What’s Your Environmental Spend Profile?

- March 28, 2012 12:03 PM
Categories: CSR, Spend Management |

Spend Matters welcomes a guest post from Kenneth Moberly, Co-Owner of Green Group LLC.

As the co-owner of a sustainability consulting firm, Green Group LLC, my job takes me to a wide range of manufacturing and waste-producing facilities. In the process of examining companies’ current waste solutions and working with them to improve sustainability and cut costs, we usually see our customers fit three general profiles. Largely as a result of the recent recession, companies looked for ways to thrift and contract without impacting production, leaving environmental staff and services to take the hit. Read on to see which profile you fit and what you can do to improve your bottom line.

“Houston, We Have a Problem”: Winging It
Company X realizes they have a typical waste problem: waste accumulates until there’s nowhere left to stash it. When it hinders production, management, or worst case, regulators, notice. For Company X, the item of concern is empty drums — plastic or steel 55-gallon drums in all shapes and sizes.

Busy with production and blissfully ignorant of the myriad of U.S. federal regulations regarding disposal and recycling requirements, Company X is quite proud of their solution:

  • Utilize facility labor to cut the drums in quarters and mix with plant trash
  • Have a cousin of one of the maintenance employees pick up the steel drums with his trailer and take them, as is, to a local scrap yard

Company X’s solution fails on several levels: most importantly, safety and environmental exposure. More pertinent to this blog, however, is the failure in cost evaluation. Without a dedicated staff, Company X thinks they are taking a cost-effective shortcut, when in reality, the liability exposure and drain on their resources is massive. Using a proper drum reconditioning supplier has minimal cost AND would comply with federal regulations. But who at Company X has time to research that?

Too Many Hats: Scrambling to Keep Up with the Status Quo
Company Y is ahead of Company X in that they had environmental staff to put a process in place. However, like many companies, the key word is “had.” Unfortunately, knowledge of the local supplier marketplace and environmental rules and regulations were lost along with the headcount — but their duties remained. As is today’s new normal, other staff (already wearing three or four hats) found a new green one balancing on their head.

Company Y knows its waste streams, and already has long-term service provider relationships. However, waste volumes can change due to increases or decreases in production, or composition changes from adding a new product line. Service providers may be happy to maintain the status quo. The waste hauler continues to pick up half-full compactor boxes at the same service intervals as when Company Y’s production levels were doubled. Dependence on the expertise of suppliers who own landfills, treatment and disposal facilities and recycling centers means higher costs for you and higher profits for them as you learn the process. Company Y’s remaining employees are so busy, they’re just relieved the waste is getting picked up on time. It’s one less headache on their list.

Don’t Mess with Success: We’ve Always Done It This Way
Even a fully staffed facility can be the victim of status quo. Company Z’s environmental expertise is intact, but comfortable relationships and small price increases have made both sides complacent. Their wastewater treatment chemical provider has been handling the same problem in the same way for a long time — and sending the same old invoice — but there may be a tweak in the process upstream or a new technology that could fix it once and for all. Company Z has the dedicated staff, long-term suppliers, and a solid handle on their waste and their process, but they are stuck in a spend rut.

Whether you’re winging it, too busy to deal with your waste, or stuck in a spend rut, there are some simple ways to increase your sustainability while decreasing costs:

Continuing Education: Get responsible staff involved with industry and recycling workgroups on social networks like LinkedIn. These are great, informal ways to learn best practices and hear about new technologies.

Memberships: Company membership in industry recycling groups, such as the Institute of Scrap Recycling Industries, or groups specific to your product, such as the Polyurethane Foam Association (PFA) will provide you with regular newsletters, conferences, and access to experts in the industry.

Trade Shows: Encourage staff to attend trade shows covering the latest technology and service offerings for your main manufacturing by-products.

Outsourcing: Outside service providers, sometimes referred to as Total Waste Management (TWM) contractors, can supplement your existing staff or implement a program from scratch. This is a good approach for large volume generators who will also get the added benefit of vendor consolidation. A word of caution: most TWM contractors are part of or affiliated with an asset-based organization, which means they may be directing your waste to their landfill or hazardous waste disposal facility regardless of price or sustainability.

Non-Asset Based Category Expert: A third-party opinion and a broad, current knowledge of waste and recycling spend options can dramatically improve your process and your bottom line. Working with an expert who doesn’t own landfills, disposal facilities or have proprietary technologies to sell means you will get unbiased guidance. These category experts can analyze your current processes and make recommendations; they can also implement and manage those recommendations on a more long-term basis.

So where are you with your environmental spend? Are you Company X, Y, or Z, or somewhere in between? No matter where your company is on the spend spectrum, implementing one or more of these suggestions can only help your bottom line.

- Kenneth Moberly, Co-Owner, Green Group LLC

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