Sustainable Solutions for SCM

5.4 Logistics and recycling In economics, logistics has traditionally been an area of expertise based on the value chain from the raw material source to the consumers. From the production oriented logistics of the 50s, we have come to the business-oriented logistics of the new millennium. The company management includes the logistics strategy as an important part into the general strategy of the company. 5.4.1 Recycling logistics The logistics is a part of the infrastructure of the community which development is a basic presupposition when developing other activities. The significance of the logistics may be in industrialised countries over 50%, while in developing countries it may be less than 5%. The community controls in various ways the development possibilities of the logistics. The most typical means are economic means (disadvantage taxes, tax reductions, subsidies, legislation etc.) and competition restrictions. The expansion of economic areas gives new development areas to the logistics. Because of the interdisciplinary nature of logistics, its sphere of influence and possibilities are wide also in the recycling development. Present material and capital (cash) flows can become two-way flows with the help of recycling and especially two- way distribution. The recycling logistics observes the flow of information, money andmaterial during the whole life cycle of the product including all necessary organisational arrangements (see Figure 5.5). The recycling logistics integrates into several levels of business life, which makes the control and realisation of the recycling objects possible. To meet the recycling objects is hardly the primary object of the company, but the significance of recycling and environmental matters in several strategic decisions cannot be denied anymore. Therfore, the effect of the recycling logistics in business life accumulates. Usually the rejection and disposal of a product or material has been solved by separate refuse disposal logistics in which the observation area is the functions between the “birthplace” of waste/refuse and the dumping ground. The material flows have been two- way but the logistics flows one-way flows. When the recycling flow becomes connected with the material flow the distribution logistics becomes two-way and reduces the need of the refuse disposal. The development of the recycling logistics as a part of supply, production and distribution logistics makes the maximal utilisation of existing materials possible.

Figure 5.5 The connection between the recycling logistics and logistics

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