Always room for improvement

As an industry veteran, Daniel Jacome has seen just about every type of scrapyard imaginable. From small, local yards to large-scale operations, he’s made a career out of traveling site to site, helping operators streamline their processes.

Jacome worked in the engineering department of Australia-based Sims Ltd. for 10 years as an asset manager covering North America. He was responsible for capital expenditure deployment on heavy equipment and involved in continuous operational improvement programs.

“I had a lot of mentors … [who] really helped me understand the operations themselves,” he says. “We spent time interviewing people within the operations [of a scrapyard] at all levels, and the idea was to get an understanding of what they did, how they did it, what materials they handle and how they handle it. … Our primary focus was on streamlining the operation, making them efficient with regard to how they operate and promoting better safety practices [as well as] promoting profitability.”

In his current role as business optimization consultant at Stanley, North Carolina-based Sennebogen LLC, the U.S. subsidiary of Germany-based Sennebogen Maschinenfabrik GmbH, a position he’s held for about three years, Jacome provides consulting services, or what he describes as “a second set of eyes” for customers and would-be customers considering how to streamline their yards.

It’s an undertaking that can be overwhelming—and often expensive—but, Jacome says, with the right mindset and the right partner, it’s an effort that can boost efficiency, safety and profitability.

“Business optimization is a continuous effort,” he says. “It’s [relative] to what stage you are in your business—you can be a startup or a fully mature business, there’s always room to improve.”

Assessing a business

Jacome says there’s no one blueprint for optimizing a site, as each location is unique, which makes the first steps crucial in determining how to best optimize a scrapyard.

“The placement of one yard could be in the middle of a city and another could be in a rural area,” he says. “The layout could be the same, but the problems can be different.”

Jacome uses the “Lean Six Sigma” approach, a management concept involving Lean, which focuses on eliminating waste, and Six Sigma, which focuses on improving process output quality by identifying and eliminating causes of errors and minimizing variability. Lean Six Sigma uses the define, measure, analyze, improve and control (DMAIC) phases to help identify the root cause of inefficiencies and works within any process with a large amount of data or measurable characteristics.

When first visiting a site, Jacome sets out to define what a customer does and how they do it. For example, is the operation set up to simply buy and sell material as-is? Is there any on-site processing or shredding? What types of commodities does the site generating?

“The idea is to have a definitive set of questions and an approach, but you have to tailor it individually per business,” he says. “Once you define what your problem summary is, then you want to take that measure-and-analyze approach.”

That approach involves identifying any potential opportunities a business is missing out on and determining the “ideal future state” of the business over the next one to five years. He’ll ask operators what they’re hoping to accomplish and what they view as inefficiencies in their business model or on-site operations.

Jacome prefers to segment a business into departments to further identify problem areas.

“You’re going to have your maintenance department, your shredder department, your ferrous department and your nonferrous department,” Jacome says. “Some of these segments feed into another, and you have to find a correlation between the bottlenecks and eventually take steps toward improving those processes.”

An initial conversation helps identify bottlenecks, and Jacome says it usually “opens the door for everything else.” But the challenge, he says, is that the footprint is forever changing.

“For a whole week, you might get 30 trucks, and they’re all typically the same—they’re going to dump material, and you’re going to stockpile it,” he continues. “Then you might get someone who has an oil tanker they need offloaded in your yard, and obviously the job is then to cut that thing into pieces, but now you’ve got 500 square feet of space being taken up by a large piece.

“How do you handle all this as well as maintaining your footprint in an efficient manner, where you can handle traffic flow seamlessly through your yard without interrupting inbound and outbound traffic?”

Mismanaged traffic flow can lead to other issues, Jacome says, and the effects can snowball quickly.

“[Say a yard] has trucks lined up for over an hour, for example, or they can’t make that ship loading in three days, so they face demurrage charges on day four and day five, all because there was a machine down or they didn’t have the resources available, and everything just happened all at once,” he says.

All this questioning happens before Jacome or one of his colleagues steps foot on a site, but that’s part of the plan. That transparency helps build relationships with potential customers so that when a consultant does arrive on-site, the work can begin.

“That’s the beauty of it,” Jacome says. “The transparency and the ability for us to come in and help you put a plan together. … By the time I get to a facility, the meeting is already set, and it’s incumbent upon both of us to put our heads together.”

Getting to work

Because of the uniqueness of each site and each project, cost and timelines can vary. Some optimization efforts include yard layout changes, which might require building a new road, while some could need to address material placement, which is a simpler matter and requires less time and money. Right-sizing existing equipment or adding new machines also comes into play, Jacome says.

“Depending on the size of the project and improvement, that will determine the timeline,” he says. “Usually, the ones that take the longest are when they’re trying to implement a whole new facility or new processing stream.”

One of the biggest hang-ups in pursuing an optimization project, Jacome says, is the capital investment required. This makes the initial assessment even more crucial as it can help an operator prioritize how to best deploy that capital.

“Part of the problem is being able to determine that priority, putting that vision and those numbers together,” he says.

Jacome tries to make that part of the project easier, too. He assists with cost-per-ton analysis and future project planning, trying to help operators prioritize accordingly and get them more comfortable with making those large capital investments.

“We say, ‘What’s a priority today? What can we do today?’” he says. “Part of my goal is usually to bring that comfort level, especially when it comes to capital investments. They all tend to have an ROI [return on investment] … so you’re going to have some things that require more capital but have a pretty decent ROI. If you confront it and you can stomach the risk, then do it.

“Try to focus on what’s going on to give you your highest profitability while maintaining a safe working environment.”

Confronting major changes can be overwhelming, leaving operators feeling defeated. One way Jacome addresses that is by encouraging operators to start with smaller tasks, or “the low-hanging fruit,” so they can build confidence in the overall vision and not feel as apprehensive about making those capital investments.

“It’s important to outline your strengths, too,” he says. “When you tackle the low-hanging fruit, it tends to build that motivation upfront, and you want that. We’re all humans at the end of the day, and we’re dealing with folks who need motivation.

“If you start with the hardest task, because they take longer and they’re harder to do, you become less motivated to do all the little things that have just piled on top of that. It’s important to start with the little things, take the small wins because those provide the motivation you need.”

A necessary partnership

Jacome encourages operators to keep an open mind when it comes to their practices and accept the need for change.

“You don’t make any changes without wanting to make a change,” he says.

He explains one of the benefits of Sennebogen’s optimization consulting is that a customer can walk away from that experience with deeper industry knowledge, and the relationship built between an operator and a consultant can reap rewards long after a project is completed.

“We get the opportunity to learn about [the customer] and collect information that not only helps them in the future if we put a good plan together but helps build a relationship—a long-term one,” Jacome says.

The idea is that operators will continue to look for ways to improve their sites after working with an optimization consultant, and Jacome views any initial project as the first in an ongoing service.

“I don’t come out and spend seven hours with you, provide a summary and a spreadsheet and then forget about you,” he says. “The main goal is to maintain an open line of communication, especially if we come up with a set of project deliverables and some timelines associated with those deliverables.”

Why does it matter?

Jacome stresses the importance of analyzing operations and not taking shortcuts, even if it means starting small.

“You can miss several good opportunities if you’re not thoroughly analyzing your business for the sake of improving it,” he says. “Taking shortcuts instead of improvements can often hinder your ROI projections and overall benefits.”

The best approach, Jacome says, is knowing your strengths and weaknesses and identifying a plan accordingly.

“You’ve got to start somewhere,” he says. “Know what you’re doing, know who you are [and] know who you service.”

One of the best places to start, Jacome says, is by understanding your business’ reputation as understanding what customers and colleagues are saying can reveal opportunities for improvement.

“It’s the little things you often don’t think of—what are people saying about you?” he says. “If you have a bad reputation and you start to solve it, you can generate more business. So, start there.”

The author is managing editor of Recycling Today and can be reached at mmcnees@gie.net.