Ignoring waste costs money

Many companies think that they’re already working hard to reduce waste, primarily for environmental reasons. But in reality a lot of waste – and hence money – is still being thrown away.

Generally speaking, between 30% and 60% of industrial waste is currently sorted and separated. That could easily be increased to more than 90%. British research reveals that waste costs are equivalent to between 1% and 3% of turnover, and in some cases as much as 4.5%, which takes a sizable chunk out of the profits. It’s time to take a critical look at the waste bin.

Full?

We know from experience that, when asked, companies often don’t know how much their waste costs them. They have to dig deep into their financial accounts to find out, and they’re still left unsure of the costs of waste collection and disposal. The familiar 1,100 litre bins (every manufacturing company has a few) each cost EUR1,200 annually if they are emptied once a week – even if there’s nothing in them. And that immediately highlights a sore point: waste bins will be emptied irrespective of whether there is anything in them. Companies often have too many bins because they are afraid of producing so much waste during manufacturing peaks that they will have nowhere to put it. Simply making a note of how full the bins are over a period of several months will give you insight into how many bins are actually needed and hence enable your company to make the first cost saving.

Trial

For the second cost saving, you can conduct a trial within your company. Many entrepreneurs find this a useful exercise: it’s amazing what you find in the bins sometimes. The trial entails installing separate bins for different types of waste, such as wood, food, plastics, paper, etc., in areas where employees work or pass by. You then weigh all the different types of waste on a weekly or monthly basis and subsequently approach a number of waste management companies for quotes based on those figures. Waste management companies are often specialised in collecting and disposing of a certain kind of waste so their prices can vary widely. Armed with the right quote, you can turn the best-case scenario into a permanent set-up.

Waste and purchasing

This trial also reveals what is being wasted: food that has passed its best-before date, paper printed on one side only, folders, large off-cuts, pallets, used packaging, etc. This can inspire managers to re-evaluate the business processes, to increase people’s awareness of which materials they are using and how, and to reach agreements with employees about what they throw away. Every material that leaves the company as ‘waste’ has also been purchased once upon a time. The purchasing department is usually responsible for bin hire and hence also pays for the disposal of previously purchased material. Reducing waste generates much bigger savings than recycling it: 10 to 20 times as much. Therefore, it’s wise to work with the purchasing department to identify the materials which can be ordered less frequently or in smaller quantities.

‘Reducing waste generates much bigger savings than recycling it'

Monetising waste

Stock checks can also be revealing. Talking to suppliers about packaging can result in a reduction of packaging materials, or even in used packaging being collected as part of the service. The supplier might bulk up the material, and sometimes a third party that can find a good use for the material may be prepared to buy it. Furthermore, it is worth checking what the going rate is for your ‘waste’. Nowadays, there is money to be made from second-hand packaging such as wooden and plastic pallets or plastics. Take a look at www.polyring.nl, a TU Delft project, to see some of the possible sales channels.
The Dutch province of North Holland has asked TU Delft to help local companies reduce the costs of their commercial waste. The website www.afvalkring.nl offers companies in North Holland support with internal waste management and monetising their waste materials.

Further actions

Some waste issues can be very complex. Some examples include optimising cutting techniques to utilise as much material as possible, preparing an overview of flows of materials in the chain, or adapting the design. Universities welcome such issues as topics for student assignments. In certain cases, it is worthwhile enlisting the help of researchers. Universities of applied sciences and technical universities are increasingly devising innovative and practically oriented solutions for businesses. With any questions about the opportunities, see for example the Knowledge Platform for Sustainable Resource Management (www.duurzaamgrondstoffenbeheer.nl).

Examples

In most cases, companies are billed based on the number of bins they hire, or in other words based on the volume of their waste. Expanded polystyrene (EPS), which is used as packaging in the fish sector for instance, is a very expensive material to collect or dispose of. It is possible to purchase compactors which reduce the volume of used packaging material by as much as 50 times. Such machines often offer a rapid return on investment. Similar compactors are available for cardboard boxes and plastics or films.

Within many food manufacturing companies, material which lands on the floor is sold to the animal feed sector. It is possible to introduce countermeasures by evaluating the production process step by step and identifying the stages at which the most material ends up on the floor. For example, a bakery company simply fitted stainless-steel floor plates at critical points along the production line so that any material falling off the conveyor could be returned, clean, to the manufacturing process.

In another example, a plastics company had always caught its start-up losses in ‘octabins’ (large cardboard boxes) which were then collected along with the other waste. The volumes of plastics were often two cubic metres, approx. 0.5 to 1 ton. Employees were not sure how to go about finding plastic recycling companies and also did not realise how high the waste costs were. Following a cost check the managers decided to search for a recycling company after all. After just 10 minutes of surfing the internet, they had achieved an annual saving of at least EUR2,000.

Tips

• Conduct an internet search for your waste product or material, also using synonyms (e.g. search for ‘wood shavings’ as well as the synonym ‘sawdust’). Find out in which sectors your waste material is used and contact relevant companies.
• Try to think outside of the box in terms of your market and your approach. If your company is used to ‘thinking big’, for example, it can be easy to overlook things which could be used on a smaller scale. For instance, a large company which receives deliveries of molasses in 200-litre vats subsequently throws the vats away, yet after rinsing they could be sold to dealers – after all, as a by-product of the sugar refining processes, molasses are chemically harmless. There is also a lucrative second-hand market for vats as rain barrels. Another example: a produce auction selling withdrawn fruit and vegetables as animal feed to a local stud farm.
• Consider further processing. Just a couple of machines could transform your waste flows into a saleable product. For example, it is possible to buy equipment which transforms cardboard into cushioning which can be used as internal packaging material and padding for all kinds of products.

www.afvalkring.nl