Editor's Column

Trendspotting

Multi-national corporations can jump on trends for reasons other than bottom-line profitability, but for companies that wish to serve their shareholders well, that remains the best reason.

When it comes to recycling, there have almost certainly been times when large corporations have promoted the practice for public relations or image reasons over balance sheet reasons.

Increasingly, though, the balance sheet is pointing the way toward the efficient handling of scrap materials generated at production facilities, warehouses, offices and retail locations.

Several of the world’s largest and most profitable corporations have scrutinized their scrap and waste generating and handling processes very carefully lately, and made noteworthy changes for balance sheet reasons.

Wal-Mart is among the most visible of such corporations. A skeptic might question whether its new willingness to take part in more recycling programs (often in coordination with schools) might be image over substance, but companies that handle Wal-Mart’s solid waste and recycling accounts know better.

Wal-Mart has been working with them to figure out how to make sure more material heads into its baler and to recycling plants versus into its garbage bin or compactor. With higher global commodity prices, the reason is clear to see: Wal-Mart would rather be paid for excess materials rather than paying a garbage hauler to take them away.

The phenomenon is by no means restricted to Wal-Mart, however. General Motors is among the large-scale manufacturers that have been paying much closer attention to their scrap flows, with one online journalist recently reporting how the company has hired a highly-paid "financial whiz" to track the values of metals it both purchases and generates as scrap and to closely monitor the sale prices received for scrap.

Small companies certainly don’t enjoy the bargaining power of Wal-Mart or the ability to hire a highly-paid "financial whiz" to track global metals markets.

But they can make the conscious decision to designate someone in their ranks to find out a little bit more about recycling versus waste options to make sure that good bottom line decisions are being made.

Fabrication shops and other manufacturers are keenly aware that they are paying more for metals, plastics, fuel and other raw materials.

The markets for these materials remain largely based on supply and demand, meaning there is a very real demand for metal or plastic that can be re-melted or re-formed into new materials.

The prolonged boom in commodity prices has been labeled by some as ushering in an era of resource scarcity. If such an era has indeed dawned, there is no time like the present to make sure one’s scrap materials are being treated like the resources they are.