This blog is the third in a series on the First Mile Problem and how to solve it with a reverse supply chain. The first article explains why this model is a solution to today’s reusable goods challenge, and the second examines its feasibility and potential operational challenges.
A reverse supply chain for reusable goods is a viable solution to keep goods out of the landfill, but what does resolving the First Mile Problem look like in practice? Working with graduate students from Portland State University’s School of Business, we set out to explore its feasibility, by studying the real-world context of existing collection systems for trash and recycling in a specific Portland, Oregon neighborhood.
For our study, we settled on Sellwood, a Portland neighborhood with a population of 18,000 homes in about five square miles, and an urban density that allows truck drivers to move efficiently between pickup locations, and collect reusable goods along the way.
Our team simulated both a curbside pickup model and a neighborhood drop-off model in Sellwood, based on a set of assumptions as outlined in the previous blog post. A curbside model picks up usable goods at the end of driveways and from apartment buildings; a neighborhood model has collection points every few blocks.
The curbside pickup model
The curbside pickup model would make reusable goods donations ultra-convenient for donors. In Sellwood, it would involve:
- Plastic, corrugated bins about 3 cubic feet in size for each residence, like existing blue bins for recycling and grey bins for landfill waste.
- A pickup frequency of every other week pickup for each residence.
- Two 20-ft. trucks, with a 90 mile route each day.
For Sellwood, we found with this model that we could expect to collect about 1.1 million cubic feet of goods annually, at a cost of just 25 cents per pound. Ongoing annual operations would cost just under $300,000, with a livable wage, and startup costs would be $125,000.
The neighborhood drop-off model
The neighborhood drop-off model would have larger, multisite bins placed farther apart within a neighborhood, such as at the end of a block or near commercial areas, with larger quantities collected at each location. In this model:
- Pick up every other day by a truck, along a prefixed route.
- One 17-ft. truck with a 15 mile-per-day route, picking up from 15 donation bins.
This neighborhood drop-off model can collect about 300,000 cubic feet of reusable goods annually, at a cost of just 17 cents per pound, and importantly, hits a price point that isn’t prohibitive. Annual operating costs are about $50,000 after a $50,000 startup cost.
The neighborhood drop-off model might yield less volume, but it avoids a sizable amount of landfill, and scales well from neighborhood-to-neighborhood. As we doubled our number of collection points, from 15 to 30, our costs only increased by 20%, as we were able to trade up to larger commercial trucks but not much other infrastructure.
Next step: A First Mile pilot program
Both models check out operationally, and are a straightforward way to divert large quantities of goods from the landfill and put them in the hands of those who need them. A few questions remain about a program’s success, variables we modeled but would want to test and baseline, including:
- How full would the bins be?
- Would any sorting be needed after collection?
- Is there a municipality, organization, or for-profit enterprise that has a specific or general need for reusable goods?
Each of these questions could be answered with a pilot. It’s the next step to see how the neighborhood or curbside model would work in real life. Ultimately, we’ve shown that it is operationally feasible and relatively inexpensive to set up a reverse supply chain for reusable goods, and establish a new channel in this area. It’s possible to divert thousands to millions of pounds of reusable goods from a city’s landfills and make those goods accessible for organizations and people who could use them.
If you’d like to learn more about regional reverse supply chains, how they could be implemented in Portland or a further field, and how they stand to drive city-wide sustainability, please get in touch at gittler@pdx.edu.
Adam Gittler is a Principal Consultant, with 25 years of experience in global Supply Chain operations and Continuous Improvement roles, and an adjunct professor in the Portland State U. Graduate Supply Chain Management program. His previous work includes director-level roles in lean six sigma, quality, international operations, and regulatory affairs, with expatriate assignments in Shanghai, Tokyo, Hong Kong and Malaysia.
He holds masters and bachelors degrees in engineering and operations, and a UC-Berkeley MBA, with experience in multiple industries including apparel, medical device CFR 820, food and hazard analysis critical control points, energy, public transit and automotive.
Portland State University Graduate Business Blog 