Logistical preconditions for economical reuse of end-of-life textiles

Hinkka, Ville; Heikkilä, Pirjo; Harlin, Ali Conference Paper Logistical preconditions for economical reuse of end-of-life textiles Provided in Cooperation with: Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management Suggested Citation: Hinkka, Ville; Heikkilä, Pirjo; Harlin, Ali (2018) : Logistical preconditions for economical reuse of end-of-life textiles, In: Jahn, Carlos Kersten, Wolfgang Ringle, Christian M. (Ed.): Logistics 4.0 and Sustainable Supply Chain Management: Innovative Solutions for Logistics and Sustainable Supply Chain Management in the Context of Industry 4.0. Proceedings of the Hamburg International Conference of Logistics (HICL), Vol. 26, ISBN 978-3-7467-6536-5, epubli GmbH, Berlin, pp. 105-121, https://doi.org/10.15480/882.1816 This Version is available at: https://hdl.handle.net/10419/209361 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-sa/4.0/ Logistical Preconditions for Economical Reuse of End-of-life Textiles Ville Hinkka1, Pirjo Heikkilä1, Ali Harlin1 1 – VTT Technical Research Centre of Finland Ltd The importance of textile recycling has long been highlighted and extensively covered in the literature. More recently, tightening waste regulations have forced household waste management organizations to seriously consider different alternatives for reducing the amount of textiles in mixed waste. To date, the high logistical costs associated with collecting, sorting and treating of end-of-life (eol) textiles has prevented the use of recycled textiles in production. The particular challenges of organizing these operations cost-effectively include small batch size, material diversity, and complex sorting and treatment processes. Finding economical alternatives for the reverse logistics of eol textiles will help companies that use recycled textile materials in large-scale production to evolve. This paper addresses the issue through mixed methods research combining a quantitative and qualitative approach. The paper is based on a case study of organizing the eol textile ecosystem in Finland. The material was obtained primarily from interviews with stakeholders and workshops. The economic impacts of different alternatives are compared using a designed cost model. Based on the study, local collection of eol textiles should be carried out at regional level using the expertise of local municipal waste companies. Centralized sorting and treatment enables adequate volumes to justify investment in automation and paves the way for economies of scale benefits. Keywords: Reverse logistics; Textiles; Recycling; Cost model First recieved: 28.May.2018 Revised: 01.Jun.2018 Accepted: 21.Jun.2018 105 Logistical Preconditions for Economical Reuse of End-of-life Textiles 1 Introduction In the developed world, most end-of-life (eol) textiles end up in municipal waste collection as mixed waste, meaning that they will end up in energy burning plants or landfills. In almost every country, charity organizations collect apparel in good condition either for sale in their own retail stores, as relief aid to e.g. areas suffering from natural disasters, or for sale inunderdeveloped countries. However, a considerable share of donated eol textiles are in such poor condition that they cannot be sold to other consumers in the country of origin, and transporting them to underdeveloped countries is ethically questionable (Norris, 2015). Reusing the material from eol textiles in new products therefore makes sense and is an important tool for increasing recycling rates. From an environmental point of view, recycling textile material is important as it can take more than 20,000 liters of water to produce 1kg of cotton (Bärlocher et al., 1999), but the reuse of 1 tonne of cotton clothing only uses 2.6% of the energy required to manufacture it from virgin material (Woolridge et al., 2006). Charity organizations compete in the second-hand clothing business, which meanstherearegoodprocedures for getting users of reusableclothes. Inaddition, some textile items no longer fit for purpose can be reused as raw material for other products without the need for fiber-level recycling, such as cast-off hotel bedding. However, once the recycling process moves to material and fiber-level, processing costs shoot up and the cost of recycled material can quickly exceed that of the corresponding virgin material. This is because a number of problems arise with the reuse of eol textiles as raw material for new products. First, the collected textile contains several types of material that need to be separated. To make matters worse, today’s apparel seldom comes in a single material but rather as mixture of materials that somehow need to be recognized and sorted. Second, eol textiles usually include built-in parts such as zips and buttons that need removing before the recycling process. Third, used textiles may have dirt that interferes with the recycling process difficul . Further issues may arise if the textile material is wet or contains mold or pests. A further challenge related to the reuse of eol textile material in developed countries such as Western Europe and North America is that their own textile industry has largely been shifted to other continents, notably South and East Asia. Thus there is only a limited number of industrial companies that could use collected textile material locally. One option could be to transport collected textile materials to countries with a large textile industry, but that has its own problems: Countries 106 2 Theoretical Background like China have recently prohibited the import of waste material, including eol textiles (Davies and Ding, 2018), and transporting material that is relatively cheap but vulnerable to e.g. humidity to the other side of the world has its own costs and lessens the environmental benefits of recycling. This paper examines the supply network of eol textile recycling. The aim is to find different alternatives for organizing operations within the network, because when there is enough information on available alternatives, it becomes easier to select the most functional ones and cut recycling costs to a reasonable level. Reasonable costs and an ensured supply of materials encourage the use of eol textiles as raw material for textile products as opposed to virgin material. This paper also aims to model the costs of recycled textile material, to help users evaluate their raw-material costs when planning a business related to the use of recycled textiles 2 Theoretical Background Waste Framework Directive 2008/98/EC (European Commission, 2008) outlines how waste is defined in the European Union and how it should be treated. The Directive not only makes recommendations on the treatment of eol waste but also recommends a ‘waste hierarchy’ that is applicable across all member states. In the hierarchy, the primary aim is to avoid waste. The hierarchy has four waste categories in order of desirability: Reuse, recycling, other recovery, and disposal. (European Commission, 2008; Gharfalkar et al., 2015). When the general aim is to reduce especially the amount of disposal waste, textile waste is one category that should be taken into consideration. Even if textiles normally represent a share of around 2.5% of all the household solid waste in Europe (e.g. Edjabou et al., 2015), it usually ends up in mixed waste; a study carried out in the Helsinki metropolitan area noted that the share of textile waste was 5.0% of all mixed household solid waste (HSY, 2013). Asaadi et al. (2017) also note poor recycling rates of eol textiles; they report that in the UK, the Nordic countries and the Netherlands, 61% of textiles end up in waste after only one cycle, and in the US the rate is as high as 85%. Textiles therefore represent a waste category that is poorly recycled and requires attention if the ambitious aims to reduce the amount of disposal waste overall are to be met. In addition, producing textile items from virgin materials is energy and resource consuming (Bärlocher etal., 1999). Increasingthe share oftextile recycling willhelp toachieve 107 Logistical Preconditions for Economical Reuse of End-of-life Textiles other environmental targets such as reducing CO2 emissions and use of natural resources (Woolridge et al., 2006). Based on Waste Framework Directive 2008/98/EC (European Commission, 2008), the primary way to recycle textiles is to use them according to their original purpose, or then as a raw material for new products without additional treatment (e.g. use the material of ripped cloth for a new cloth). If this is not feasible, the three most common ways to recycle fabrics are: 1) mechanical, 2) chemical, and 3) thermal treatment. In mechanical recycling, the textile is handled mechanically by e.g. tearing and recycled at fiber level. However, this is only suitable for products made from a single material. In chemical recycling for cellulose-based materials, the textile waste, such as cotton, is dissolved in a way that its raw materials are returned to fibers and hence a usable textile raw material. Chemical recycling varies depending on the fiber type, and synthetic fibers can be recycled via the chemical repolymerization route. Chemical treatments can be also used to separate raw materials from a textile made from different materials. Chemical treatment can also be used to some extent for dirty material. In thermal treatment, the fibers are heated and can be melt-spun again into new fibers. However, textile fibers lose some of their features during this process; thus the resulting material can be used for producing plastics but is not suitable for recycling textile material. Jahre (1995) lays out a framework for household waste collection as a reverse channel, analyzes different waste collection and sorting alternatives by using postponement speculation concepts (Boone et al., 2007), and suggests ten different propositions related to the issue. Based on the paper by Jahre (1995), increasing the number of fractions separated by collection level leads to higher collection costs but smaller sorting costs than where the numbers of separated fractions are smaller. However, increasing the number of fractions also creates more work for the consumer and heightens the risk that the material will not be suitable, as consumers may not properly separate the fractions. Nevertheless, when the number of fractions is smaller, there is greater risk of contamination with different materials, which complicates sorting in later phases of the supply chain. (Jahre, 1995) In summary, recycling eol textiles offers significant environmental benefits but is difficul to organize cost-effectively. Therefore, the eol textile recycling network should be considered as an entity in order to get the total costs for recycled textile material. In addition, a holistic view requires operations planning to be widely applicable and to support the general target of creating a functioning recycling 108 3 Methodology ecosystem. Therefore, solutions that offer benefits locally but are problematic in a network perspective should not be adopted. (Bing et al., 2016). 3 Methodology The paper is based on a single case study (Yin, 2013) of designing a countrywide eol textile recycling ecosystem in Finland. The data collection methods used in the paper are literature searches and mixed methods research (Johnson et al., 2007). In mixed methods research, a researcher orteamofresearchersintegratesqualitativeandquantitativeresearchapproaches within a single study or a set of closely related studies (Johnson et al, 2007; Creswell, 2009; Bryman and Bell, 2011). The main qualitative methods used were observation of the processes, interviews and workshops, while quantitative modelling (Bertrand and Fransoo, 2002) was mainly used to employ and analyze the data obtained from qualitative sources. The actual collection of qualitative and quantitative data was mostly conducted during the same stage, thus the approach of this study is concurrent triangulation design (Castro et al., 2010). The use of mixed methods is encouraged in supply chain management (SCM) research, because SCM phenomena are often complex and dynamic (Golicic and Davis, 2012). Finding functional and cost-effective processes for collecting, sorting and handlingeoltextilesis justthistype ofSCMphenomenon, as therelevantliterature is scarce and existing textile recycling systems are limited. Therefore, different methods were combined to obtain reliable answers to the research question instead of building an expensive textile recycling system that might fail. The literature search examined all kinds of electronic material related to eol textile recycling (scientific papers, research and project reports and other articles). In addition, figures on the costs, speed and capabilities of related technological solutions were sought by probing the web pages of equipment manufacturers and organizations running usedtextile collection pilots, among others. The search used keywords such as ’textile recycling’ and ’used textile collection’. It emerged that there is very little literature on the logistics of organizing eol textile recycling. As the technology related to sorting and reusing textiles is still in its infancy, the technological questions lean heavily on the current literature. The authors visited three plants that use recycled textile as a raw material for new products: two in France and one in Estonia. The visits gave an idea of the criteria 109 Logistical Preconditions for Economical Reuse of End-of-life Textiles requiredbyeol textile rawmaterial tomakeit eligible. The authorsalsovisitedtwo textile sorting centers: one in Germany and one in Estonia. In the semi-automated eol textile sorting center in Germany, human workers do the actual sorting but conveyor belts move the material. In the Estonian sorting center, which is run by a charity organization, human workers do all the sorting manually. These visits provided information on the costs and speed of different sorting systems. Interviews with ten representatives from six organizations provided information on current processes and figures that could help design an eol textile recycling system, as well as expert input on various aspects of the recycling. The organizations were a charity organization collecting funding by selling used textiles, two regional house-hold waste management companies, an environmental service company, the Finnish Solid Waste Association, and an agent selling equipment for recycled textile material handling and treatment. The interviewees worked as logistics managers or experts in textile recycling. The organizations were also involved in projects related to eol textile recycling and gave valuable insight into their experiences. The interviews were semi-structured, with prepared questions intended not only to obtain specific answers and figures, but also to lead open discussions on the organizations’ viewpoints and activities. Stakeholders related to eol textile recycling were also invited to a workshop. The 18 participants included representatives of a regional waste management company, two charity organizations that collect funding by selling used textiles, two universities, a research institute, an organization representing textile and fashion commerce, the Finnish Solid Waste Association, and four organizations that sort used textiles and/or use them as raw material for new products. The purpose of the workshop was to evaluate different scenarios designed for organizing eol textile recycling in Finland and to estimate the related figures. The first version of a process model for eol recycling was developed based on the literature research, then further elaborated based on the process observations, interviews and workshop. Theprocessmodelworkedasa basisfor the cost model, which was designed to give numerical values for different options and scenarios for organizing eol textile recycling in Finland and to respond to research questions. The cost model was built using activity-based costing (Cooper and Kaplan, 1991) and typical components of investment cost-profit analysis (Drury, 2015). The model consists of the following process phases: 1) Collection of eol textile material. The potential volumes of recyclable textile waste were based on figures from Statistics Finland. The organization of eol textile collection was planned together with experts from a regional 110 3 Methodology household waste management organization. To get cost figures related to textile collection, the authors interviewed the representatives of another regional household waste management organization, which was running an eol textile collection pilot. In addition, the clothes-collection manager of a charity organization shared insight on how they have organized their countrywide used-clothes collection in Finland. Different eol textile collection alternatives and the related costs were discussed in a workshop. 2) Sorting of eol textiles. Different alternatives for organizing the sorting of eol textiles were discussed in interviews and a workshop. The cost model enables comparison of the following alternatives: First, the collected textile material is sorted in the regional collection centers of regional household waste management organizations. Second, the textile material is perhaps quickly presorted in these centers, but most of it is transported to centralized sorting that deals with all the textile material collected in Finland. The cost model also enables comparison of the costs of manual, automation-assisted, and fully automated sorting with different parameters. 3) Treatment of sorted textiles. Based on previous studies related to the content of eol textile material, the model gives the amounts of different textile raw materials (e.g. cotton, polyester etc.). The model then offers different alternatives for treating the sorted material in such a way that it can be used as raw material for new products. In addition, the cost model calculates all the costs of the selected previous process phases to offer production costs per kilogram for usable textile raw material. The designed cost model was validated by presenting the cost model to Finnish eol textile related stakeholder organizations and asking for their expert feedback on the credibility of the figures. 111 Logistical Preconditions for Economical Reuse of End-of-life Textiles Therefore, by involving stakeholders such as raw material collectors, potential end-users and technology developers in joint development projects, the ecosystem has better possibilities to evolve. One essential precondition for ecosystem development is cost-effective logistics, which requires information about the costs and volumes of raw material when the recycling system is in production use. The developed cost model aims to contribute to this challenge. Based on the results of the study, it seems possible to produce recycled textile raw material at a reasonable cost. However, achieving this requires the latest automation technologiesand willingness on the part of consumers to spend some time separating their old textiles from other waste and taking them to collection containers. Once the ecosystem is in use, however, the processes involved will be further developed and the technology become cheaper. For an SCM point of view, the organization of sorting is a key issue. Based on the study, two-phased sorting was recommended as follows: First, presorting where usable clothes and harmful material are separated from other eol textile material. Second, actual sorting where different textile materials are separated based on their material into 10–20 different fractions. Even if this kind of sorting was seen as the most workable, it is not the most effective. The best alternative would be automated sorting without presorting. The main motivation for presorting is that the collected material probably includes harmful content, which should be separated out as early as possible. When eol textile is collected using containers in unmanned sorting stations, it is difficul to avoid this kind of harmful content. However,ifthecollectionsystemcouldbedifferent,forexamplebygettingapparel stores to organize the collection of used textile material, the amount of harmful content would probably remain minimal. If separating reusable textile becomes the only reason for presorting, it could be arranged to be more focused. Different collection methods and places most likely comprise different shares of reusable textiles. Presorting could then be focused on places where the share of reusable textiles is large. Where the amount and quality of reusable textiles are low, it is probably environmentally and ethically more sustainable to recycle these textiles as new raw material than to try to separate potentially reusable textiles and find users for those textiles in developing countries. The study presented here has the following limitations: First, the figures are based on approximations using the best available information, as to our knowledge large-scale eol textile collection and a recycling ecosystem have not yet been developed. In addition, especially the figures related to collection rates and the share of non-recyclable textiles are only estimations based on expert opinions, 118 5 Conclusions eol textile pilot tests and recycling of other types of material such as plastics. Therefore, the presented cost estimations have a fairly wide margin of error. Second, the results of the paper are not fully generalizable to other countries, as there are big differences within a single country. For example, people living in the countryside and in metropolitan areas use different types of clothes, which affects the composition and quantity of the collected material. Collection costs are also higher in sparsely populated communities. Because some figures of the cost model are based on experiences from local pilot experiments, the figures could have been different if the pilot has been carried out elsewhere. Therefore, before generalizing the results to other countries, the circumstances in Finland need to be considered first. Related to almost every other waste category, appropriate management of textile waste requires further division of different types of processes. Depending on the textile item it may end up for reuse, recycling or as energy waste. Usually the reverse logistics process for separately collected waste categories has two destinations: If the collected batch meets the standards, it is passed on to recycling; if not, it is sent to energy waste or for disposal depending on the material type. In contrast, the reverse logistics process for items like wooden pallets has two options: either the pallet will be eligible for reuse (some fixing can be done if needed) or it will become energy waste. Thus the conducted research related to eol textile processes can offer novel viewpoints for diversifying reverse processes of other waste and recyclable item categories. Acknowledgments The authors want to thank the partners of ’Telaketju - The chain of sorting and exploitation of textile waste’ project for giving essential material for this paper. 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