Chapter 11

Investment Recovery

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Scrap Recyclers Handle 120 Million tons/year

• 60 million tons of scrap iron and steel• 47 million tons of scrap paper and paperboard• 5.1 million tons of scrap aluminum• 1.7 million tons of scrap copper• 1.1 million tons of scrap stainless steel• 1.4 million tons of scrap lead• 248,000 tons of scrap zinc• 2.3 million tons of scrap glass• 745 million tons of scrap PET plastic bottles• 734 million tons of scrap HDPE plastic bottles

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Four Pieces of Federal Legislation Impact the Scrap Disposal Market and Sourcing

Procedures• Resource Conservation and Recovery Act (RCRA)

- Ensure that suppliers are competent and reputable and have an EPA permit

- Require the supplier to warrant that employees are trained in handling the specific waste

- Insist on the right to inspect the facility and the EPA permit

• Toxic Substances Control Act (TSCA)- Requires suppliers to warrant that any chemical or chemical

mixture they provide is listed by the EPA

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Four Pieces of Federal Legislation Impact the Scrap Disposal Market and Sourcing

Procedures• Comprehensive Environmental Response, Compensation and

Liability Act (CERCLA)- Purchasers must track the amount and type of chemicals that

enter and leave the plant and consult the Material Safety Data Sheets (MSDS)

• Clean Air Act Amendments- Purchasers can choose environmentally friendly products,

establish criteria for supplier selection that limits purchases from suppliers that sell damaging products, and be alerted to alternatives, substitutes or new technology that may help their companies meet the goals of the act.

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The EPA’s Voluntary Compliance Programs

• Climate Wise• Commonsense Initiative• Design for the Environment• Electronic Commerce/Electronic Data Interchange• Environmental Accounting Project• Environmental Leadership Program• National Environmental Performance Track Team• Sector Facility Indexing Project• Sustainable Industry Project• WasteWise

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Environmentally Responsible Purchasing Practices Can Reduce Costs

• Reducing the obsolescence and waste of MRO supplies through better inventory management

• Reducing costs from scrap and materials losses• Lowering costs of handling hazardous materials• Increasing revenues by converting wastes to by-products• Reducing the use of hazardous materials through more

timely and accurate materials tracking and reporting systems

• Decreasing the use and waste of chemicals and solvents• Recovering valuable materials and assets with efficient

materials recovery programs

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Environmental Management

•Reduce

•Reuse

•Recycle

less riskless complexityeasier to implementsmaller environmental benefits

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Materials Recaptured from a Computer

PersonalComputer

Plastic

Pothole Filler

Aluminum

Cans, Foil

Steel

CarsConstruction Beams

Nonleaded Glass

Usable Glass

Copper

Wiring, Pipes,Computer Circuitry

Lead

Car Batteries,Film

Leaded Glass

Asphalt,Industrial Abrasives

Precious Metals

Jewelers, Dentists,Chip Makers

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ISO 14000 Framework

Environmental Management

EnvironmentalPerformance

Systems

EnvironmentalAuditing

EnvironmentalLabeling

Life CycleAssessment

EnvironmentalManagement

Systems

EnvironmentalAspects in

Product Standards

Organizational Evaluation Product and Process Evaluation

Source: Melnyk et al., ISO 14000: Assessing Its Impact on Corporate Effectiveness and Efficiency, Tempe, AZ: CenterFor Advanced Purchasing Studies, 1999.

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Benefits of Effective Disposal Programs

• Cost recovery• Cost reduction and avoidance• Customer service• Quality control• Protect intellectual property and brand identity• Comply with government regulations• Reclaim valuable materials from customers• Control product liability• Improve public image

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Categories of Material for Disposal

• Excess or surplus materials

• Obsolete material or equipment

• Rejected end products

• Scrap material

• Waste

• Hazardous waste

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Reasons for Assigning Disposal of Materials to the Purchasing Function

• Knowledge of the materials, equipment or substances being disposed

• Knowledge of price trends and the market• Contact with salespeople and information as to possible users

of the material• Familiarity with the company’s own needs for the material• The company may not have a surplus material disposal group

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Disposal Channels

• Use elsewhere in the firm “as is”• Reclaim for use within the plant• Sell to another firm for use on an “as is” basis• Return to the supplier• Sale through a broker• Sale to a local scrap or surplus dealer• Donate, discard or destroy the material or item

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raw material processing

The Reverse Flow of Materials in the Supply Chain

manufacturing distribution consumption

recovery

recycle remanufacture reuse

wasteprocessing

disposal

resell

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Selecting Disposal Partners

• Selling, not buying materials places the purchaser in a new role• Understand regulatory issues

- fines, penalties• Disposal practices have implications for operations

- impact on processes, labor costs• Use appropriate segregation and transportation methods based

on volume of material• Internet and technology applications

- Internet marketplaces provide access to a large number of potential bidders