The commercial interests in the RENAS system in two periods

Inthis section we present how the commercial interests in the RENAS system have been organized in the two contract periods from 1999 to 2002, and from 2002 to 2005.

7.3.1 The commercial interests from 1999 - 2002

The first contract period for RENAS was initiated in cooperation with Elektronikkretur and Hvitevareretur (one tender). The contracts were signed individually with the actors in the systems. RENAS issued contracts to each of the 72 collection sites, four transport operators and four reprocessing units. The actors had standardized contracts. That is, all collection sites had identical contracts, the transport operators had identical contracts and the reprocessing

Case2:The RENAS system units had identical contracts. The contracts specified that the actors had to report directly to RENAS, who had to facilitate communication between the actors. The following figure illustrates the structure of the contract relationships in the RENAS system:

Collection sites

RENAS AS Transport operators

Figure 7. 9:The coordination of commercial interests in the RENAS system 1999-2002

The main content of the contracts included'":

• The actors were given geographical dedicated areas to work with.

• Specifications of who the actors were expected to interact with.

• Operating activities and standards (packaging, availability, opening hours, etc).

Operating activities and standards are somewhat different for the different types of actors.

• Collection sites: Faced specific demands with respect toprovide information to the local community.

• Transport operators: Faced specific demands with respect tofrequencies.

• Reprocessing units: Faced specific environmental demands with respect to dismantling.

RENAS' responsibility in the collection system included:

• National information (e.g. Internet and brochure material and newspapers)

• Administration of the system (registration of data, compensate the actors)

162

Case2:The RENAS system

The collected products are sorted into categories in the collection process. The products are registered in seven categories at arrival at the reprocessing unit, and the materials are sorted into 40 product groups when dismantled. The authorities have defined the 102 categories, and the other categories are defined by RENAS. The process can be illustrated as follows:

General electric is categorized into 102

product groups

Sort products into seven catellorles

Register inbound volume in 7categories.

Register outbound volume in 40 categories.

Reprocessing units

Figure 7.10: The sorting of products in the collectionsystem

RENAS compensated the actors based on these data. The compensation was agross amount in this period. General electric products have a large share ofvaluable materials, and RENAS calculated a certain income from the sales of these products. The income was to be deducted from the cost after the logistics operations had been performed in the collection system, and after the materials had been sold in the secondary market. The net income was, as such, expected to be returned to RENAS. Based on the logic from this compensation system, RENAS was supposed to cover the exact costs of reprocessing the materials.

7.3.2

The commercial interests from 2002 - 2005

The governing of the collection system changed in the second period. RENAS changed types of actors and, consequently, the content of the contracts. RENAS and El-retur did not coordinate a common tender in this second period.

RENAS entered into contracts with 140 collectors and 17 reprocessing units. The collectors were given identical contracts but the reprocessing units had individually negotiated contracts.

The contracts included the activities the actors were expected to perform, and the actors had to be ISO certified. Beyond these aspects the actors were left with a higher degree of decision making for the second period. One main feature was that the actors were allowed, and

163

Case2:The RENAS system

expected to negotiate directly with each other. That is, identify for themselves with whom to cooperate both within the system (the actors that have contracts with RENAS) and with other relevant actors (actors that do not have contracts with RENAS). The actors were free to decide between themselves how to best organize their activities, as long as they kept the quality standards that RENAS had set.

"I am very satisfied with how the system has changed. Now we are able to govern all that happens around us. In thefirst model wewere very dependent on everything else. Nowweare in the center of things," Elektronikkgjenvinning VEST

Inthe second period, the actors have contracts with both RENAS and their operating partners.

The contract relations in the system can be illustrated as shown below:

RENAS AS

Figure 7.11: The coordination o/the commercial interests in the RENAS system

r

^period

RENAS made two changes to support the new activity structure. The actors were not limited togeographical areasand a newcompensation modelwas established.

The compensation model changed from a gross to anet amount. RENAS paid the actors a fixed price for their services, without expecting returns. Inthis model the actors were able to keep the margins gained from increased efficiency. Inthe first model, RENAS set a fixed margin and any surplus from increased efficiency had to be returned. The actors were in the

164

Case2:The RENAS system 2nd period directly tied to their own performance. The more their efficient operations, the more money they make:

"We are very satisfied with the RENAS system. It works very well. We are compensated/or the workwe do. " Follo Truck Utleie

"RENAS has a very nice model. In the RENAS model we receive a certain amount

0/

money and are able to buy materials from the market. " Elektronikkgjenvinning

Collected or delivered products still needed to be sorted in accordance with the seven defmed categories. If end-consumers wanted to have products collected or to deliver unsorted materials, it was up to the specific collector whether the end-consumers paid for the services.

The collector had to provide the proper facilities (packaging) for collection of the general electric products, and ensure that the correct products were delivered to their sites:

"In the RENAS system, the collectors have to deliver the products to one

0/

the 17 reprocessing units. The products are supposed to be sorted into the 7categories, which they are paid according to. It is then up to us to control the products and secure the quality. Ifthe quality is not to standards, we have to do the sorting over again. In this sense all the parties watch over each other, and provide stability to the system. It works quite nice in this sense. "

Elektronikkgjenvinning VEST

The actors are no longer limited to geographical areas. This increased the competition between the actors. The actors were expected to spend time actively looking for volume, both within and outside the system. The collectors were expected to find end-consumers, rather than waiting for the end-consumers to fmd them. With an increased possibility to gain higher earnings, the incentive increased the search for waste:

"We engaged a consultant that traveled around/or one semester to all the Eli-companies in our area and promoted the return possibility at our collection site. All the customers were given a/older a/printed material. " ROAF Bøler

"With respect to the commercial dimensions, i.e. being creative towards the waste owners, the collectors are free to do whatever they like. We want there to be competition between the collectors. It will stimulate them into finding volume actively, and give an edge to the operation. We strive/or competition in our system. " RENAS

They were also expected to identify which reprocessing unit(s) to work with and negotiate agreements with them:

Case2:The RENAS system

"It is possible for us to choose the cooperating reprocessing unit. We issued a tender and decided on the reprocessing unit. " ROAF Bøler

The same applies to the reprocessing units. The increased competition between the reprocessing units increased the incentive to promote offers to collectors, and as such look actively for partners:

"In the RENAS model we are expected to address the market. Itisan interesting model with a higher degree of a free marketplace. In the RENAS model we have to actively seek the volume, or someone else will. " Stena Miljø

"We are a collector and a reprocessing unit in the RENAS model. Wefocus on reprocessing, but try to get a relationship to collectors. I work a great deal with getting these types of relationships. We think about hiring a sales representative to get in contact with collectors and generate volume for us. " Stena Miljø

The earnings were in other words, dependent on their direct effort. This goes for the dismantling function as well - the better the solutions for the handling and dismantling of products, the higher earnings.

RENAS also started the second period with the decision to hold annual seminars for the actors in the collection system. The collectors are invited to a yearly 'collectors seminar', and the reprocessing units are invited to a yearly 'reprocessing seminar'. The seminars include training on how to identify general electric products (in order not to collect wrong categories ofEE-products), and information about the performance of the system. The seminars facilitate communication in the system, and RENAS wants the actors to share experiences and give feedback about the system:

"Deviance from the contract may be based on misunderstandings. An important task for RENAS is to organize seminars for the actors of the system. Itisa new industry, and focus is to develop knowledge on how to handle the returned products. " RENAS

In document Coordinated action in reverse distribution systems (sider 182-187)