A Board Director’s Guide to Budget Saving Through the Creative Procurement of Waste Management

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A Board Director’s Guide to Budget Saving Through the creative procurement of waste management

the waste solution

The Waste Solution | www.gptwaste.com | info@gptwaste.com

WHITE PAPER

A Director’s Guide to Budget Saving

Through the creative procurement of waste management Why waste management should be on every boardroom agenda.

Waste management isn’t a topic that features high on the average boardroom agenda. But according to the UK’s leading independent provider of waste management solutions, GPT Waste, it should be somewhere on the agenda. In this White Paper, GPT Waste explain that by changing the shape of the decision making process for procuring waste services, any process and manufacturing organisation can be significantly streamlined.

Introduction This White Paper is provided as a reference for Directors and Senior Managers to help you consider how best to develop an effective waste management strategy.

It is based around asking a few simple questions. Thinking through these questions will help you to understand your current strategy and the key issues that you need to consider, in order to provide greater value to your business and to those to whom you are reporting. It indicates what you need to know to make some of the difficult decisions involved in developing and implementing a strategic and creative approach to waste management procurement,

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one that’s appropriate for your business.

Over the past few months you’ve probably been inundated with budgets, briefings around operational and financial reviews or forecasting.

So now is the time to think about this approach and the impact it can have on your organisation’s bottom line.

Perhaps you’re wondering how effective your company’s existing waste strategy is? This document will help you get to grips with some of the key issues and offers you an opportunity to review existing practices in simple terms with a view to becoming more resource efficient.

Poor waste procurement decisions can prove costly. The constant fluctuation of prices can significantly affect your waste management bill – which in turn affects your organisation’s performance against budget. A key decision for any business is whether to go for a fixedprice contract or for a more flexible pricing option. Obviously, a fixed-price procurement option gives the business the confidence to plan forward knowing what its costs will be in the short to medium-term, but savings of 25% can be achieved through the appropriate use of flexible procurement.

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A Director’s Guide to Budget Saving

Through the creative procurement of waste management The Business Challenge The MD, the HR Director, the Finance Director and the Operations Director – these are the people that should make the decisions on how their organisation manages waste. In essence there are only three things to do to improve the financial performance of a business; increase turnover, improve margins or reduce overheads. If your turnover is not growing, and your margins are depleting, what do you do? You buy better, or you reduce headcount.

Really effective waste management is much more aligned to the business’s financial health than just the emptying bins cheaply.

Let’s look at an example here: A specialist manufacturer with a mixture of hazardous and non-hazardous waste streams, has an annual expenditure on waste management across two sites of £1.45m.

Let’s assume that the average salary in that organisation is £25,000. If we were to reduce the waste disposal costs by 15% through more

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efficient waste management and commodity trading; the annual saving would be equivalent to 8.7 headcount positions. Or to put it another way, your most valuable resource ‘people’.

These results can be achieved by you looking at and thinking about where else you can better spend that money within your business whilst also improving your company’s environmental profile to prospective clients.

Waste can be defined as a material, substance, or by-product, eliminated or discarded as no longer useful or required after the completion of a process. Put more simply, it’s a cost to the business in the pursuit of profit. Waste Management is not an option; it is a mandatory and regulated process for business. But who makes the procurement decision? Quite often, it’s not at Board level and that’s why every day UK businesses are literally throwing away profit due to the waste they produce and how they handle that waste. Many businesses are

unaware of how significantly this impacts on their bottom line and others just don’t know how to make better use of their resources.

It’s often at procurement or operational manager level where the choice of service provider is made, without fully appreciating the wider processing outlets for waste streams or the impact on the business’s environmental credentials. When the focus is on the cost of emptying the bin, a real opportunity to manage waste is missed, an opportunity that can provide operational and environmental gain, whilst reducing spend. A better understanding of the waste process at Board Level will help identify the actions that can be taken to become more resource efficient.

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A Director’s Guide to Budget Saving

Through the creative procurement of waste management The Waste Management Solution

• Improved operational efficiency

Review – the current waste service and business processes creating waste.

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RE

RE-USE

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4. How can you or your waste contractor(s) help you to elevate your waste on the waste hierarchy scale?

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3. Is there a robust process in place to divert waste from costly landfill disposal?

Innovate – identify new technologies for processing waste as the market evolves through the waste solution the contract term.

CE DU

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2. How can you prevent any of this waste?

D

E CYCL RE

1. What is the true cost of your waste disposal?

Deliver – a compliant focused approach RE-Uwhilst SE E waste stream.

C providing transparent reporting by U

L OSA SP

Some of the questions to consider when looking your organisation’s Waste Management Strategy:

Agree – the service, work with the employees to increase their understanding of waste management objectives.

RE

• Reduced carbon consumption

Evaluate – the most operational, financial and environmentally effective solution available in the market.

L OSA SP

• Improved recycling

DI

• Financial savings

OVERY REC GY

• Reduce waste produced

Through our waste review service, we can support Directors and Senior Managers to audit their entire business process to identify waste streams and waste processes. We look at how many times waste is handled throughout the organisation, we are able to quickly identify where significant cost savings can be made and how you can potentially turn waste streams to revenue. This means that we can also help you to see waste management as a revenue stream and not just a cost to the business.

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Our approach for waste management is centred on the following core principles:

OVERY REC GY

GPT Waste can deliver the waste solution for your organisation to achieve:

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A Director’s Guide to Budget Saving

Through the creative procurement of waste management The Benefits We can show a company how to procure waste management services properly, in our experience many organisations tender by looking for the lowest cost per bin for disposal, which is often not the best way to achieve value for money. For example, Landfill Tax increases year on year, many waste streams are classed as General Mixed Waste (GMW) and destined for landfill, however with a change in the way waste is segregated at source, converting GMW to Dry Mixed Recycling (DMR) is achievable – which means a lower rate for disposal and increased recycling.

Waste disposal is costly as service providers will make revenue by the number of bins they empty and the frequency they collect. Waste management can reduce disposal costs.

Waste management is not difficult, it is really simple. True waste management is about actually looking at by-products before they are consigned as waste and then identifying the most appropriate route to process.

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• I mproved operational efficiency – reduce the amount of resource required to handle waste on site, for example there is no point bailing cardboard if the volume that you produce doesn’t attract a rebate.

• R educe waste produced – for example, ink toners are a costly expense to many businesses, a simple change to the global print settings on the printer so it prints on both sides of the paper will reduce paper bills and also print volume.

• Reduced carbon consumption – the journey of your waste can be further than you imagine, Your choice of waste contractor will dictate how far your waste will travel before its final destination. Many waste streams are bulked up at transfer stations and then hauled to processing sites, these sites are often many miles from the original location. This all adds to the waste producer’s costs, but also to the overall carbon footprint.

• Financial savings – any reduction in waste production will create cost savings directly or indirectly.

• Improved recycling – having a waste policy and a managed approach to recycling serves the business in various ways; one which isn’t often considered is how it attracts new clients to the business.

Corporate, Social Responsibility (CSR) is a valuable part of a company’s offer to prospects.

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A Director’s Guide to Budget Saving

Through the creative procurement of waste management The Benefits continued…

EXAMPLE ONE

Multi-site Private Healthcare Provider We reduced the overheads for a Multi-site Healthcare Provider in excess of £160,000 in ten months, whilst also increasing their overall recycling rate to over 96%.

EXAMPLE TWO

Food Manufacturer We worked with a food manufacturer recently, who hadn’t got anyone managing their waste, but they had eight people that were responsible for it, and those eight people had other primary roles in the business. We put forward a costing model which demonstrated that by implementing our proposal, the organisation would get to a 95% recycling rate and they could then employ a dedicated & qualified waste manager through the financial savings made against their current provider.

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A Director’s Guide to Budget Saving

Through the creative procurement of waste management Summary In our experience, savings of 15 to 25% can be achieved through more considered approach to the procurement of waste services. Clearly, understanding how to get the best procurement deal is important, but so is developing a robust waste management strategy through understanding the options available to process waste.

If your organisation is looking to streamline functions and reduce headcount without overburdening the remaining headcount, a creative approach to procuring waste services will reduce your waste costs to ease that burden. The key difference is between ‘waste disposal’ and ‘waste management’.

Waste disposal is costly, waste management is less costly and more effective, because it identifies how to reduce waste arising. Making the right procurement decision will allow you to improve operational efficiency across all functions of your business.

GPT Waste, the largest UK independent provider of waste management solutions and sustainable waste services offer a free waste review consultation for Directors.

www.gptwaste.com www.thewastesolution.co.uk

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GPT the waste solution

The Waste Solution 14 Whitworth Court, Manor Farm Road, Manor Park, Runcorn, Chershire WA7 1WA. www.gptwaste.com | www.thewastesolution.co.uk | info@gptwaste.com | 0844 854 5000