Handling Reverse Logistics for PET Recycling
By 2050 it is predicted there will be more plastic than fish in the sea. More than 300 million tonnes of plastics are produced annually, and there are at least five trillion plastic pieces floating in our oceans. According to the National Geographic, plastic bottles and bottle caps rank as the third and fourth most collected plastic trash items in the Ocean Conservancy’s annual September beach clean-ups in more than 100 countries.
This crisis can be curbed but takes corporate and social impetuses to do so. Globally, beverage companies have pledged to use more recycled bottles in manufacturing, a goal that aims to reduce the production of new resin and boost recycling numbers by adding value to bottle recovery.
Africa is making a change. According to PETCO, the Kenyan PET Recycling company, the manufacturing industry in the country is targeting to achieve 45% recycling rate of the polyethylene terephthalate (PET) bottles produced this year. In 2008, Rwanda enacted a law prohibiting importing, producing, usage or sale of non-biodegradable polythene plastic bags. The 2019 law became extensive and prohibits the manufacturing, importation, use and sale of plastic carry bags and single-use plastic items.
In fact, recently Coca-Cola Beverages South Africa (CCBSA) launched a pilot project to see if a new range of returnable 2 litre PET plastic bottles can be worked on a dumpy scheme – the same way some glass bottles can be returned for a deposit.
Obviously, there is immediate emphasis on PET, but the type of returnable container is not just restricted to this type of plastic bottle.
Types of Returns
The type of item to be returned depends heavily on the particular FMCG category and may vary drastically between countries and regions.
Within the beverages space this could relate to a returnable glass or PET bottle. Within the dairy space, one may return the bottle and crate. Crates within the bread sector are often returned to ensure consistent delivery and keep replacement costs down.
How does this type of returnable container impact your logistics? And what processes within your route-to-market logistics need to be blueprinted.
The Impact on the Supply Chain
Incorporating reverse logistics requires a substantial reworking of the entire supply chain. There are two important aspects to consider, namely (1) the storage of the empties and (2) the capturing and refunding of the empties. Here are our 4 impact points to consider when creating / adding reverse logistics to your distribution:
1. Pricing and Bundling
Deciding how to price the returnable container may affect how you create your stock items. In some scenarios a crate is added to an item in a product bundle, in others it is added to an additional stock item. Choose a mechanism that works for you and your business.
2. Empty Storage
Typically for larger retail outlets within the primary distribution holding empties is probably an easier task as there is more stockroom space to handle interim storage of empties between deliveries. However, in the secondary main market distribution, this may play a challenging role. Space is at a premium. Keeping empties reduces the space for sellable stock. As a result, the number of deliveries and collections will increase.
3. Empty Refunding
In order to ensure adequate collection, these PET bottles will have to have a financial value to merit returning. On collection from the merchant, this value will have to be calculated and deducted from the merchant’s account. Having the ability to print a clean nett invoice in-trade reduces the time and effort in keeping the books tidy and the client happy.
4. Empty Returns
The decision to collect returnables may impact your delivery cycles. It may require a dedicated collection cycle in order not to impact deliveries. However, not many companies can carry the cost and fleet to do so. Through adequate forward planning based on complete line of sight of the value chain you can optimize route planning and utilize the existing fleet.
Giving forewarning on the quantity to collect, is relatively easy for most software solutions. However, given the agile nature of the main market, keeping this operationally sound could prove challenging. Using a software solution that offers the ability to pre-plan routes and collection schedules and the mobile flexibility to take on ad hoc returns, ensures operational and sales efficiencies.
FIELDForce is a modularised mobile and web-based supply chain solution that offers field force automation nestled on a distribution and warehouse management platform. The backend system allows business to run an entire distribution supply chain, keeping track of stock and expenditure while the front-end mobile application enables your Trade Marketers, Sales and Field Force to interact with customers, record orders and stock movement, and deliver clean nett invoices in-trade every time.