Money Matters

Economics, Banking, Finance, and Supply Chains

Why reverse logistics is WAY better than recycling

Reverse logistics: Image shows a reverse logistics pipeline flow

Reverse logistics is a phrase a first stumbled across about a week ago.

When I googled for what it means, I was left with the distinct impression that it means “recycling”.

Except, maybe it IS “just” recycling

But, convinced that it can’t be just a new buzz phrase for an old idea, I read several articles I found via a Google search, and 9 out of 10 talks about “end of life” and “waste” and “circular economy”.

That sounds like recycling.

The other ones talk about e-commerce returns. When we buy stuff from Amazon or Zappos or whatever eCommerce platform we use, we send some of it back.

Why is reverse logistics hard?

The recycling articles all identified the same set of challenges:

  • The materials needing recycling are geographically spread out.
  • As a result, economies of scale are elusive.
  • Sifting and sorting is labour intensive.

Anyway, this got me thinking about recycling, how it’s not new, and how we’re really not very good at it, and I started wondering if ANY companies that make stuff are any good at it.

Do any manufacturing firms do a good job?

Turns out, the answer is only a few, but some. So, yes.

Now, to be fair, these companies have defined “recycling” or “reverse logistics” more narrowly than we generally think of, but what they’re doing has value.

They’re striving to reduce waste from their manufacturing processes, which all by itself is challenging.

And some companies have actually achieved zero waste going to landfills.

Intel

As of three years ago, they recycle more than 75% of the total waste generated by their operations.

Estee Lauder

Zero waste to landfills at their 23 owned manufacturing and distribution centers since 2003.

Subaru of Indiana Automative

In their only US manufacturing plant, they’ve sent nothing to landfills since 2005.

They actively solicit ideas from employees and claim recycling saves them between $1M and $2M every year.

Sierra Nevada

At the Chico California brewery, in 2013 they started sending their spent brewing ingredients, over 150,000 pounds a day, to local cattle and fairly farms who feed it to their animals.

Toyota North America

Achieved a 96% reduction in their non-regulated waste in 2015, totaling over 900 million pounds.

Unilever

In 2015 stopped sending any waste to landfills at over 240 of its factories, resulting in savings of over $225 million.

Common threads?

I’m not sure we have a large enough data set to see patterns here, and of all the companies whose claims of recycling success I found, I did not mention companies whose claims were vague.

“Drastic reduction” didn’t make the cut, whereas 96% reduction did.

I thought this fair as if a company isn’t measuring, can they really know?

But in general, our recycling record is not good

Today, in most industrial nations, people consume about a credits card worth of plastic a week.

That’s because microplastics are in our food and our water.

So in aggregate, we’re not doing so good.

But as long as there is profit in producing waste, and no profit in eliminating waste, I don’t see this changing.

I think our best hope is technology

Maybe plastic-eating bacteria.

Maybe Borg nanoprobes.

I guess we’ll need to stay tuned and see what developes.

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