Eco-Center makes Heraeus supply chain more sustainable

The production and supply of copper and aluminum bonding wires also generates reducible costs and, above all, packaging waste. Therefore, Heraeus Electronics in Malaysia introduced an environmental management system in 2020 to reuse used materials and make the supply chain more sustainable. In doing so, the Global Business Unit proactively approached its customers to generate benefits for both sides.

Under the umbrella of Heraeus Electronics, the Heraeus Materials business in Malaysia provides copper and aluminum bonding wires of reliable quality to customers in the automotive or semiconductor industries worldwide. Each bonding wire used by Heraeus customers to manufacture their products is wound onto aluminum spools of various sizes for transportation. The spools arecarefully packed – usually in cardboard boxes, foam or vacuum bags, and all kinds of plastic wrappings to ensure that the goods reach their destination without damage. Until recently, this resulted not only in all kinds of costs, of which the spools accounted for at least 50 percent, but also in a lot of waste. Old spools were disposed of or remanufactured by third-party suppliers according to Heraeus specifications. Heraeus Electronics therefore decided to set up its own recycling and environmental management system. After all, as a supplier, the company also sees itself obligated to handle material resources responsibly.

Eco-Center protects the environment and reduces material costs

Circularity
Project team: Wai Yee Wong, Head of Supply Chain, and Juneina Mohsin, EHS Manager

In Malaysia, a so-called Eco-Center was built and completed in 2020. The aim: to conserve resources in the interests of the environment and at the same time reduce process and material costs – without neglecting customer needs or disrupting the supply chain. The Eco-Center takes three approaches to achieve this: Reduce, Reuse and Recycle (3R). It was implemented by the team led by Wai Yee Wong, Head of Supply Chain Malaysia. She and her team have initiated the following specific measures:

  • Reduce: Together with customers, the wire length of the spools was extended and standardized. The spools now include more wire, which reduced spool consumption by as much as two percent.
  • Reuse: In cooperation with the internal teams for supply chain, procurement, sales, spool suppliers as well as other logistics service providers, a take-back program for the spools was launched. Customers return used spools to Heraeus. In average, ten percent of these return spools need to refurbish by third party based on Heraeus’s specification before recycling.
  • Recycle: Wong arranged for an in-house team to be set up to inspect, clean and properly recycle spools that are returned by customers. This process is not only sustainable, it also reduces logistics by 50 percent.

To implement the measures, Wong didn't need much convincing. "We approached our procurement and sales colleagues and told them about our plan. They were on fire right away and helped us get customers to follow along. After all, the concept only works if the spools are returned to us after use," explains Wong. With success as team member and EHS Manager Malaysia Junaina Mohsin explains: "About 75 percent of the spools are returned to us for reuse." Currently, the Eco-Center processes more than 3,800 spools per day. Of these, about 3,000 pieces are cleaned only, mainly from customer returns. In total, nearly two million spools have been processed and recycled since the start of the Eco-Center. "This saved around 350 kilograms of raw aluminum – and costs in the mid six-figure range – for customers as well," adds Mohsin.

For the future, Wong and Mohsin plan to make other packaging materials, such as plastic boxes or the cartons, recyclable as well: "Our supply chain is already much more environmentally friendly, and I am proud of what we have achieved so far. But I know there's more to come. That's what we're working on," Wong says happily.