For most businesses, waste expenses are often viewed as a low priority, simply because the waste expense category is typically the smallest when compared to other utility or property-related expenses.
With greater pressure to reduce costs in today’s economy, businesses looking to drive additional savings should not overlook this critical category. While waste expenses do not typically account for a substantial percentage of operational expenses, the potential for waste savings opportunities as a percentage of spend can be very significant. And, for companies looking to improve their environmental performance, waste is an important element of any serious sustainability program.
One of the ways organizations can reduce waste expenses is by making sure the containers for waste and recycling are the right size for the amount of waste produced. For many, the size of the waste or cardboard containers has never been considered – they are what you’ve been provided by your waste vendor and what you have always used. When setting up waste services, many businesses select the bin size based on an industry or chain-average, rather than site-specific factors such as sales or transaction count. This can be a big source of inefficiency. As time goes by these inefficiencies often grow, as few managers notice when a dumpster leaves their site half-empty, but are very likely to notice when it is overflowing, at which point a request for additional pick-up is added. Over time, these service levels grow to be in great excess of actual need.
Consider this example of one retailer who reduced their total waste cost by 15% by right sizing their waste and recycling services. Starting with an evaluation of current waste data, (size of current waste containers – by site, week, and price) a capacity baseline was created. Through this effort, “we very quickly learned we had a lot of unused container capacity, which translated into quick, painless waste expense savings,” remarked the retailer. Capacity levels were then adjusted by changing the waste container size, the frequency of pick-ups or a combination of the two. “It was one of the few property expense areas where we could achieve savings without requiring capital investments or imposing a lower service standard, which could adversely affect the “look and feel” of our stores.”
Organizations looking to go through the waste right-sizing process should first consider what contributes most significantly to their waste volume. For example, in the retail industry, this metric is often sales. By creating a baseline service level (i.e. “x” cubic yards of trash service and “y” cubic yard of recycling per $1,000 in weekly sales), a target waste service volume for each site can be determined. All sites above this level then become targets for waste right-sizing.
Finally, it is important to keep in mind that this is not a one-time effort. Instead, this should be a regular exercise that is evaluated on an ongoing basis. External factors that affect each site’s actual waste volume can change at any time. Whether it be a neighboring business using your container as an overflow, cardboard boxes that haven’t been broken down, or other external factors, such as:
- Seasonality of your business,
- Special promotions,
- Opening and closing of sites, or
- Major changes in inventory.
Each of these factors has a role in the amount of waste and recycling generated in a given period. For example, the holiday season can represent anywhere between 25-40% of annual sales for some retailers. This being the case, one could assume that they also generate corresponding amounts of waste during this period, indicative of a serious spike in trash over this timeframe.
Organizations must apply due diligence to vet the apparent right sizing opportunities before service adjustments are actually made. Once confirmed, these opportunities typically bring significant waste savings ranging from 10 percent to upwards of 20 percent.
Finally, when looking for ways to cut waste costs, remember that the savings found through right sizing can be significant, but are only one way you can evaluate your waste for cost savings