It is becoming clearer to manufacturers that they can not simply react to packaging waste regulations just because of the heavy fines imposed on those who don’t meet the targets outlined. When looking at the whole question of packaging, companies that will benefit most are those who consider the entire supply chain. Businesses must look at what is the annually recurring cost of over-packaging within the supply chain and identify changes that deliver the greatest margin improvement.
So what’s all this got to do with logistics providers? The answer is a great deal. There are many companies who understand the benefits of implementing environmental best practice and general process improvements but are not so confident about what to do and how to do it.
The key to a successful recycling and recovery operation will be the efficiencies throughout the supply chain that can be implemented by both customer and logistics partner – pooling their knowledge resources to develop the most suitable solutions. Indeed, companies that do and look at the overall wider improvements to supply chain processes are likely to benefit from a superior corporate image and stakeholder goodwill too.
However, this assumes that logistics providers are up to speed on environmental requirements. Those that aren’t will find themselves left behind, as environmental expertise becomes a requirement at tender stage, like health and safety and risk management understanding. Indeed, there have already been lost contracts and exclusions from the tender process, as clients increasingly expect their suppliers to support their environmental objectives and overall process improvement. Indeed, the packaging waste regulations should be seen as one part of a complete process improvement programme, with clear aims and objectives.
Companies may be surprised that the logistics provider can play a significant role in a whole range of environmental considerations – from location of warehouses and therefore distance travelled by vehicles, to materials used in packaging; there is a great deal of strategic input the knowledgeable logistics advisor can bring to bear.
The regulations are complex and operating in a European and, indeed global market place, the onus is on logistics providers to help clients as logistics consultants on the latest UK and European environmental industry issues.
Logistics providers need to be the environmental and overall process strategic ‘brains’ in their client relationships. For different types of products, differing issues will need to be considered. From computers to cars, all have packaging waste implications but with very different requirements.
Using the example of electrical and electronic equipment, the Waste Electrical and Electronic Equipment (WEEE) Directive will have a large influence on how a company’s waste stream is managed. The Directive sets out measures that aim, firstly, at the prevention of waste electrical and electronic equipment, secondly at the re-use, recycling and other forms of recovery such as energy from waste and thirdly at minimising the risks and impacts to the environment associated with the treatment and disposal of WEEE.
Current and proposed legislation on WEEE, as well as end-of-life vehicles, are just two examples of where opportunities will arise for innovative logistics suppliers.
Moving onto larger high value products, for instance motorcycles, manufacturers, logistics providers and dealers are faced with a product that requires significant packaging. Traditionally, dealers have been delivered in abundance of waste packaging, as well as the end product, as motorbikes need to be supported with stillages and require protective packaging.
It is here that reverse logistics plays a significant role. As well as co-ordinating the disposal of the packaging, logistics companies return the metal stillages used to support the motorbikes back to the manufacturing plant for re-use.
The introduction of similar reverse logistics operations will become much more prevalent. A relatively new phenomenon, until now little time has been invested in the engineering of the logistics process in reverse. Those logistics providers who are ahead of the game, running successful reverse logistics operations, will be able to exploit their expertise to a relatively un-tapped market.
Moving on to the FMCG sector, the recycling and recovery process again needs careful initial planning. Changing the way a product is packaged and presented to the end consumer will be the answer in some cases. Ideas such as the use of plastic, reusable totes within the major grocery retailers supply chains, have shown that solutions which are environmentally responsible, can also aid the flow and presentation of the products ? and save money.
The differentiator will be those logistics providers who can take this new ‘burden’ away from the customer, enabling them to concentrate on their core activities. Most companies don’t have a specific environmental manager and so manufacturers in general don’t want and can’t afford to devote time and resource to environmental matters.
From product transport to its final presentation to the customer, all areas need to be explored in a partnership approach between the logistics provider and customer. The way the product packaging and indeed the product itself is designed, to the materials used to package products, will all assist companies to reach the European targets set and in turn achieve cost savings due to better use of resources and process improvements.
This more proactive approach, with companies taking time to consider the bigger, more positive picture, may not only reduce the impact on the environment but more importantly, from a commercial perspective, help to cut costs and improve margins. Therefore, investing in the short-term by evaluating packaging being used will bring long-term benefits, both environmentally and financially. It should also be seen as an area of opportunity for the logistics sector. n
Graham Margetson is director of Foresite Systems, an expert on the packaging waste regulations. Tel: 0247 6652111.