Fortune 300 Company turns around a costly and inefficient waste management program
A Fortune 300 Company has problems with their waste management vendor. The vendor handles waste and recycling removal at more than 7,000 locations for the Company. Invoicing from the vendor is inconsistent and sometimes lagging a year behind. The Company senses a lack of openness and transparency from the vendor, straining a 10-year relationship. They realize the contract with the waste management vendor is not a routine purchasing transaction. The Company needs to come up with a creative solution to address the problem.
WR-Martin urged the Company to examine its current waste management vendor thoroughly. In doing so, the Company identified several areas where they were dissatisfied with the vendor. After studying the Company’s facts, WR-Martin proposed changing waste management vendors at all 7,000 locations. This presented a psychological hurdle for the Company. The task of changing and maybe adding vendors at all 7,000 locations seemed daunting. WR-Martin reassured the Company that finding the right fit would pay off in the long run. A Request for Information was sent out and, based on the responses received, five possible vendors were selected to continue in the sourcing process. Through a rigorous RFP process, the field of potential providers was further narrowed down to two vendors.
WR-Martin brought the vendors in to speak with the client, presented the client with case studies to demonstrate what could be done and how, and showed the client that companies similar to theirs were producing huge savings in waste removal and also generating revenue from effective recycling with the right vendor. After several interviews, site visits, much analysis and careful consideration, the decision was made to award a portion of the business to both of the final two vendors based on the following criteria:
- Commitment to continuous improvement
- Commitment to continuous “right sizing” (i.e., getting the right size trash and recycling receptacles in the field and having them picked up at the right frequency)
- Maximization of recycling opportunities to generate additional revenue
- Transparency in financial and billing practices
- Internet-based, self-service tools
- Account management and field customer support
- Industry knowledge of waste management and recycling best practices
The two vendors were each assigned different geographic reasons. Vendor No. 1, a large, national waste hauler/management company, was awarded two-thirds of the business; Vendor No. 2, a smaller waste broker that had a very compelling business case, received the remaining one-third of the business because of their creativity and responsiveness.
Because of the sourcing exercise led by WR-Martin, the Company was able to generate additional revenue from bulk recycling of close to $4 million per year and reduced its annual operating expenses for trash and recycling pickup by more than $6.5 million annually. Combined these results produced a positive result in excess of $10 million on the Company’s bottom line. The initial sourcing and transition process took about nine months from start to finish. WR-Martin identified the opportunities, crafted and implemented a solution that was appropriate for the client’s needs and produced significant results.