused on Glasgow, and is still in its first phase. As further analyses and information are collated, and outcomes noted, Karamperidis says that the project is likely to cover fresh geographical areas. At the moment 13 convenience stores are participating in the project: launched in September last year, its first phase was due to finish at the end of January 2018. "We are collecting the data and making decisions on a weekly basis, so we have some preliminary outcomes,” he says. “Everyone is so happy with what we are collecting, and the quality of the products.” He expects, with all the information collated, to run a second, two-week pilot project in May this year. There are also plans to expand the scheme into a "pan-Scottish base". The implementation date of the main programme, though, is yet to be set in stone. "We have to think about [further] funding applications,” he concedes. “It's research for us, so if we don't get any external funding, it's impossible. As a university, we have to have to a researcher associated with a project, someone dedicated to the project, and to keep an eye on what is happening every day, and the overall operations. Also, we need to keep an eye on the marketing of the campaign, because we have to motivate and educate people. That is what we are doing as a university. We have to liaise with the partners every day, find out how the deliveries are going, how we can create optimisation, and the overall supply chain."


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