Every supply chain has waste reduction and recycling as a
major area of focus. The recycling of finished goods returns, either due to end
of life or due to dissatisfaction with the product has been well established
with sophisticated returns and reverse logistics value chains in place. However
in this blog post we will look at how waste raw material is managed. Raw
material or Work in Progress (WIP) stocks are generally marked out for removal
due to:
·
End of life or obsolete items
·
Non-moving stock which has to make way for newer
fast moving inventory
·
Waste generated from the manufacturing process
(left over pieces or by-products of the process which are not required in the
end-product)
The methods used to manage this waste are similar to that of
finished goods and in order of priority are:
·
Reduce the production of waste: Either by better
manufacturing processes (eg. Make the leather cut outs for handbags designed to
cover maximum area of the leather swathe through software programs) or simply
better inventory management (again maybe through the use of demand and supply
forecasting tools and technologies – inventory optimization software such as MEIO
or Multi-Echelon Inventory Optimization tools such as SmartOpps, Toolsgroup, etc.
are becoming increasingly popular in the luxury goods manufacturing process)
·
Re-Use: By ensuring raw material is utilized
across product ranges, the reuse %s can be increased and obsolete inventory
reduced. Delayed production and mass customization are some of the strategies
which are used to increase re-use of material
·
Recover: Either recover raw material through
refurbishment of the material or recover energy from the product. Luxury goods
industries regularly refurbish material or use raw material to convert to
energy
·
Dispose: the last option will always be the
landfill and luxury goods supply chain is more prone to use this option to
ensure the twin ideals of SCMluxe – Quality and Brand image are not sacrificed
at the altar of frugality
 |
| Recycled leather at petit h |
The house of Hermes has bucked this trend and come up with
an interesting alternative to the above – in the creation of the Petit h
atelier. The basic premise of Petit h is to create beautiful objects (just as
desirables as Hermes products) out of the waste and leftovers of its parent
company/ateliers or in its own words “The Petit h
project sees discarded Hermès materials 'upcycled' into new objects
of desire, building on the Japanese concept of wabi-sabi – were imperfections
of nature are viewed as assets of beauty”. Pascale Mussard (a sixth generation
member of the Hermes founding family) starts off by inviting artists to the
Petit h workshop at Pantin (Paris) where all Hermes discarded products are
piled up for the artists to indulge their creative spirits. The outcomes are as
diverse as porcelain cups are refashioned into light fittings, mirrors finished
with silk ties, crystal bowls becoming lamp shades and leather scraps (from
Birkin bags?) forming patterns on blouses. Thus typical Hermes waste such as discarded animal skins from the
"Kelly" and "Birkin" bags, other leather wear, and various
elements, such as handles, hardware, and discarded ceramics, are being recycled
into highly desirable products for sale under the Petit h metier.
