Waste Management Optimization

• [SITUATION]:
In the retail sector, I managed facilities contracts for multiple distribution centers (DCs). Among these, waste management processes was inefficiency and costly.
The operation was complex: all waste from the stores (recyclable and organic) was returned to the DCs. However, two separated suppliers handled it. One in charge of selling recyclables, which generated a modest revenue, and the other was responsible for disposing of organic waste in landfills, generating high recurring costs.

• [TASK]:
My goal was to optimize both the costs and revenues related to waste management. The existing model was inefficient, with poorly negotiated prices that fluctuated monthly. This instability led to a lack of transparency and made financial planning for the department difficult.

• [ACTION]:
I proposed a simple but strategic solution: consolidate all waste streams under a single supplier, pre-approved by our environmental consultancy. This new model brought two changes:

1) Fixed price per semester for both the sale of recyclables and the disposal of organic waste.
2) A simplified Profit&Loss model for each DC. At the end of each semester, If the supplier generated a profit from the operation, the gain was split 50/50 between both parties. In case of loss, it was the supplier’s responsibility, since they were in charge of pricing and operations.

• [RESULT]:
This innovative approach transformed the operation. We eliminated landfill disposal costs from the logistics budget, shifting them to the supplier.
It increased the financial predictability related to waste and created a performance incentive for the supplier, motivating them to optimize their pricing and operations.

As a result, we generated an additional revenue per year from the sale of recyclables. It also simplified operations by managing a single contract and a single point of accountability, improving efficiency.
In conclusion, this innovative solution stabilize the budget, simplified reporting and achieved a balance between environmental compliance with cost efficiency.