In the past few years, new developments, technical enhancements of existing products, and shorter useful lives of electric and electronic devices have significantly increased the amount of waste created by the products. To reduce the amount of waste to be handled and to encourage recycling, the European Union issued Directive 2002/96/EG “on waste electrical and electronic equipment.” The directive requires manufacturers to plan for the redemption and recycling of their devices.
The scope of the EU directive is quite broad, covering all devices that require electrical energy to operate. The directive covers devices from households, recreation, sport, and entertainment in private homes; it also covers commercial devices, such as electronic tools, IT and telecommunication devices, lamps, output devices, control devices, and medical devices. Accordingly, the new regulations affect numerous industries.
New Challenges for Manufacturers
The directive went into effect throughout the European Union on August 13, 2005. But implementation of the directive in individual member states is left up to the government of each nation.
Manufacturers that sell their products within only one country must complete and register their equipment waste with a device classification and weight that correspond to the reporting requirements of that country. The challenge is greater for companies that sell their products throughout Europe. Whether it’s a computer from the United States or a game console from Asia – wherever the company is headquartered – a manufacturer that operates anywhere in Europe must create country-specific business processes that deal with the different temporal and practical adherence to regulations on the collection, salvaging, recycling, and, in particular, returns of their products. Manufacturers must also notify the appropriate authorities of the processes they have created. “The WEEE directive allows a great deal of leeway for national characteristics. Accordingly, the realization of this directive for Panasonic, which has 15,000 products worldwide, is a particular challenge,” says Thomas Knopp, IT director for realization of European environmental compliance at Panasonic Europe.
It makes no difference if the devices come from private households or form commercial users. It makes no difference if they came on the market before or after August 13, 2005. In general, a neutral instance in the environmental office of individual member countries registers the devices centrally to determine the market share of individaul manufacturers.
One Directive Implemented Many Time in National Law
In Sweden, for example, the industry organization El-Kretsen has dealt with WEEE returns since 2001. At the commercial level, devices are collected in recycling centers; El-Kretsen then handles transportation, disassembly, and additional processing. In Finland, industry umbrella organizations Serty Oy and Elker Oy handle these tasks.
In Germany, collection sites are set up at the community level; manufacturers have the devices picked up and sent on to recovery centers. Manufacturers and importers of electric and electronic devices in Germany have agreed to found a registry of old electric devices (known as EAR in its German abbreviation). In the future, EAR will receive notification of devices brought on to the market; the first reports are due on November 24, 2005. Based upon the notification, EAR will determine the market share of some 20,000 manufacturers and coordinate local collection of old devices. The manufacturers have hired various service providers to recover and transport the devices.
In Austria, the national environmental office registers manufacturers. In addition to identifying and classifying their products, Austrian manufacturers are responsible for collection and recycling. They can meet their responsibilities by setting up their own systems for returns, or they can employ a third party to do so. The situation in Italy is similar except that chambers of commerce are responsible for registration.
But dealing with WEEE is an important topic beyond the confines of the European Union. Even non-member states like Norway and Switzerland have issued regulations that are similar to WEEE. More and more countries outside of Europe, such as the United States, Korea, and Japan, already have legal regulations for dealing with old devices or plan to issue such regulations sooner or later.
Many Countries, One Solution
The regulations for registration, return systems, and recycling are as diverse as the EU’s 25 member states, but all manufacturers are required to issue notifications of devices brought to the market. This notification is the core of the REA Recycling Administration solution. Originally developed by SAP SI for the settlement of packaging recycling, this add-on from SAP covers directives on batteries and the requirements of the new EU directive. For SAP R/3 4.6C, SAP R/3 Enterprise, and mySAP ERP, REA is integrated into SAP software for materials management, sales and distribution, financial accounting, and controlling. Because REA accesses SAP master data directly for the required material and item information, users do not need to maintain data more than once.
With REA, all recycling partners – each with its own settlement rule, price lists, and conditions – can maintain SAP master data. Specific recycling partners and country-specific regulations for each device are displayed at a glance – an important feature for manufacturers that operate throughout Europe.
Panasonic’s Knopp is well-aware of the advantages of the solution for his company. “The greatest advantage is that REA is seamlessly integrated into the world of SAP solutions and that it draws information from master data records. Because the solution manages all entries for each recycling partner and company code, it can consider the varying settlement rules of the various recycling partners exactly,” he says.
The devices and their components can be classified according to type and category as required by specific regulations. Document output in REA provides certification of the devices and the quantities brought into circulation. It takes just a few clicks of the mouse to generate period notification with classification and net weight or number of items monthly, quarterly, or annually. Notification can be sent to environmental organizations just as easily. And annual settlement requires just as little effort.
As an encapsulated solution, REA can be implemented quickly and easily for WEEE reporting – without affecting SAP R/3 or mySAP ERP. Implementation does not affect productive systems and can usually be accomplished in 10 to 15 days for two countries. Above all, it can be easily modified to meet national requirements.
Dr. Dietmar Giljohann, IT director for recycling processes in Europe at Braun-Gillette, and Claudia von Dungen from the logistics department agree. “For European sales of electronic devices for households and beauty care at Braun-Gillette, the existing REA solution could be successfully implemented within the allowed cost and time in Portugal, Spain, and Austria to meet WEEE requirements. The greatest challenges came not from IT, but rather from the sometimes rapid changes to laws in individual member states of the European Union,” says Giljohann.