Case Study: 24 Hour Fitness

Trimming Waste Costs Through an Effective Recycling Program

WASTE STREAM MANAGEMENT: FROM MANDATE TO MONEY-SAVER

When the state of California passed AB 341—the Mandatory Commercial Recycling Law—in 2011, the implications were significant for business operators. The law requires any business that generates four or more cubic yards of waste per week to implement a recycling program. Some companies considered this a costly incursion. Procurement of recycling bins, training and awareness programs, signage, and the possibility of changes in trash pickup frequency contributed to the gripes of many.

But James Taylor isn’t complaining.

Taylor is a sourcing manager at 24 Hour Fitness, a leading health club and industry pioneer serving nearly 4 million members. Over 100 of its 419 sites are in California, and therefore subject to AB 341. Taylor, who manages utilities for the company with the help of Ecova, assumed responsibility for the recycling initiative in 2012. The more he learned about recycling and waste procurement through Ecova’s Waste Consulting Solutions, the more he realized 24 Hour Fitness stood to gain in California and beyond.

ROLLING OUT A RECYCLING PROGRAM — ON A BUDGET

For brand-conscious retailers and consumer-facing businesses, paying attention to the smallest details in store décor and layout is no small matter. Placing garbage cans in a corner is not apropos for the clean, modern ambiance at 24 Hour Fitness clubs. Neither is spending upwards of $2,000 per site on custom-made recycling bins. Fortunately the company’s relatively small footprint contributed to a logical and cost-effective decision. “Those beautiful recycling bins you see at Target weren’t an option, so we trialed our recycling initiative with inexpensive boxes emblazoned with the ‘reduce, reuse, recycle’ logo,” explains Taylor.

With Ecova’s help, guidelines, training literature and signage were deployed to stores. Managers were given direct phone access to Ecova representatives for support. Soon, site-level associates and 24 Hour Fitness customers embraced the program.

“The positive feeling around implementing recycling is contagious. People naturally resist change, but not with this program,” says Taylor.

RECYCLING, THEN RIGHT SIZING — IN THAT ORDER

When Taylor was handed the waste management reins in 2012, the company was nearly two years into an engagement with another waste consultant. “Our previous consultant told us our rates were as low as they could go and if we wanted to continue seeing savings, we needed to implement the recycling program and right size our waste stream [i.e., establish optimum, site-specific trash pickup frequencies] simultaneously,” says Taylor. After consulting with Ecova, he realized it was illogical to right size waste disposal services prior to full implementation of the recycling program. “It takes time for recycling to kick into full gear. Associates and customers need to learn which bins take which recyclables, and we need to analyze how that will affect trash pickup schedules before we can optimize them,” he says.

24 Hour Fitness also learned it was leaving money on the table with its existing waste haulers. As it turns out, the biggest return the company has achieved to date came as a result of Ecova’s hauler procurement consultancy. At “open market” sites, where the company can choose which trash hauler it contracts with, Ecova’s management of procurement and contracting has garnered the company roughly 25 percent savings over its previous vendor. “We haven’t sacrificed service levels, we just shopped it out to reduce costs,” says Taylor.

“The entire experience has been very efficient. Ecova manages the entire process, just like they manage bill pay and utility procurement.”

The initiative has created efficiencies for 24 Hour Fitness associates as well. If a recycling bin or dumpster is overflowing—or on the contrary, if haulers are picking up half-empty containers—the site manager simply calls Ecova. An Ecova representative takes appropriate action, scheduling an extra pickup or realigning pickup frequency if necessary. In the process, the data Ecova gathers on site-specific trash generation trends and hauler invoices allows the right sizing of pickup schedules, driving further savings. Ecova also surveys site managers, which enables proactive change management. If managers indicate illegal dumping activity, overflowing or underutilized containers, or trash pickup irregularities, that data contributes to site-specific baselines that drive container type and pickup frequency decisions. As these changes are made, Ecova handles communication with, and training of, site-level managers. “In the past, we might have been quick to increase pickups from three to four times a week, but investigation into the situation saves us money,” says Taylor.

He estimates the combination of procurement and right sizing will contribute to savings between 40 and 50 percent by 2014.

As the recycling initiative at 24 Hour Fitness matures, the company and Ecova will further refine their efforts through waste characterization. “The only way to ensure compliance and drive further efficiency is to analyze what’s being thrown out properly and what’s not,” says Taylor. As the amount of recycled material increases, waste stream analysis will also help the company quantify its resulting carbon footprint reduction. “With the savings we’ve realized and those we anticipate, there’s no question we’ll be funding the program for continuous improvement.” In fact, the company already has an eye on a smaller version of those coveted recycling bins at Target.

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