Out from Hiding

Industrial and commercial waste generation predates Biblical times, but the management of waste continues to confuse businesses looking for pockets of savings.

Contrary to some of my fellow members’ belief at the Institute of Scrap Recycling Industries Inc., our company professes to our clients that any material generated as part of a business enterprise that is not sold as the primary product of that enterprise should be considered a waste product.

As such, this waste product initially carries the financial burden to the enterprise in the form of a logistical expense.

The mere movement of this waste product from the point of generation to a collection point creates a negative economic impact to the enterprise.

Factories, stores, offices and warehouses all generate waste in some form or another. The proper sorting of this material and ultimate processing may lessen the negative impact of this waste and potentially create a product with a positive economic impact.

These "backdoor products" tend to confuse the operators of these enterprises because management’s primary task is to generate revenue and profits from their "front-door products."

By way of example, look at the lowly wastebasket next to your desk. If you fill it with paper, newspapers, magazines, flyers, unwanted mail, used beverage containers and the occasional banana peel or two, the basket may reach capacity by noon.

If you step into the container to compact the material, you may increase the volume of waste you place into that container and, by doing so, you will decrease the occurrence (negative economic impact) of emptying the wastebasket.

Let’s take this scenario one step further to an actual case of one of our current clients.

This company imports many goods in large wooden packing crates and some in steel wire containers. Its procedure for processing these crates and containers involved two men with sledgehammers and metal grinders. After several well placed swings, the flattened waste was placed into a 40-cubic-yard roll-off container for wood and a separate 40-cubic-yard roll-off container for metal.

Its conventional wisdom was appropriate: Decrease the volume of these containers to increase the capacity in the larger container. Unfortunately, the negative economic impact of processing these backdoor products was unseen by management since its core competency was moving products out their front door.

Our recommendation was to install a 6-cubic-yard, pre-crusher compactor with a 40-cubic-yard receiver box. One worker was able to place three wooden boxes into the pre-crusher at once, press a button then walk away to engage another task. When the full receiver box was removed to be emptied, the metal wire containers were placed into the pre-crusher for compacting then ultimately placed into a separate roll-off container for metals.

This same client also collected old corrugated containers (OCC), baling them for recycling. The OCC generated a positive economic impact, but the vendor was hard to contact and payment took several calls to collect (negative economic impact).

Our company offered this client a comprehensive program whereby they decreased from three vendors (waste hauler, scrap dealer, paper recycler) to one, and they now receive one monthly statement showing revenue and expenses.

An added bonus to our client is that the cost of producing two checks per month to the waste hauler are eliminated since the positive economic impact is greater then the negative impact of equipment rental, hauling expense, disposal expense and management fees. By partnering with our company, our client benefits from waste and recycling expertise we possess since all transactions on our side are completely transparent.

Recently, we met with a large, multi-location commercial operation. The company formed a waste team to focus on saving money through waste reduction, recycling and improving efficiencies.

Although the company generated a great deal of waste and recyclables, it lacked a thorough understanding of this segment of its operation. After our presentation, the company realized it could quickly bring real dollars to the bottom line by including us as a member of its team.

I like to think Donald Trump paraphrases my CPA father when advising apprentices, "surround yourself with the best partners."

Select waste and recycling vendors who bring value to your organization and can be trusted to become part of the team. When an enterprise decides to form a waste and recycling team, it’s important to include someone from operations and accounting as well as your waste hauler and recycler.

If management wants to measure the waste and recycling portion of the enterprise, there are several companies in North America that provide audit services. It is absolutely crucial for everyone to accept this program for it to be beneficial.

Resourcefulness can be a hallmark of the waste and recycling management industry. Selecting the right partner or partners to manage your "backdoor products" in an efficient, economic, and environmentally responsible manner is crucial.

The author is president of Scrap & Waste Inc., Louisville, Ky., and can be contacted at mfriedman@scrapandwaste.com.