George Blanas, Stelios Koukoumialos and Stamatia Kylindri
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1 INTRODUCTION
According to the European Council Directive 2000/53/EC (2000) for The End-of Life Vehicles (ELVs),
reverse logistics is defined as “the process of planning, implementing, and controlling the efficient, cost
effective flow of raw materials, in-process inventory, finished goods and related information from the point of
consumption to the point of origin for the purpose of recapturing value or proper disposal”. The Directive
2000/53/EC has been amended by a number of Commission Decisions (2002/525/EC, 2005/53/EC,
2005/438/EC, 2002/151/EC, 2003/138/EC, 2001/753/EC, 2005/293/EC) and then by the Directive 2008/33/EC
of the European Parliament and of the Council. Critical issues in the EU ELV legislation is that manufacturers
should achieve reusability and/or recyclability of at least 85% and if measured against the international standard
ISO 22620 to achieve reusability and/or recoverability of new vehicles produced after 2008 of at least 95% by
weight and that this goal should be reached by 2015. Producers are pushed by legislation to take the
responsibility to manufacture new vehicles with a view to their recyclability. Other important issues are: [1] the
use of lead, mercury, cadmium and hexavalent chromium are prohibited in materials and components in vehicles
put on the market after 1st of July 2003, [2] the block exemption regulation that provides to independent repair
businesses open access to information on parts and repair processes, [3] that newer vehicles’ ecology should
concentrate on CO2 emission reductions, [4] that preference of plastic materials that are recyclable, and [5] that
member EU countries legislate collection – dismantling systems for ELV management that ensure that all
vehicles are transferred to authorized treatment facilities, and the last holder of an ELV is able to dispose it free
of charge.
While the Directive is based on the so called Extended Producer Responsibility Principle (EPR) that
requires from the producers to accept the responsibility to apply the Directive most manufacturers do not seem
to have the capability or the capacity to do that individually, mainly due to asymmetries in manufacturing and
remanufacturing capabilities.
The aim of this paper is to identify possible asymmetries in manufacturing and remanufacturing
capabilities between countries within the European Union. Moreover, there has been an effort to identify the key
characteristics of the EU manufacturing automobile industry profiles and directions.
The remainder of this paper begins in section 2 with a brief presentation of literature background on reverse
logistics in the automotive sector. Section 3 accommodates the analysis and the findings of this research, while
the paper concludes in the Section 4 with arguments arising from this study, useful managerial insights and
definition of future research challenges for the authors.
2 LITERATURE REVIEW AND INSIGHTS
In the last years reverse logistics has become a critical aspect in global competition, forcing companies to
adopt certain policies and practices. The outcome is that the optimization of reverse logistics processes, by
taking into consideration financial, environmental and regulatory issues, constitutes a rapidly evolving research
field (Xanthopoulos et al., 2012, de Brito, 2004). Reverse logistics offer the appropriate contextual framework
within which the examined problem can be tackled comprehensively. According to Rogers and Tibben-Lembke
(1998) “reverse logistics is the process of planning, implementing, and controlling the efficient, cost-effective
flow of raw materials, in-process inventory, finished goods, and related information from the point of
consumption to the point of origin for the purpose of recapturing value or proper disposal”. The integrated
supply chain model as developed by Thierry et al. (1995) includes both forward and reverse logistics operations
and distinguishes three main areas, i.e. waste management, product recovery management and direct reuse.
According to Rogers and Tibben-Lembke (1998) the possible reverse logistics activities for products are “return
to supplier, resell, sell via outlet, salvage, recondition, refurbish, remanufacture, reclaim materials, recycle and
landfill”. Out of the corresponding reverse logistics activities remanufacturing has the higher relative impact on
energy preservation (Steinhilper, 1998).
In the automobile sector, ELV waste flow is a major environmental concern because of its rapidly
increasing amount and special composition of hazardous substances (Simić & Dimitrijević, 2010). In that
direction, the European Parliament Council (2000) 2000/53/EC Directive legislates critical issues in the
European Union (EU) End-of Life Vehicle (ELV) legislation and is based on the so called Extended Producer
Responsibility (EPR) principle that is holding producers responsible for the recovery management of their
products at the end of their life. Under the Directive, member EU countries legislated collection – dismantling
and shredding facilities for ELV management acting as PROs for the vehicle manufacturers.
According to Reinhardt (2005) the application of the EU Directive is not standardized across the EU
countries and result in non-standard practices. He also states that the automotive industry prefers that higher
level of reuse is being determined by market and is against the application of quotas. The impact of the EC
Directive to manufacturing and remanufacturing activities has drawn increased global research attention (Yu,
Welford & Hills, 2006). Thierry et al. (2005) identified the antinomy of legislation that cannot be enforced on a