The final details of how the Waste Electrical and Electronic Equipment (WEEE) Directive will be implemented have yet to be finalised, but firms should already be taking steps to minimise the cost and disruption caused by this massive impending change to the supply chain. The directive means electrical and electronic equipment producers and retailers will be responsible for collecting, disposing of and recycling their products at the end of their life. Supply chains will come under intense pressure from the volume of resulting returns.
The first of two consultation periods about how the directive is implemented ended recently, highlighting all sorts of issues including confusion over just what products will be included; queries about how retailers will be able to physically take back products; how the products will need to be treated; and doubts about just who will foot the bill – estimated by the Department of Trade and Industry (DTI) to be up to £455M annually. The second consultation period started on December 1, 2003, to resolve some of these issues.
All electrical retailers and producers should make it their business now to find out what’s happening and start getting a feel for the likely implications. The DTI’s website – www.dti.gov.uk/sustainability/weee – contains lots of good information and is a good starting point. There’s a DTI consultation going on so… consult! Talk to your local Chamber of Commerce or local authority. Approach your trade association about it. Take any and every opportunity to ensure that the way the directive is implemented suits YOU. This is particularly important for small and medium companies. Don’t just let the big voices be heard or you’ll end up with legislation that suits them, not you.
Get the WEEE Directive into your business plan. Make some kind of provision for the costs you will face, like extra transport and warehousing to cater for returned items, more labour if you need to expand your team, and any costs associated with final disposal or recycling at a third party. You may employ a specialist logistics company to provide you a complete returns solution to ensure you meet the WEEE requirements.
Several good opportunities could arise for retailers because of the directive. One is the opportunity to postpone the costs of disposing of products or recycling them by refurbishing good quality returns (for instance new items returned by consumers shortly after purchase) and selling them on as-new, perhaps with some kind of warranty. There are currently few outlets for this kind of business.
Responsibility for meeting the directive’s requirements sits squarely with electrical and electronic goods producers, but retailers that sell a re-badged product in their own name will be treated as being the producer for the purposes of the WEEE legislation. Firms should consider whether or not it’s worth continuing to sell re-badged goods in their own name or simply stick with third party brands. Similarly, importers of goods will also be treated as producers so firms need to think about where they source goods from and what the implications could be.
Those who sell over long distance – the Internet for example – face particular problems in meeting their obligations to collect goods under WEEE requirements. High street vendors have a nationwide network of sites which could collect and forward returned goods, but e-tailers face the unwelcome prospect of paying for individual collections from end users, unless an alternative scheme is found.
All firms should take a hard look at how their existing returns are handled with a view to streamlining or outsourcing their return logistics before the strain of the huge volumes of returns that will result from the WEEE Directive starts to strike. August 2005 may sound a long way off but there is a huge amount to be done if retailers are to meet their new obligations in a planned, measured and cost-effective manner. Taking steps now is crucial.
Richard Rogers is general manager of warehousing and distribution at Royal Mail.
