By Ray Hatch, CEO & President of Quest Resource Management Group
Key Takeaways:
- Evaluate waste services for efficiency: Tailor waste management contracts to regional needs and seasonal changes, ensuring cost-effectiveness and reducing unnecessary services.
- Unlock value from overlooked waste streams: Repurpose materials like plastics, cooking oil, and organic waste through recycling or recovery, minimizing landfill waste and reducing disposal costs.
- Engage teams to identify inefficiencies: Involve managers in assessing operations for hidden inefficiencies, optimizing waste collection schedules, equipment usage, and fostering a culture of continuous improvement.
In the dynamic landscape of food distribution, sustainability is transforming from a mere trend to a key opportunity for growth and innovation. With eco-conscious consumers leading the charge and regulations evolving to promote greener practices, there is a prime chance to enhance operations through thoughtful self-reflection.
Let’s explore three key areas where food distribution and packaging operations can conduct simple self-assessments. By identifying opportunities for improvement in current practices, significant elevation of sustainability efforts regarding waste can be achieved — all without major financial investments.
1. Evaluate waste services for cost-efficiency and customization
First and foremost, let’s talk about an important aspect of running a business – service levels. Take a close look at current contracts and assess what services one’s actually getting. Prior history shows that a close review may reveal a company is paying for 10% or more in unnecessary waste services.
In the food distribution realm, a one-size-fits-all approach can lead to inefficiencies and missed opportunities that drain resources. Think about it: different regions have their own challenges.
- Coastal areas, for example, often see a high concentration of tourism, which leads to increased usage of single-use plastics, such as containers, straws, and bags.
- Meanwhile, agricultural regions might struggle with food spoilage, overproduction waste, and/or issues getting fresh produce to market.
To streamline waste management, consideration of regional differences, the size of facilities, and types of waste generated is essential. Seasonal changes also play a role. Take restaurants and hotels near the coast; they typically see a spike in business during the summer. But are they adjusting their services to match this increase, or is their pickup schedule the same throughout the year? Keeping an eye on surplus food is so important because the rate at which food spoils really varies with the seasons, and that can affect how quickly it needs to be recycled.
Adopting a blanket service plan might save some time on planning, but it could end up being neither cost-effective nor practical. Instead of shelling out extra money on waste disposal fees or dealing with inefficiencies, it’s wise to create strategies that cater to the specific needs of each area. This approach positions companies to improve service efficiency, cut down on waste, and work towards a more sustainable operation, potentially positioning them as innovative leaders in the industry.
Checklist for cost-efficiency:
- Review contracts: Are you paying for unused services?
- Understand regional challenges to tailor services.
- Adjust for seasonality: Are pick-up schedules optimized for fluctuating waste volumes? Customize services to match facility size and waste type.
2. Unlock commodity value from overlooked waste streams
The management of waste is a big deal for food distributors when it comes to being sustainable and boosting their bottom line. It’s surprising how often companies overlook waste streams that could actually add value. Waste streams such as plastics, used cooking oil, cardboard, or organic waste are often underutilized assets. Instead of defaulting to landfill disposal, food companies can unlock cost savings and environmental gains through innovative waste repurposing.
Exploring waste service practices is crucial for environmental sustainability. While gathering all food waste together may contribute significantly to greenhouse gas emissions — up to 3.66 metric tons — it’s important to recognize that separating and categorizing waste can lead to more effective outcomes. For instance, non-meat food waste alone contributes around 0.76 metric tons of greenhouse gases.
Instead of sending all waste directly to landfills, food distribution and packaging companies can adopt a nuanced approach to sustainability:
- Implement the most efficient collection system using both mixed and segregated waste processes. For example, cooking oil is a clear-cut single stream collection process, but other streams, such as food and packaging, may be combined into a single stream. This approach can enhance efficiency at the source and allow for easy disposal while maintaining operations.
- Partner with facilities that specialize in recycling or chemical recovery to repurpose materials into reusable products, energy, or compost. By collaborating with recycling facilities or chemical recovery services, even mixed waste can be sorted and repurposed into reusable products or energy.
This dual strategy not only minimizes landfill contributions but also helps avoid costly disposal fees associated with hazardous waste. Moreover, distinguishing packaging materials and unused ingredients — whether at the source or through backend processes — can unlock financial advantages. By identifying and utilizing these resources effectively, companies can enhance profitability while promoting sustainability and improving operational efficiency.
Checklist for capturing value:
Analyze all waste streams for overlooked opportunities.
- Establish a system to categorize waste effectively to reduce GHG emissions,
- Partner with recycling and recovery services for backend processing.
- Calculate savings from landfill diversion and repurposed materials.
3. Engage teams to identify operational inefficiencies.
Lastly, it is essential to understand the dynamics within the company’s operations. Achieving cost-effectiveness and sustainability hinges on effectively assessing internal processes. A valuable approach is to identify areas that may require additional attention — commonly referred to as the “problem children” of operations.
Operations managers possess insights that can reveal hidden inefficiencies impacting cost and sustainability. Their deep familiarity with facilities equips them to offer insights that might not be readily apparent. Ask key questions:
- What unique challenges exist at each location?
- Are there frequent instances of overflowing containers necessitating more pickups than anticipated?
- Are machine or equipment failures leading to downtime and excess waste?
The focus here isn’t just on how often pickups happen; it’s really about ensuring that the appropriate pickups are made in relation to the volume of material being handled. Containers should ideally be filled close to capacity to avoid incurring costs for empty space. Striking the right balance between efficiency in pickups and the type of equipment used is crucial for aligning operations with actual processing needs.
Involving managers in this process can really shine a light on inefficiencies that might otherwise fly under the radar. If a location constantly faces overflow issues, that might point to problems with scheduling or inventory management, which can add unnecessary costs. On the flip side, if equipment is down often, it could mean it’s time for a better maintenance plan or even a replacement — both of which can have significant financial implications if not addressed.
Engaging managers and employees in these discussions not only facilitates the gathering of valuable insights but also fosters a culture of continuous improvement. Their contributions can result in meaningful operational changes that save costs while also supporting more sustainable practices, particularly given that different locations may have unique sustainability requirements.
By aligning waste collection schedules with actual needs and addressing recurring equipment issues, companies can streamline operations and minimize unnecessary costs
Checklist for manager insights:
- Identify “problem children” (focus on areas that require extra attention for improvement).
- Engage with managers to leverage their insight regarding facility-specific challenges.
- Evaluate equipment and maintenance.
- Promote continuous improvement.
In the realm of food distribution and packaging, embracing sustainability offers numerous benefits that extend far beyond mere compliance. Proactivity is vital in seeking opportunities for enhancement. By evaluating service levels, identifying overlooked waste streams, and delving into internal operations, food distributors can significantly lessen their environmental impact while also realizing cost savings.
A win-win for efficiency and sustainability
For food distribution and packaging operations, sustainability and cost-efficiency are increasingly intertwined. By evaluating services, unlocking value from waste streams, and engaging teams, companies can make tangible progress toward their environmental goals while protecting the bottom line.
Implementing these self-assessments can yield tangible benefits, enhancing operational efficiency and ensuring customer satisfaction, especially in today’s eco-conscious marketplace. Taking these steps is a win-win — they not only improve a company’s sustainability profile but also contribute to a healthier planet while positively influencing the bottom line.
Ray Hatch has served as President and Chief Executive Officer of Quest Resource Management Group (NASDAQ: QRHC) since February 2016. A senior executive with in-depth experience building profitable businesses and orchestrating transformational growth, Ray brings over 25 years of experience in both the waste management and food services industries. He has managed businesses and/or business units with as many as 600+ employees and more than one billion dollars in revenue. Previously, Ray served as President of Merchants Market Group, an international foodservice distribution company. Ray also served in various executive roles with Oakleaf Waste Management, a provider of waste outsourcing that was acquired by Waste Management.
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