The true cost of your waste is probably a lot higher than you think

The environmental impact of business is under the spotlight like never before. Perhaps understandably, the first step for SMEs is usually to look at their energy use – improving energy efficiency and using renewable energy being two of the most cost-effective, and often least disruptive, ways to cut your carbon footprint.

Energy isn’t everything

But energy isn’t everything. Research shows that changing our consumption of energy can only deliver just over half the emissions reductions we need to achieve our climate change targets. The rest has to come from a fundamental change in the way goods are made, by improving our use of materials, water and waste. In other words, manufacturers need to be smarter in production, using fewer resources and producing less waste in the process.

In the long-term, the economy will have to move to a circular business model, where materials are reused and kept ‘in the loop’ for as long as possible. But many SMEs are not ready to make this jump just yet. Instead, smaller manufacturers can start by understanding the true cost of waste in their business and what can be done to design it out at the earliest possible stage.

Moving up the pipe

When thinking about waste, most businesses tend to focus on ‘end of pipe’ solutions and how to improve the recycling of the waste that they create. While this is important, the real opportunities are to be found further ‘up the pipe’. The closer to the start of your process you think about waste, the more productive and cost-efficient you can become.

Huge savings can be made by finding ways to design out waste in the first place by using fewer resources and improving the efficiency of individual processes. Sometimes it just takes a trained eye to recognise quick wins.

Here are some examples:

• We worked with a manufacturer of industrial sealing technology that was rejecting plastic billets due to be used in products because they were cracking in the oven. By adjusting storage temperatures to counteract the problem, the company was able to save three tonnes of material a year, worth £30,000.
• In Tameside, we calculated that a bakery was wasting 36 tonnes of bread per year due to an inefficient conveyor system. By installing sensors on the line, the bakery was able to save £10,800 in raw ingredients – as well as the 2,000 hours of work that was being spent producing bread that was ultimately being wasted further down the line.
• In Trafford, we helped a specialist materials manufacturer to save £2,000 in annual packaging costs by replacing single-use cardboard packaging with returnable, hard-shell transit packaging for repeat customers, an investment which paid back in less than six months.

Continuous improvement

Done correctly, waste reduction and resource efficiency should be a constantly evolving process that is improved each year. According to the Institute for Manufacturing (IfM), the best manufacturers are improving their resource efficiency at an annual rate of around 7 per cent.

That’s why some of the most successful SMEs I’ve worked with are long-time clients. Continuous improvement is the name of the game, and there are huge benefits to be had.

Calculate the true cost of your waste

To help more manufacturers make resource efficiency improvements earlier in the process, we’ve developed a ‘true cost of waste’ calculator. The calculator helps us to identify your most wasteful process stages and attach a cumulative cost to that waste – incorporating the raw materials, energy and labour costs spent processing and ‘manufacturing’ it.

If you want to understand the true cost of waste in your manufacturing process, or improve your resource efficiency in general, our Resource Efficiency service can help. Get in touch today to speak to an advisor.

This blog was first published by Insider North West here.