SR - Cost Drivers Learning Event February 2004 - Gaydon Cost Drivers Related to the Recovery of...

SR - Cost Drivers Learning Event

February 2004 - Gaydon

Cost Drivers Related to the Recovery of End-of-Life Vehicles (ELVs)

Shahin Rahimifard

Advanced Manufacturing Systems and Technology Centre Wolfson School of Mechanical and Manufacturing Engineering

Loughborough University



Advanced Manufacturing Systems and Technology Centre

• AMST Centre was formed in 1990.

• One of the registered R&D centres of the Department of Trade and Industry (Dti).

• Involved in more than twenty major National and European R&D programmes, and also alarge number of short term industriallyfund project.

• Centre’s activities are typically based on : -

Manufacturing Systems Engineering

CAD / CAM Technologies

Production Planning and Control

Information Modelling and System Integration

SME Manufacturing Research

Sustainable Product Design and Manufacture

www.lboro.ac.uk/AMSTC



1) Environmental Conscious Manufacturing VersusSustainable Development

2) Closed Loop Manufacturing

3) End-Of-Life Vehicles (ELVs) Directive

4) Cost Drivers Related to the Recovery of ELVs

5) Concluding Remarks

Presentation Contents



• Environmentally Conscious Manufacturing (ECM)Environmentally Conscious Manufacturing (ECM) concepts are

concerned with minimisation of the negative impact of manufacturing

activities on the environment through developing equipment, methods,

procedures and environmental standards.

• Sustainable DevelopmentSustainable Development is defined as “development that meets

the needs of the present without compromising the ability of future

generations to meet their own needs”. The contemporary view of

this concept is based on three pillars of Social, Economical, and Social, Economical, and

EnvironmentalEnvironmental issues.

Environmentally Conscious Manufacturing versus Sustainable Manufacturing



Product Life Cycle Approach to Sustainability



Pre-production Production Post-production

Pollu

tion

Contro

lPo

llutio

n Preven

tion

•Product Design for Environment

•Energy Minimisation•Waste Management

•Waste Minimisation

•End-of- lifeManagement

Business-Organisational Issues

•Life Cycle Analysis

Not Applicable

Not Applicable

•Product Recovery

Life Cycle Approach to Sustainability



TransformedTransformed

Manufacture

Use

Recovery

Sup

plyManufacture

Use

Disposal

Supply

Traditional Manufacturing

Sustainable Manufacturing

One of the Major Goals of Sustainable Manufacture



Sort/AssessSort/Assessthe used products

Re-process/Re-process/RecoverRecoverthe used products

Collect Collect the used products

Supply Manufacture Use

Additional Activities within Closed Loop Manufacturing



Remanufacture Remanufacture is where the discarded products are repaired, reconditioned and re-supplied. Typically remanufactured products do not change shape or functionality.

ReuseReuse is the disassembly and reclamation of parts , components, and modules within discarded products for reuse in old or new products.

RecycleRecycle is the reclamation of the material from parts, components, and modules within discarded products.

IncinerationIncineration is the reclamation of energy within the parts, components, and modules of discarded products as the last resort when all the aforementioned options are not possible.

Product Recovery Options



fabricationAssembly

Used ProductInventory

RecoveredModule/PartInventory

Recycled Material

Disassembly RecycleRepair

Manufacturing Supply

Repair

Customer

Energy RecoveryDisposal

Waste / Scrap

Material Supply

A Holistic View of Product Recovery Options



A simple equation for calculating the EOL value of a product to a company is :-

If EOL Value = End-of-life product value to a company

EOL Revenue = Revenue from material and components for reuse

Cost Col & Trans = Cost for collection and transportation of EOL products

Cost Reco & Recy = Cost for processing EOL products

Cost Resell & Redis = Cost of resell and redistribution of recovered parts and material

Then

EOL Value = EOL Revenue – [Cost Col & Trans + Cost Reco & Recy + Cost Resell & Redis ]

End-Of-Life (EOL) Value



Supplier Manufacturer Distributor Customer Collector

Recoverer

Used products are returned to the original manufacturer

Manufacturing activities are expanded to include recovery operations

Business Model 1 to Support Product Recovery

Often is based on a Product Leasing initiative e.g. photocopiers, PCs



Independent

Recoverer

::

SupplierManufacturer

Distributor Collector

SupplierDistributor Collector

Customer

Customer

Customer

Manufacturer

Independent recoverer carries out the recovery processes

Recovered products can be supplied back to original manufacturer orbe sold to any third party customer

Business Model 2 to Support Product Recovery

More suitable for consumer products with a wide geographical distributione.g electronic and electrical goods, cars, packaging waste



EnvironmentalLegislation

New Technology& Processes

MarketConditions

Materials,Resources,

& Skills

Cost Drivers in Cost Drivers in Sustainable Product Sustainable Product

Design and ManufactureDesign and Manufacture

Major Cost Drivers In Sustainable Product Design and Manufacture



• To cope with the environmental effects of estimated ‘nine million’ tonnes of vehicles that reach the end of their useful lives each year in Europe, the European Union drew up the End-of-Life Vehicles (ELVs) Directive which came into force on 21 October 2000.

• Member States should have transposed the Directive into national law by 21 April 2002. The ELV directives came into force in the UK on the 3rd November 2003.

• Purpose is to encourage the design of new vehicles that :-

a) Facilitate dismantling, reuse, recovery and recycling of their components and materials,

b) Integrate an increasing amount of recycled materials into new products, and

c) Limit the use of hazardous substances.

End-of-Life Vehicles (ELVs) Directives



Producer ResponsibilityProducer Responsibility is one of the main features of this directive whereby the Vehicle Manufacturer is responsible for the take-back and recycling of all the vehicles they produce from 2007.

• Producers (vehicle manufacturers or importers) to pay ‘all or a significant part' of the costs of take back and treatment from January 2007.

• Producers, Dismantlers and Shredders etc. to establish adequate systems for the collection of ELVs from the outset.

Recovery TargetsRecovery Targets for all End-of-Life Vehicles by weight have also been set by the ELV Directive which are :-

• 85% of by January 2006 (minimum 80% recycling), and

• 95% by January 2015 (minimum 85% recycling).

A Summary of ELVs Directives



It is estimated that around 2,000,000 cars

are scrapped in the UK every year, fromwhich :-

Size of the Problem in UK

•1,400,000 million are true ELVs,

• 400,000 crashed/premature write-offs, and

• 300,000 are abandoned vehicles.



Some examples of technological challenges in the recovery of ELVs

•Fuel tanks, made out of high density polyethylene, are now a feature on more than 60% of new European cars and represent one of the biggest plastic components. One of the biggest challenges for recycling has been to find ways of removing fuel residues and other coatings that accumulate on the fuel tank during its lifetime and would otherwise taint the raw mate

•Heat resistant polyamide plastics, such as Nylon, used in the demanding environment found under the car bonnet account for between 15 and 20% of the plastics used in cars. However, because of tough quality standards, re-use and recycling of polyamides has been very limited.

Cost Drivers : New Technology and Processes 1



Cost Drivers : New Technology and Processes 2

Some examples of technological challenges in the recovery of ELVs :-

•Two industrial techniques already exist for sorting plastics for recycling. Unfortunately, both have flaws. Laser Induced Breakdown Spectroscopy (LIBS) can sort plastics at high speed with 100% accuracy for some of the most common types of plastics such as polyvinyl chloride (PVC) and polyethylene terephthalate (PET). However, it is unable to identify other types of plastics with the same degree of accuracy. An alternative technology using infrared beams can distinguish between all plastics, but the process speed is painfully slow.

•Used tyres represent one of the biggest environmental problems attributable to the car industry, with most of the millions discarded every year finding their way into local dumps. One of the main obstacles is economic: although recycling tyres is technically possible, it is cheaper to start from scratch with the original raw material. One way of cutting the pollution problem is to extend the life of existing tyres by rethreading. A reliable cost effective solution for this process is yet to be developed.



Current ELVs Recycling Practices

Source : Automotive Consortium on Recycling And Disposal (www.smmt.co.uk)



Current Recycling Operators/Actors

DismantlersDismantlers - recover the valuable parts and remove items such as batteries, tyres, fluids, hazardous materials e.g., containing mercury (depollution).

ShreddersShredders - separate materials by type into ferrous product, and non-ferrous product. Often bear the costs of ELVs waste for final disposal to landfill.

Media Separation PlantsMedia Separation Plants - separates non-magnetic shredder fraction by type into separate non-ferrous metal product.

Material RecyclersMaterial Recyclers - specialised for recycling Metal, Plastic, Tyres, Oil.



Source : Waste-Online (www.wasteonline.org.uk)

Breakdown of Materials (by weight) within Modern Cars



It is estimated that from the total weight of ELVs processed dismantlers and scrap yards :-

•Typically 70-75% of is metal. and•and other 25-30 % are non-metallic waste (often referred to as shredder residues) which

includes plastics, rubber, glass, textile, paint, oils and lubricants, paper and cardboard.

From Shredder Residues produced by dismantlers, scrap merchant and feeder yard :-

•70% recovered by Shredders to steel,•10 % goes to heavy metal plants for further recovery processes, and •20 % sent to landfill as waste.

Heavy Metal Plants will recover the following from their in feed:-

•7 % to steel, •20 % to aluminium, •13 % to magnesium, copper and zinc, and•60 % to landfill as waste.

450,000 tonnes of non-recyclable waste from ELVs is currently sent to landfills in the UK each year, which accounts for up to 10% of the UK’s annual total hazardous waste.

Cost Drivers : Materials



Mechanical recycling of flexible polyurethane seat foam from shredding residue for carpet underlay

Glass from shredder residue as road aggregate

Shredder residue to make paving slabs

Rubber used in road aggregate and playground.

Tyres are able to replace up to about 25% of the coal which would

otherwise be used in cement kilns, This processes could provide arecovery option for up to half of the UK’s total waste tyre arising.

Tyres have a high calorific value, about 20% greater than that of coal, which on burning can be harnessed to produce energy.

Reuse of Recovered Non-metallic Metallic Materials within ELVs



Dismantlers • Estimated at 5000 in total.• 3000 of them are licensed .• Each processed 250-1000 ELVs every year.• 55 % turnover from universal parts/used cars.

Shredders (in UK)• 37 Shredders• Very expensive to set up• Pay for sending the final waste to landfills.

Heavy Metal Plants (in UK)• Currently there are 4 heavy metal plants• 30-50% of their in feed is from ELVs.• 200 tonnes/hour of which 70% steel, 5% al, 20% waste.

Cost Drivers : Resources (in UK)



Design

•Modular construction aids replacement,

•Wearing parts should be easily accessible,

•Standard parts are better than special designs.

Management

•Reverse logistics

•Planning of recovery processes

•Inventory of new, used and recovered products

•Uncertainty regarding the quality and quantity of ELVs

Labour •Disassembly

•Depollution

•Recondition/Repairs, etc

Cost Drivers : Skill



Marketing implications

• Availability of market for recovered products, parts, or materials at a viable price.

• Positive marketing image as a result of environmentally conscious manufacturing

• Negative marketing implications related to product reliability issues.

Cost-benefit analysis

• Cost of non-compliance

• Hidden value of used products versus cost of recovery

• Capital investment requirements versus recovery revenue

Cost Drivers : Market Conditions



Loss

Profit

Time

A Predicted Pattern for Profit and Loss Account resulted by ELVs

The preliminary compliance cost assessment estimated that the cost of meeting the ELV directive in the UK will be

in the region of £360 to £520 million.



ELVs directive aims to reduce negative impacts to environment caused by vehicles at the end of their useful life.

The significant number of problems with the development and introduction of ELVs Directive, highlights a need for a more effective consultation procedures and input from industrialists and experts to the definition of future environmental legislation and directives.

Solutions for ELVs compliance will have to be :-•Sustainable to justify investment.

•Flexible to counter fluctuations in the global market.

•Competitive with the cost of virgin material.

ELVs compliance if managed properly could results in profit making opportunities.

Concluding Remarks



ACORD (Automotive Consortium on Recycling And Disposal)E-mail: [email protected]: www.smmt.co.uk

British Plastics FederationE-mail: [email protected]: www.bpf.co.uk

British Metals Recycling AssociationE-mail: [email protected]: www.britmetrec.org.uk

British Vehicle Salvage FederationE-mail: [email protected]: www.bvsf.org.uk CARE (Consortium for Automotive Recycling)Web: www.caregroup.org.ukE-mail: [email protected]

Motor Vehicle Dismantlers Association of Great BritainE-mail: [email protected]: www.mvda.co.uk

Sources of Information

SMMT (The Society of Motor Manufacturers and Traders Ltd) Tel: 020 7235 7000Web: www.smmt.co.uk

Oil Recycling AssociationTel and Fax: 01256 840049E-mail: [email protected]

Used Tyre Working GroupE-mail: [email protected] Website: http://www.tyredisposal.co.uk

The European Tyre Recycling AssociationE-mail: [email protected]: http://www.etra-www.com/

British Rubber Manufacturers’ AssociationE-mail: [email protected]: http://www.brma.co.uk

Department of Trade and IndustryRecycling Policy Section: 020 7215 1860Website: www.dti.gov.uk

The Environment Agency (EA)Website: http://www.environment-agency.gov.uk

SR - Cost Drivers Learning Event February 2004 - Gaydon Cost Drivers Related to the Recovery of...

Documents

Transcript of SR - Cost Drivers Learning Event February 2004 - Gaydon Cost Drivers Related to the Recovery of...