No business wants its hard-earned resources mismanaged – none at all. But oftentimes, financial resources get all the ‘pampering’. Smart businesses are now looking beyond the financial aspect of their operations to remain relevant. Real benefits can come from seeing things in a new light. One of such benefits is resource efficiency through enhanced waste management.
Going by the explanation of Andrew S. Winston and Daniel Esty in their book Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value and Build Competitive Advantage, taking one step further by viewing the entire business through an environmental lens can show previously hidden sources of waste thereby preventing unnecessary expenses from the beginning.
Waste can present itself in different forms – time, money, personnel, and physical resources. However, the scope of the write up is around sources of wastes in construction and manufacturing. Let’s look at common sources of waste and what we can do about them.
Common sources of waste
- Unused raw materials: This happens when the budget for line items get overestimated and leads to excessive procurement.
- Product defects: This happens when the product does not conform to the required specification. A typical example is a wrong calculation in the measurements of ingredients for a cosmetic product. A supposed body butter might come out like a lotion and might render the entire production batch unfit for packaging leading to a waste of resources and man-hours.
- Poor service delivery: This happens a lot in the construction industry when measurements and instructions are not followed to the letter. Oftentimes, a rework is needed. There is a waste of time, money, materials and manpower.
- Non-compliance with regulatory standards: This happens when businesses try to cut corners to avoid the ‘cost’ of environmental management. It can also happen when there is no transparency in the supply chain like Sony experienced in its 2001 Cadmium Crisis.
So, what can be done?
- Take it to the boardroom: Sounds too extra right? It’s not. All stakeholders need to be carried along with the new development. The persons in charge of business management, procurement, supervision, and environmental management (if there is any) can present a case for certain investments in strategic waste management.
- Be conversant with existing regulations: The Sony Cadmium Crisis cost the company $160M in returned products and 18 months invested in investigating 6000 factories to identify the source of the error.
- Educate the workforce: They are the ones in charge of ensuring excellent product and service delivery. Periodic training and newsletters can help to buy them into the vision of preventing waste at all levels. If there is any environmental representative, charge them to have call-to-action posters at strategic places – corridors, restrooms, and beside light switches.
- Ensure a transparent procurement/supply chain: Every line item has to be integral to the success of the business. Negotiate your way to cheaper deals. Cheap doesn’t always mean low quality.
- Audit the waste stream: This should present no trouble once the procurement process is clear. If there are estimation errors from procurement, check with suppliers if you can return for a refund or if the items can be used at a later date for similar jobs. Excess materials must be recorded and stored properly. This would be the first place to visit whenever procurement needs arise.
Doing well by doing good
Outside all of these, it is important to be proactive. Even when there are no enforced regulatory standards, you can do well by doing good. Employing strategic environmental management gives room for innovation and competitive advantage when done correctly. You also get to smile to the bank in the long term.