Product Take-Back Legislation and Its Impact on Recycling and Remanufacturing Industries
9.5 Conclusions and Future Research Directions
Fueled by the increasing number of countries enacting legislation on product take- back, the operations management literature on such legislation has been growing.
A common feature of work to date has been the use of stylized analytical models and the research questions studied have been of the strategic type such as what type of legislation should regulators prefer and when, what type of legislation is most cost effective for producers, what type of legislation provides better incentives for remanufacturing and/or remanufacturability, etc. While this line of work generated invaluable insights regarding how environmental legislation affects various decisions in electronics supply chains, we believe that future research should concentrate more on the operational details of take-back legislation implementations.
An aspect of product take-back that has not been modeled in detail to date is the process of product collection. Models usually include a per-unit collection cost, but the party or parties who are allowed to take EOL products back have not been
explicitly modeled. In practice, one or more of the following parties may handle the collection: retailers, municipalities, producer-owned collection points, etc. The question of optimal reverse channel design has been studied in the absence of take- back legislation (e.g., Savaskan et al.2004; Savaskan and Wassenhove2006) and we believe that this question should be revisited for products facing take-back legis- lation. It is likely that the return volumes for products facing take-back laws will be higher, products returned may be in worse condition than products returned purely for economic reasons, etc. and because of these differences in the reverse channel, a channel structure that was optimal prior to legislation may not even be feasible under legislation.
To further the operations management research on product take-back legislation, we believe that it is necessary to better understand the recycling and remanufactur- ing processes and the related costs. Existing body of work on take-back laws have provided some insights regarding what type of legislation and compliance scheme is best for the environment and the producers, and the results, to a large extent, depend on how the compliance costs are calculated. Unfortunately, the functional forms that are used to estimate the costs of different steps in the collection and treat- ment processes are not validated by data but rather based on reasonable assumptions.
For example, it is commonly assumed that collection cost is linear or convex in the number of units collected. Therefore, this line of research would benefit from testing the appropriateness of these assumptions by using the data that are available at the parties involved in different steps of compliance.
Finally, there is definitely room and need for empirical research in this field. An- alytical models have provided some insights on what type of environmental benefits to expect from different types of legislation, and testing these findings empirically would make a nice research contribution.
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