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Controller’s Cost Report, October 1996, Vol. 2, No. 8 After downsizing, mergers, and spin-offs, where can you go next to increase your bottom line? The answer is closer than you think. Look under your desk. Yes, that’s right—the waste basket. There’s cash in that trash! You can sell, reuse, or reduce your use of waste paper, corrugated cardboard, wood waste, metals, plastics, even old computers. Take a lesson from AT&T, Lucent Technologies, McDonald’s, and HBO, which have all implemented recycling programs and reaped the benefits. Paper Products Recycling. Paper is the most used and wasted item in almost every office. To save money, sell used paper to recycling companies. Not only will this bring in more revenue, but it will reduce the cost of waste removal. To implement a truly successful paper recycling program, recycle all kinds of paper and give each employee a recycling waste paper basket to keep under the desk. In 1984, AT&T’s Bedminster, NJ, site went from recycling only white paper to a mixed paper recycling program with centrally located bins. Volume increased from 4.3 tons per month to 12.5 tons per month. Then the company went to a two-can per employee program—one lined bucket for trash and another unlined one for all waste paper (staples, paper clips, rubber bands, and all). The volume of recycled paper doubled to more than twenty-five tons per month and as much as forty to fifty tons some months. Besides the revenue the paper recycling earned it, the Bedminster facility was able to avoid $178,000 in waste hauling and disposal costs in the first year of the new program. HBO, working closely with haulers, recyclers, and mills, saved more than $40,000 in 1992 alone. All of HBO’s corporate letter-head and envelopes are 25 percent cotton plus 37 percent recycled content from their own waste. Their copy paper is also recycled, although not from their own waste. Reduce Paper Consumption and Costs. Cut your paper costs in half by redesigning a single process; for example, print and copy on both sides of the paper. At AT&T’s Bedminster, New Jersey site, Reprographics Services reduced paper costs more than one-third by charging lower rates for two-sided copying as an incentive to the other departments. For example: the rate might be 2.5 cents per image (side) for double-sided copying, and three cents per image (side) for single-sided. Having the right equipment and making sure the copiers are working properly affects paper usage, too. An even better solution to the paper problem is, if you don’t absolutely have to print, don’t print at all. E-mail and on-line services are better options. For example, employees of the Data Center at Lucent Technologies, Mesquite, Texas, trained users to read e-mail and reports on-line using the report management documentation system (RMDS). When necessary, they printed only the pages they needed and only on the days they needed them. With far less printing, the company replaced costly high speed leased printers with less expensive ones, saving still more money. The facility’s paper consumption was reduced by 73 percent between 1986 and 1995. Packaging. Packaging materials make up about one-third of the United States’ total waste stream. Recycling containers and reducing the use of packaging materials can keep waste costs down. For example, McDonald’s now recycles most of its corrugated shipping containers, diverting thirteen tons of corrugated board per store per year out of the landfill. McDonald’s recycling earnings in 1995 exceeded 1994 recycling revenues by $50 to $100 per ton in the United States alone. Since 1990, McDonald’s Corporation has made many packaging changes to reduce its costs. It reduced the weight and/or volume of packaging used by:
Less and lighter packaging means lower costs for supplies and freight. It made its Big Mac package 10 percent lighter and shaved one-sixteenth of and inch—an imperceptible amount—off its napkins and french fry bags. The results? In 1993, McDonald’s change in its Value Meal bags for 10,000 United States restaurants saved $775,000. Other packaging changes in 1994 saved the company $2.6 million. Wooden Pallets. In the United States each year, 460 million new pallets are made to transport heavy shipments from place to place. These pallets contain half of all the hardwood timber cut down and comprise 10 percent of all lumber used in this country. Millions of pallets bearing imported goods are manufactured from tropical hardwoods, many of which are discarded in landfills rather than recycled or repaired and reused. In an effort to conserve materials and to increase its bottom line, Lucent Technologies’ Mesquite, Texas plant changed its shipping dock procedures to separate new and old pallets, repair those that could be fixed, and sell the rest to recyclers. Close the Loop. Support recycling efforts by closing the loop, creating the demand in the market place, and supporting reimbursement rates for recycled materials. More companies today are moving toward using recycled products, as well as selling recyclable materials.
REDUCE YOUR WASTE DISPOSAL COSTS By improving your procedures, your company can reduce its waste disposal costs. Here are some examples: In just its New York City locations, Merrill Lynch captured close to $2 million in cost avoidance and paper recycling revenue between 1990 and 1995. From 1991 to 1994, Lucent Technologies, Mesquite, Texas, saved a quarter of a million dollars in cost avoidance by following the 4 Rs: reduce, reuse, recycle, and redesign. AT&T saved about $380,000 in waste disposal costs from 1984 to 1994 in its Bedminster, NJ, facility alone. Fran Berman, MBA, is a speaker, author, trainer, and consultant with a background in sales force automation. She helps her audiences and clients reduce waste and maximize resources through computer technology. Ms. Berman is also the author of Trash to Cash: How Businesses Can Save Money and Increase Profits. Should you have any questions, you may contact her at Future Focus, tel. (949) 643-0803. Copyright © 1996 Fran Berman
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