Of course we all have 100% production. The answer is that if you have a skip in your factory, if you regranulated any plastic product or if you have any rubbish collected from your factory then you do not have 100% production and could save up to 1% of turnover (or 10% of profit) through waste minimisation through simple and practical waste minimisation.
100% production is about using every piece of material that enters your factory to produce good and saleable products. This might appear impossible to achieve but the closer to 100% you get then the more profit you will make. "Hidden waste is costing the UK plastics industry a fortune every day. The good news is that there is a lot of free government help available to reduce the losses." Jonathan Churchman-Davies - Plastics Manager - Environmental Technology Best Practice Programme.
"Generate profit and not waste"
Waste minimisation will reduce costs, make your company greener and can be part of a drive to achieve ISO 14000 but the tools and techniques are simply aids to the process. Waste minimisation is a basic management philosophy and approach to achieve a more profitable business Many companies count the cost of waste disposal, but there are other hidden costs of waste. Instead of wasting raw materials, time and effort, and paying for effluent or landfill disposal, take steps to stop waste occurring in the first place and add to your bottom line.
Waste minimisation is the process of systematically reducing waste at source in all areas of the company such as:
- Raw materials and ingredients use
- Water consumption and effluent generation
- Packaging, factory and office consumables
- Energy consumption
- Wasted effort
"Reduce waste at source"
The cost of waste is easily ignored and to make a business case for waste minimisation you need to start to put numbers on the actual costs. If you have never considered a waste minimisation programme then now is the time to start. Environmental legislation is raising the cost of waste disposal and rising costs of water supply and effluent disposal make it even more worthwhile to reduce costs at source.
Once you have decided to reduce the cost of your waste the most essential resource for information and advice is the Environmental Technology Best Practice Programme (0800 585 794). This is the gateway to a wide range of support material and expert help such as:
- Free publications.
- Telephone advice and site visits from industry specialists.
- Software programmes to both raise awareness and provide assistance.
Early contact with the ETBPP will provide all the resources you need to start and succeed in waste minimisation.
Waste minimisation is not a technology "fix", it is a management issue and needs top level commitment to succeed. Commitment will only come when sound business reasons are presented for the actions. The business reasons for waste minimisation are simple:
Waste minimisation is good business
Cost effective waste minimisation is a valuable investment with rapid payback times in the order of months. Your company is probably spending about 4-5% of total turnover producing waste. Up to 1% of turnover (or about 10% of profit) could probably be saved - often quickly and simply - through waste minimisation. The company profits could be significantly increased by cutting waste. To get an estimate of the potential for waste minimisation a general rule is:
Potential company waste minimisation savings = 5 x annual company waste disposal costs.
In some cases the "cost of waste" can be up to 20 times the disposal costs and up to 20% of the cost of production. When these levels are reached the "cost of waste" is likely to be higher than the direct labour costs - an item that is always measured and controlled in every company.
The true cost of waste is hidden - reduce waste to reduce costs
Most companies do not realise the full cost of waste and only record the cost of disposal. Throwing out waste is throwing out materials that have been paid for. It is the same as throwing out money.
The legal consequences
Companies, and especially key directors and managers, face stiff penalties for failing to comply with environmental legislation, which gets tougher and more complex every year.
The company reputation
Customers, employees and suppliers have a growing interest in every company's environmental performance. Waste minimisation shows how effectively and efficiently operations are controlled.
Many companies think that waste minimisation consists of large "STOP WASTE" posters on the walls but the greatest waste in the waste that we do not see. Waste is not stopped by slogans and in most cases the real challenge is to "FIND WASTE".
A "Walk Around" is the simplest way to find where waste is occurring. You can use tools such as waste mapping, process flow sheets and cause and effect analysis to help assess and quantify the locations and cost of waste. These tools will help to identify the inputs and outputs of each process stage and give an estimate of the potential savings to be made.
An input-output diagram gives an estimate of the "cost of waste" and the main stages for producing this are:
- Examine the total company process inputs and outputs
- Add values for the inputs and outputs
- Identify the types of processes being carried out
- Calculate the true cost of wasted raw materials
- Set some cost reduction targets.
The result of this work will be a materials balance where:
Materials In - Materials Out = Waste Generated
The 2 key numbers are the Mass Balance Yield (MBY) and the First Time Yield (FTY) - see box. These should give a good estimate of the process efficiency and flow charts can be used to find the losses.
Mass Balance Yield
Mass Balance Yield (MBY) measures how much raw material is converted into finished product.
MBY (%) = Weight of good production
Weight of virgin material used
Can range from 99% down to 30%.
What is your MBY?
First Time Yield
First Time Yield (FTY) measures how much is produced right first time.
FTY(%) = Weight of good production
Weight of total material used (including rework)
What is your FTY?
The FTY is usually lower than MBY but the goal is to have:
FTY = MBY
Management and reduction depends on measurement. Without measurement you cannot manage and you must start to measure the waste created so that the reduction programme can be seen to generate savings and improve profitability. Initial baseline measurements will also identify areas for cost effective investment and rapid improvement. One method is to use a waste account to measure the cost of waste to the business and to provide a measurement of the savings from the waste minimisation programme. A waste account will produce an annual waste balance sheet and an annual savings report to justify further investment to reduce waste and improve profits.
The previous actions will have identified the areas for the quickest returns at the lowest cost or biggest savings but it is not wise to start too many projects at once. It is the projects you finish that will score points, not the projects you start! Use the waste tools to identify the easy targets for quick returns.
Environment and Energy Helpline - 0800 585 794
The ETBPP has both general and industry specific resources to assist in waste minimisation and "Benchmarking waste in plastics processing" has very specific guidance for plastics processors. There are many specific publications for various areas of waste minimisation from energy management, compressed air and water, packaging use and solvents.
- EG252 - Benchmarking waste in plastics processing. (Click here to view an Adobe acrobat copy).
- ET30 - Finding hidden profit - 200 tips for reducing waste. (Click here to view an Adobe acrobat copy).
- GS25 - Saving money through waste minimisation - Getting started.
- GG38C - Cutting Costs by Reducing Waste: A self-help guide for growing businesses.
- GG251 - Environmental Management Systems for the Plastics Industry. (Click here to view an Adobe acrobat copy).
- ET225 - Waste Account: Count the cost of waste for your business and measure your savings. (Click here to view an Adobe acrobat copy)
GG125 - Waste Minimisation pays - 5 business reasons for reducing waste.
Last edited: 29/11/11
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