Reducing operating costs and overheads is paramount for companies operating within tight margins and in a competitive marketplace.

The cost of waste is typically 4% of turnover – in some companies it can be as high as 10%. Implementing waste minimisation measures can reduce these costs by a quarter – often with little or no investment cost. Across the retail sector as a whole, this could result in cost savings of £2.25 billion/year.

Waste minimisation is good environmental practice and good business practice. Reducing material consumption and waste generation while providing the same service reduces both environmental impact, and costs whilst improving those all important profit margins.

Most UK businesses can reduce their waste costs by 1% of turnover. This is equivalent to increasing sales by 10% or even 20%. Shopping centre managers in the UK currently spend about £36 million/year on waste disposal. This cost is expected to rise to £39 million/year by 2012. Given the true cost of waste there is a strong business case for taking action to prevent and reduce waste. Waste minimisation focuses on avoiding waste from occurring. Waste management focuses on how best to deal with wastes that do occur.

In the retail sector, implementing a systematic programme to minimise waste can reduce the costs associated with:

• packaging
• waste disposal
• water use
• heating and lighting
• warehousing product returns
• damaged goods
• transport
• buildings and grounds maintenance

The recycling ethos…

• Avoid producing waste in the first place
• Minimise the amount of waste you do produce
• Use items as many times as possible
• Recycle what you can only after you have re-used it
• Dispose of what’s left in a responsible way

Why reduce waste…

Some of the main reasons for reducing the amount of waste your company produces are detailed below, along with advantage it can bring…

Increase profits Most UK businesses can reduce their waste costs by 1% of turnover. This is equivalent to increasing sales by 10% or even 20%. In a business where profit margins are tight, a reduction in waste costs can be the difference between profit and loss. Maintain competitiveness.

The significant cost savings and improved efficiency achieved with waste minimisation allow companies to maintain their position in a very competitive UK market. It will also put them in a strong position to deal with the increased competition arising from the breakdown of European and global trade barriers.

Improve management control A systematic waste minimisation programme gives greater understanding of material use, utility consumption, waste generation, waste management procedures and waste disposal costs. This knowledge allows greater control of what is happening and the associated costs.

Improve their image Greater public awareness of environmental issues has increased pressure on retailers, suppliers and shopping centre managers to improve their environmental performance. Service providers that can demonstrate good environmental practice have a marketing advantage.

Achieve cost-effective compliance with environmental legislation Retailers are subject to a number of regulations and other mandatory charges, e.g. Duty of Care, the packaging waste regulations and landfill tax. The costs of both waste disposal and compliance with environmental legislation are set to increase further in response to these and other factors.

Adopt a systematic approach…

A successful waste minimisation programme is one based on a systematic approach that involves:

• measuring material use, utility consumption and waste generation
• planning
• identifying priorities for action
• setting targets
• implementing waste minimisation measures
• monitoring

These ‘Boots’ were made for recycling…

The Boots Company has developed a system for re-using the plastic transit trays for the delivery and display of its sandwiches without the need for any alteration or redesign. The trays are no longer used just once, but are re-used at least three times. Broken trays are returned to the supplier for recycling.

The benefits have included:

• estimated savings of over £125 000/year
• savings of approximately 200 tonnes/year of plastic
• savings of approximately 270 tonnes/year of cardboard reduction in the packaging obligation costs for Boots and its suppliers

Top Ten Tips for reducing waste in the Retail and Wholesale Sector…

1. Separate waste at source (particularly cardboard and polythene) and send for recycling.
2. Separate food waste – particularly if a waste compactor is used to prevent odours and contaminated run-off (the compactor may hold waste for a number of days).
3. Arrange for returns and unsold products to be sent back to suppliers.
4. Re-use packaging materials (e.g. bubble wrap and boxes) and use re-usable wood, metal or plastic pallets/crates for regular deliveries.
5. Fit water saving devices in toilets and washrooms, e.g. urinal timers and cistern volume adjusters.
6. Turn off lights at night and during closed periods.
7. Ensure heating, boiler, air conditioning and lighting programmes are programmed correctly to turn off at night and when premises are unoccupied and that these systems are regularly maintained.
8. Install energy-efficient heating, boiler, air conditioning and lighting systems. This is particularly relevant for lighting that is in high/continuous use.
9. Set budgets and/or benchmarks for key material, utility and waste management costs (e.g. £/m2 of floor space/year or kWh/m2 of floor space/year for energy).
10. Obtain bills from head office if they are not received at the branch. Develop incentive schemes to reward waste reduction and efficient use of energy.

For further advice on how to reduce costs within the retail and wholesale sector, click here to download the free business fitness guide for retail and wholesale.

This article is a synopsis of current waste management news and current questions organisations across the UK are faced with answering:

• ‘Environment Agency has announced the boss of an illegal waste dump has been ordered to pay £881,000 – the largest amount under the Proceeds of Crime Act to date’

Do you know who removes your waste and where it goes?

• ‘The median material recycling facility gate fee for England is £10 per tonne compared with £29 in Scotland, £36 in Northern Ireland and £45 in Wales.’

Do you really know and understand what you are paying for your recyclable material? Is your business really recycling?

• ‘The licensed trade in the UK discards some 700,000 tonnes of glass bottles each year, with only 25% being recycled.
• ‘Closed Loop Recycling is to recycle the capital’s plastic bottles left on the London Underground’

What waste streams do you have and are they all being recycled?

• ‘Manchester Airport has signed a deal to enable it to achieve a target of zero waste to landfill by 2030.’

By when do you envisage you will have a zero waste to landfill policy?

• ‘Managing Director of Eco Sustainable Solutions claims landfill tax has been the biggest driver of behavioural change in the waste sector. Landfill tax is now £56 per tonne and will rise to £80 per tonne in 2014. After that the Government should carry on increasing it by at least another £15 per tonne each year until at least 2020, pushing the cost of disposal to about £190 per tonne.’

Do you know how much of your waste disposal costs are represented by landfill tax?

Do you know what to do to reduce that cost?

Failing to address these questions will have one outcome. A significant increase in what you pay. Expense Reduction Analysts are experts at being able to to answer these questions and have done so on many occasions for our clients.

Who is going to help you answer them?

Contact Keith Robinson, by clicking here

Your black bag at the back door is a runaway cost, it now needs to be heading in the front door with a seat at the board table.

Cost, purchase and crucially supplier management is what we do and the approach you need to take with the escalating costs of waste management.

We wait to hear from you

Carrots and sticks almost always play a part in controlling behaviour. Where there is potential for harm is it always necessary that enforcement is introduced? What examples are there of changes in behaviour taking place and the outcomes being of benefit to the wider community and yet fines, warnings and threats have not been instrumental in bringing about that change of behaviour? Rather than answer the question directly let’s see what the Waste Review Policy has to say on the topic.

Before reaching the Policy document Caroline Spelman’s foreword says:

‘It (the policy) is about making it easy for people and businesses to do the right thing, whether at home, or at work; rewarding good behaviours; allowing those who want to do more to do so easily…..’  Carrots and sticks!

In no particular order and incomplete (purely for illustration) the Policy says inter alia it will:

• reduce the burden of regulation on legitimate business
• from 2014 set the floor for landfill tax at £80 per tonne
• stop the disposal of wood at landfill sites
• support initiatives which reward and recognise those who do the right thing
• target enforcement against those who flout the law
• argue that regulation has played a key role as an instrument of change
• consult on increased recycling targets on packaging producers from 2013

Whether or not the above seven points are carrots or sticks matters not an iota. A sterile debate about which heading they fall under will not have any impact on your business. As in so many situations context is all important.

Specifically for your business the key questions are what waste do you produce and what do you do with it? This is the essential starting point.

From there a whole range of questions can be answered and those answers will identify potential carrots and sticks. It’s also possible that a potential ‘stick’ in the form of legislation could be avoided and be turned into a ‘carrot’!

The nuts and bolts of this issue can be brought to the surface for a business once it decides to have a professional review of its cost, purchase and supplier management policy.

The threat of the black bag at the back door is now the foot in the front door and a seat at the board table.

Carrots and sticks are for those who wait for events to overtake them and are then left to rue the day when they could have done something about that black bag.

For further advice on how to manage your waste costs, click here to contact Keith Robinson

Prevention is better than the cure: look back and think how often that quote has been used and the contexts where it has been applied. Many instances would be in a medical situation where the argument was ‘If you don’t swallow this then you really will be ill!’ Ring any bells?

So why is Prevention at the top of the waste hierarchy in the Waste Review Policy?

Here is the league table.

The Review claims that Prevention of waste may well be the least understood and defined part of the hierarchy.

It’s asserted that UK businesses could save £22 billion via low cost and no cost resource efficiency measure.

The focus of waste prevention is for each business regardless of its nature or size to influence its supply chain, examine its own day to day operations and the impacts of their products when put to use and finally disposed of.

The Waste Review claims that where a business seriously addresses these questions the benefits will be:

financial savings: reduced risk from material shortages: improved brand image: better consumer perception: being ahead of new environmental regulations:

Businesses are being encouraged to:

• Design & manufacture more efficient, durable, repairable and recyclable products
• Re-use products and materials before resorting to recycling
• Accept greater ownership of products placed on the market
• Promote sustainable procurement throughout the supply chain
• Send less waste to landfill

The current statutory Producer Responsibility schemes cover waste electric & electronic equipment, vehicles, batteries and packaging.

Where will the next statutory requirements come from?

The challenges from this source require a serious and professional review of a business’s cost, purchase and supplier management policy.

The black bag has moved from the back door; it’s now the foot in the front door and a seat at the board table.

For more information on how to manage effectively your waste costs, click here to contact our Keith Robinson

The ‘Government Review of Waste Policy in England 2011’ was published 14^th June by the Department of Environment Food and Rural Affairs (defra). The document has been on its way for about a year and the minister responsible is Caroline Spelman.

The publication of the Review caught the attention of the television channels, the mid-week and week end press. However that coverage, possibly on the look-out for sound bites and controversy failed to go beyond the issue of the collection of household bins. The debate about weekly and twice weekly collections has been a major preoccupation of the media whenever they have broached the subject of waste in the past year or so together with the number of bins per household. One authority in the north east appears to have allocated nine bins per household; one cabinet minister seems to have gone so far as to claim that a weekly bin collection is nothing less than an inalienable right of a householder. Whatever!

The Review document runs to some eighty pages and is supported by other publications as well as drawing into the frame many other organisations. It is what the title says it is, …..Review of Waste Policy……

Therefore not surprisingly it is heavy on vision, direction, guidance and the inevitable road map; as a consequence it is light on specifics however not silent. Be warned and be aware.

Businesses of all sizes and forms, that is commercial, charitable and residential households will be affected by the intent of this Review.

The major thrust of the policy is to set the country on a route that will lead to a zero waste economy. Going no further than that headline will be enough for some to react and believe that their business will be either outside the scope of the Review or that with such an apparent lofty ideal it couldn’t possibly affect them. That presumption is unjustified and it’s a risky assumption to make, in a financial sense.

The Review lists four specific areas that will be used to assess progress. It explains that the targets being used as part of the assessment of progress are those set by the European Union and that they are the ‘minimum to achieve if a zero waste economy is to become a reality in the medium term.’

The speed with which the country moves towards a zero waste economy remains to be seen however whilst much will be done to gain buy-in the use of legislation has not been excluded.

For sure there will be legislation with some further waste streams being banned from landfill sites. Landfill tax will move in only one direction and that, in real terms will be upwards. For the first time the unit of landfill tax per tonne has been set has ‘a floor’.

A new definition of waste has been agreed with the European Union and the consequence of that will mean a different approach to household and commercial waste streams.

Waste, in all its forms, is no longer the black bin bag at the back door; it’s now the foot in the front door and a seat at the board table.

One thing is clear – waste handling and disposal need to be part of a business’s cost, purchase and supplier management policy.

If you have questions about your organisations waste costs, click here to contact this consultant by email

The cost of waste disposal is increasing at a rate above inflation and is set to rise further during 2011. Price increase notices will be dropping through letterboxes over the next few weeks, triggered by higher Landfill Tax and gate fees from 1 April.

The Government’s annual landfill tax ‘escalator’ brings an £8 per tonne (16.7%) rise this year and similar increases are scheduled each year until at least 2014. To compound the issue further, landfill capacity is reducing and this scarcity is allowing operators to increase their own gate fees too.

What can be done?

The good news is that, for many organisations, the effect of these cost increases can be mitigated or even reversed. Demand for recyclable materials has been improving steadily and has returned to levels not seen since 2008. As a result, it has now become commercially viable to divert a high proportion of waste away from landfill, providing the correct procedures are employed at the source of production.

What can Expense Reduction Analysts do to help?

Expense Reduction Analysts regularly monitors the marketplace for waste services and recyclable material and has reviewed the waste management arrangements of a wide range of organisations. We are therefore well placed to conduct a thorough assessment of your waste streams to identify hidden value and reduce costs. Typically for waste we are achieving an average saving of 30%

What about the service levels?

As with any projects Expense Reduction Analysts undertakes, our thorough ongoing audits ensure service levels are maintained and, in the vast majority of cases, improved. Additionally, we identify and recover any incorrect charges and deal with any issues that may arise. Our aim is to ensure our clients benefit financially and we also help them become more environmentally aware and increase their recycling levels wherever possible.

Our strong presence in the market place enables us to achieve and maintain results that organisations on their own just cannot match.

WRAP, or Waste & Resources Action Programme, is a not for profit company backed by government funding from England, Scotland, Wales and Northern Ireland. It has published its review of the year 2009/10.

Some snippets:

(i): Research highlights an estimated 18.4 million tonnes of waste is generated each year from the point of manufacture through to households. This represents total losses of £17 billion per year.

(ii): New Anaerobic Digestion facility open in Staffordshire. This facility will divert over 30,000 tonnes of food waste from landfill, reduce methane emissions from decomposing food and generate enough renewable energy to supply more than 1,300 homes.

(iii): Following a formal review of evidence, WRAP notes that kerbside sort collection schemes deliver reliable quality material at a lower net cost than single stream co-mingled collections.

(iv): An update to the 2006 ‘Environmental Benefits of Recycling’ report reviews evidence from around the world and concludes that recycling is preferable for the materials covered in the review.

On 1^st April, WRAP became the lead body for resource efficiency in England, drawing together the work of six other delivery programmes. This would not only provide a more integrated service to their customers but will save £10 million.

At the moment, as with many other pre-Coalition Government plans, where WRAP will go next is unknown.

A media release July 2010 from the Local Government Association intimated that Britain will run out of landfill space in less than eight years.

There is much that businesses can do now to impact on their waste disposal costs.

Inaction and waiting for reviews and policy decisions will simply see good money following bad.

At Expense Reduction Analysts we are frequently asked to review the waste and medical supplies costs associated with Nursing and Care Homes.

In many instances we find the staff and management are under pressure to deliver the best possible service to the people for whom they care, whilst operating under increasing levels of scrutiny and legislation.

We have therefore put together our top 10 tips for each area to help you drive down costs and improve your bottom line profit.

First of all, find out what regulations are applicable to your organisation – you don’t want to be hit with a fine for non-compliance. Did you know that all waste has to be accompanied by a waste transfer note (WTN), that it’s your responsibility to produce the WTN (although most carriers will produce one for you) and that you must keep copies for two years? Did you know that all waste producers are required to “pre-treat” some of your waste before it goes to landfill? Do you know what “pre-treatment” entails?

Once you know how regulations affect your organisation, work out what waste you have. A good start is to walk around your premises and look to see what is in the bins. It really is worth a look, because the contents are not always as expected.

Armed with this information, consider whether you can change your processes to reduce the amount of waste produced. This is likely to reduce the volume of materials purchased as well as waste disposal costs, resulting in a cost reduction double-whammy. If you reduce the amount of packaging you use, it could also reduce your requirement to purchase PRNs – a cost reduction hat trick!

Then consider what elements of your waste can be recycled. Recycling your waste doesn’t necessarily cost more than just sending it to landfill, and will become ever more economically viable as the Landfill Tax continues to increase. Much waste that is recycled also has a value, so recycling can even result in income for your company – even better than cost reduction. Your duty of care obligations can also met by pre-treating your waste in this way.

So, there are plenty of opportunities to reduce cost in waste disposal. If you are unsure of how to tackle this on your own, or would like some expert help, please do get in touch.