Asset Recovery Goes Dumpster Diving

If your company no longer needs a building, or a vehicle, or heavy equipment, you wouldn’t think of walking away from the value embedded in those assets. You’d want to sell the asset and get the highest return possible. But what about your waste streams and byproducts? 

Your procurement department paid for the materials coming into your operations. Why wouldn’t you want to recover the residual value on the back end? If you think it’s not much money, think again. General Motors announced last year that they are now recovering $1 Billion per year in value from commodity recyclables and materials formerly known as waste. Yes, that’s Billion with a B.

For large, enterprise organizations that generate significant volumes of materials on an ongoing basis (think manufacturing, distribution) and for those that aggregate materials (think post-consumer take-backs, reverse logistics, municipalities), the first question is – do you rely on an outside waste services firm to sell your valuable commodity materials?  More and more companies like GM are managing the sale of their valuable commodities directly, cutting out any brokerage fees and middlemen.  They might start out with the most valuable materials – often metals - then pull in chemicals, plastics, cardboard or other ongoing streams that have residual value.

If you think about it, your people know exactly what the market is for the raw materials and recycled materials they are buying. Once they are given the task of managing the other end of the cycle, they become even smarter about market conditions – giving your company a competitive edge on both ends of the market.

For some companies, once they realize how much they are making from their manufacturing waste, it opens up new ways of thinking about post-consumer take-back and reverse-logistics programs. Suddenly they want to take back their product, and their competitors’ product too.

So, that sounds easy enough. But in practice, it can be a challenge to get started.

Without much historical data, it’s hard to pinpoint the size of the opportunity for your company. And, there aren’t many best practices or systems yet established for how to manage and market your own byproducts. Even the leading companies doing it today know there is room for improvement.

One consumer packaged goods company managing the sale of $40 million in materials annually told us that they felt sure they were leaving as much as 20% and sometimes more on the table. But they did not have a competitive, transparent bidding system that would ensure they were getting fair market value.

Another major manufacturer indicated that their materials sales process was so time consuming and laborious that they were executing the process much less frequently than they should, often missing the upside on market swings.

RecycleMatch’s subscription based software platform has solved these issues by taking the best practices and tools already used in the Asset Recovery space and augmenting them to meet the unique needs related to ongoing streams of commodity recyclables, byproducts or ‘waste’.

What are the major differences?

Byproducts tend to be ongoing streams of materials instead of one time events. As a result, a competitive sales price might be negotiated on an index basis, or may require a buyer maintaining equipment or trucks at your facility.  That’s an ongoing relationship, not an eBay transaction.

Unlike used equipment sales, the sale of byproducts can tell a lot about your business. Some companies are very secretive about their byproducts, because they provide insights about their manufacturing processes or R&D. Branded materials often require special levels of destruction, and companies make great efforts to ensure their off-spec goods do not end up in the wrong hands.

Any company that subscribes to RecycleMatch knows that they maintain 100% control over each transaction while eliminating all brokerage fees. They can set up transactions including Online Auctions, Sealed Bid Sales, RFPs, as well as Landfill Diversion Listings, and Reverse Auctions. They ramp up maximum competition or solicit input on zero waste challenges by making the transactions open to the public. Alternatively, they can establish very private, invitation-only sales limited to their own approved bidders, and may selectively research RecycleMatch’s database of over 8,000 mills, recyclers and other environmental solutions.

With tools like these, your asset recovery people can turn dumpster diving into a highly profitable exercise.  If GM can pull a Billion dollars a year worth of byproduct sales out of their dumpsters, maybe it’s time you radically reevaluated your company’s approach to managing byproducts.  

Brooke Farrell is Founder and CEO of RecycleMatch, the first software company empowering enterprise organizations to accelerate their zero waste efforts while maximizing the economic value of their recyclables and byproducts. RecycleMatch was named Entrepreneur Magazine’s Brilliant Ideas, and Brooke is a PopTech Fellow. Brooke also serves on the Board of Directors for the Houston Technology Center. Prior to starting RecycleMatch, Brooke spent a decade as the senior brand director consulting Waste Management on their marketing strategy, including the award winning Think Green campaign and ThinkGreen.com website which won Mashable’s best environmental site of 2008. Her past… [Read more about Brooke Farrell]