When it comes to your company's recycling stream, it can sometimes be a challenge to add improvements operationally or monetarily continuously. Fine-tuning your program can be as simple as keeping different scrap items segregated into separate bins or as complex as installing a scrap vacuum system to cut down on logistics within your facility. Here are five tips that you can review and implement that could help you improve your recycling stream.
Know Your Commodities
In almost every scrap industry, the value of a single stream commodity typically will outweigh the value of a mixed scrap package. Here are some examples.
Banding: Does your company use plastic banding on your pallets? Did you know that these bands can be made of either Polyethylene, Polypropylene, or even Nylon? If your company uses any of these bands, try to stick with just one kind. Mixing these bands could result in the material having no rebate value or being landfilled.
Cardboard: Keeping your cardboard clean and dry is integral to keeping the value up, but keeping other items out of the cardboard bale is also equally important. As your cardboard baler is filled, sometimes other commodities accidentally get dropped in with it, the biggest culprit being shrink wrap. Adding other commodities into your cardboard could cause the material to be downgraded or even cause rejection at the mill.
Metals: While different metals can be mixed sometimes, maximizing your overall rebate comes down to proper separation. If your operation produces scraps of Aluminum, Stainless, and Steel, keeping these items separated before shipping to your processor should show noticeable increases in your rebate.
Tie Your Commodities To A Market
When your processor or scrap service provider offers you a rebate for any of the commodities you may have, we sometimes trust that the price offered must be the fair and going rate, correct? Sometimes, yes. Other times, the processor may be playing the market to protect themselves, or they may not have a solid outlet for your material.
Asking your scrap service provider to formulate your price based on a publication protects you AND the service provider. When the market dictates the rebate and the market demand goes up, your rebate will go up, if the market goes down, then your rebate will go down, but over time the ebb and flow of the market will keep you well protected.
Each commodity can be tied to several publications. The Pulp and Paper Index is the most popular for paper and fiber markets, and the American Metals Market is always an excellent go-to for metal commodities.
Keep The Freight Separate
This one is one that I run into all the time. Countless times I will talk to a client about their pricing, and when I ask what the freight charge is, they say, "The great part is, I don't even pay the freight!". While on paper this looks great, it's not always the case.
You see, somewhere down the line, the client IS indeed paying for the freight; the scrap service provider includes the freight in the price. In theory, this sounds like a great deal, but unless there is a tonnage minimum, the servicer is likely providing soft pricing for your scrap material to ensure that freight cost is covered. Keeping freight cost as a separate line item can negotiate higher rebates for your scrap material because the freight is not a guessing game.
Know the Internal Logistics
Operationally speaking, getting your scrap material from point A to B has an associated cost. Often we set a system in place for our employees to bring their scrap material to the trailer or roll-off container, and we don't pay attention to the time or cost of these systems. We encourage clients to review their current system periodically. Businesses can change quickly, which means the current process may need to be adjusted. Talk to your front-line workers to identify pain points in the scrap process, then work with a team of people across all levels of your organization to find areas of improvement.
A recent client tossed around the idea of implementing a vacuum system for their material, but the associated cost had them hung up. When we worked with the client to calculate the return on investment for this system (including the cost-saving of not having the employees move the material), the payback on this capital expense was only two years.
Reviewing your processes and gathering creative feedback from across your organization can lead to significant savings in your scrap and recycling.
Audit, Audit, Audit
Accurate reporting and regular auditing of your waste and recycling streams can be invaluable. If you're not receiving regular communication and market updates from your scrap service provider, crunching and analyzing the data is all on you. Reviewing moves in the market, weight discrepancies, downgraded material, etc., is essential for keeping your waste stream running efficiently.
The key to this data is accurate weekly or monthly reporting on waste or scrap leaving your facility. If the information is correct, identifying trends within this data becomes easier. Identifying trends within the data means you can likely pinpoint the "why." Did your recycling go up and your landfill go down? Good, that means your company was probably saving money and was able to reduce waste. Did your recycling AND your landfill go up? Maybe you had a higher production level that month; this means you can use vital data to lower landfill costs if you have another high production month. Landfill go up, and recycling go down? This could mean recyclable material is hitting the trash compactor when it should be headed to the recycling facility.
As always, S&F Development is here to assist with all of the above and more. Click on the box below to get started on transforming your waste stream.