Sustainable Solutions for SCM

5.4.2 Objectives of the recycling logistics The objective of recycling logistics is to examine the recycling as a part of the whole value chain and ensure the vitality of the recycling system and its operation according to the market economy rules. Other basic requirements of the vitality include the following conditions: • Second-hand products or recycled materials must have adequate demand and supply. • Market price of the products cover all expenses caused by the recycling system. The general objectives of the logistics are similar with the objectives of the recycling logistics. These objectives can be divided into three areas: 1. Good customer service means at the consumer’s point of view the creation of flexible alternative collecting systems, distribution of required information and adequate selection in retail shops. For the industry which uses recycled material or parts, the good customer service means steady and secure deliveries and correct quality of the product/material. Customer orientation is unavoidable to the functionality of the recycling system if the object is along cost reduction also profit maximisation. The customer brings also in the recycling the income required to operate the system. In the case of recycling, it is hard to tell if the final customer is the consumer who buys the product or the industry which utilises the recycled material or product. In other hand, the final value of the product is measured by the first user. 2. High utilisation of the capacity means the maximal utilisation of the existing logistics and recycling infrastructure in the recyclingwhen starting the recycling system causes only mainly variable costs in logistics. The development- and realising responsibility of the recycling cannot be unambiguously divided into existing systems of commerce and industry. Instead the recycling systems are dominated by the one, who is most capable and effective, and who controls the total logistics value chain best. 3. Rapid capital turnover/rotation of the products and materials, which came into recycling do not bind capital for long and reduce both interest and inventory costs. With an effective logistics control and well-operating recycling markets, the inaccurate products, second-hand products and recycled material moves/ rotates rapidly in every phase of the value chain. The materialisation of the logistics objectives can be examined also in recycling with ROI, which gives an all-inclusive and true picture over the significance of the recycling logistics when organising the recycling (see Figure 5.6).

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