Waste Management: a Strategic Supply Chain Issue

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Waste Management a Strategic Supply Chain Issue

• Chris Hicks
• Oliver Heidrich
• University of Newcastle

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Waste is a strategic issue

• Because
• Companies are facing intense competition which
  leads to strategies that seek to reduce costs
  through minimising all types of waste
• National and international regulation and
  legislation is increasing
• Customers are increasing concerned with the
  environmental impact of products and services

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Manufacturing view of waste

• Any activity which consumes resources or creates
  costs without producing any offsetting value
  stream
• Ohnos 7 wastes
• Overproduction
• Waiting
• Transportation
• Inappropriate processing
• Unnecessary inventory
• Unnecessary motions
• Cost of defects
• Bicheno added untapped human, waste of
  inappropriate systems, wasted energy water,
  wasted materials, wasted customer time,defecting
  customers

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Legal definitions

• Any substance or object which the holder
  discards or intends, or is required to discard
  (Framework Directive on Waste)
• Wastes are substances or objects which are
  disposed of, or are required to be disposed of by
  national law (Basel Convention)
• The first definition is absolute whereas the
  second is relative to national law.
• Discard is viewed as having broader meaning
  than dispose

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EU Court of Justice Definition

• Something can simultaneously be waste, a
  product, good, raw material or substance,
  irrespective of economic value, collection,
  processing etc. This definition is independent of
  qualitative or commercial value, possible market,
  geographical purposes or destination of waste
• This definition makes no distinction between
  waste and non-waste

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Waste

• EU has waste streams that are receiving
  priority attention packaging, end-of-life
  vehicles, batteries, electrical and electronic
  and hazardous household waste.
• May be considered in terms of processes caused
  by variability, it may be turned into non-waste
  by additional processes
• Waste is relative to primary function, process
  or owner
• Categorised according to source household,
  industrial and commercial
• Classified by properties, hazardous /
  non-hazardous, radioactive etc.

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EU Principles

• Prevention principle
• Producer responsibility and polluter pays
  principle
• Precautionary principle
• Proximity principle

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Environmental and operations management

• Companies may see environmental management as an
  external constraint. A narrow legal function
  concerning compliance with legislation
• Operations managers can plan, influence and
  leverage environmental issues for competitive
  advantage.
• Environmental technologies can reduce operating
  costs, create competitive advantage and long-term
  risk whilst pre-empting regulations

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Approaches

• Clean design majority of life cycle costs
  committed at the design stage. Design largely
  determined waste during construction, operation
  and decommissioning.
• Bicheno 4 Rs Redesign, reduce, recover, recycling
  and remanufacturing
• Life cycle costing
• Life cycle assessment.

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Table 1 An indication of the methods that apply
at each level of the waste hierarchy
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A functional model of waste Management in supply
chains
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Case study
Initial conditions
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Functional model after application of new strategy
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Conclusions

• Many interpretations of the word waste.
• Manufacturing focuses upon value, whereas
  legislation and regulation focuses upon physical
  waste.
• Poor integration of organisational functions can
  be a barrier to effective environmental
  management.
• Majority of cost and environmental commitments
  are made at the design stage.
• A functional modelling method has been proposed
  for waste management.
• A case study has demonstrated how waste can be
  minimised through the strategic development of
  supply chains.