toring, high quality maintenance, real time status reports, but by doing this all enables Returpack to function as the integrator between government policy and business collaboration for keeping the
aluminum recycling circulating. Since Returpack business model is seamlessly intertwined with RIRS, and also the objective of our analysis is stimulated by the IS implications, we will symbolize RIRS with Returpack itself, as it is seen in Figure 2.
RVM and IS BREWERY Share on Tax Refund Ft GOVERNMENT
Data Collection and Reporting on Can Recycling
Real Time Communication And Data Analysis
Figure 2. The Core of the Returpack Recycle Model The technology configuration has enabled Returpack
to create a contractual agreement with the three leading breweries (Borsodi, Dreher and Heineken) to orchestrate a fully functioning recycling circulation where both the upstream collection process (on the left side of Figure 2.) is motivated and the recycle of cans or re-circulating of aluminum is also ensured in the downstream part (shown on the left side of Figure 3.). This configuration, henceforth, provides regular reports on can recycling both for the breweries and for the NWA – that is to the Hungarian government. On the basis of these reports, which contain the number of collected and recycled cans of each brewery separately, eco-tax refunds are paid to each of the partners and this revenue is shared with Re- turpack as the main source of its income. The in- formation flow is indicated with dotted, the money flow with dashed, and the aluminum can flow with continuous lines.
Conceptually, the system was tested in 2009 using 2010 as a pilot run. The three breweries invested in 24 RVMs and Returpack tested the collection, op- eration and recycling of cans. The results were very promising: in the period from March to December 2010 100.000 cans/month were collected totaling up to 28,4 tons of aluminum. Also the clearinghouse concept was working: based on the RVMs´ special can recognition feature and the RIRS reporting capability the three breweries and the government authority had received timely and accurate numbers of cans collected from each particular manufacturer, so product tax refund could be calculated and filed to the government. One important spill-over effect of the successful pilot run was the official acceptance of Returpack as trustworthy clearing house on aluminum recycling which has become beneficial both for the breweries (they did not have to report individually on recycling efficiency) and also for the
Case Study of ICT Innovation
authorities (who suddenly started to receive impres- sive numbers of reused aluminum tonnage). This special inter organizational B2G operation started to serve as an obligatory passage point creating an interpretation between government policy and busi- ness model operation. The implications of the Re- turpack model are described in the next section by opening up the upstream and downstream “clouds” in Figure 2. This also further refines the business model and the role of ICT innovation.
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During the pilot phase, quickly turned out that easy access and hassle free, convenient approach to the machines was critical: they had to be installed in places of natural customer traffic. This had been the point when retailer chains came into the blue print of the business model. According to legislation all retailers operating in a larger area than 200 square meters are obliged to run bottle return services, if they are selling refundable bottle products. The retailers have not been allowed to build in any margins into this service, as a matter of fact, they could not have even enforce the customers to re- purchase in the stores for the returned value.
Consequently, any kind of return service has been a mandatory chore and a potential managerial prob- lem issue for retail management. Contrast to this, Returpack, could offer a free, clean and environ- mentally attractive solution for the retailers by ba- sically appearing as an outsourcer of their re- turn-business. Returpack only required place (size of vending machine) and regular electrical current. In return, however, it offered regular maintenance, timely vacating, and extra revenue from the collec- tion. In order to make this work, Returpack had to extended the core of the clearing-house model, and initiate further collaborations and functionalities in the upstream and downstream processes of alu- minum can recycling. All of these functions were enabled by the technology features of the RVMs and the communication and data processing capa- bilities of RIRS.
Figure 3. shows the key elements of the Retur- pack model extension both on the upstream (re- turning used cans) and the downstream (vacating RVMs and organizing the logistics of collection) phase. First we examine the upstream, then the downstream part this model extension and their implications.