How Manufacturers Can Turn Waste into a Valuable Resource

How Manufacturers Can Turn Waste into a Valuable Resource
Manufacturing Digital October 2022
By Helen Sydney Adams

All too often, manufacturers think of their waste as a burden, rather than a resource with real value.

Amid the cost-of-living crisis, business margins are under strain, with the most recent CIPS UK Manufacturing PMI pointing to the lowest growth in factory activity since June of 2020. Meanwhile, as each day passes climate change becomes ever more urgent, with extreme weather scenarios seen far too frequently for anyone’s comfort.

Both issues require the attention and commitment of the UK manufacturing industry – but it doesn’t have to be one or the other. In fact, improved business sustainability practices can have a huge impact on reducing costs and adding value through increased efficiencies. This is already realised through actions such as purchasing energy-saving machinery and investing in solar panels to reduce energy costs. Yet an area that is vital to this mission that is often disregarded, is waste.

Manufacturers can reduce waste, lower costs & increase revenue

The dual need for manufacturers to reduce waste, lower costs, and increase revenue should spur manufacturers to evolve their thinking. There is an old saying “where there is muck, there’s brass”, and the manufacturing industry must look to other simple yet innovative ways to make more of their waste.

Waste solutions need to be top of mind for those wanting to prioritise both efficiencies and the environment. Although the need to reduce waste and recycle is widely recognised, there needs to be a fundamental shift in the way the industry views its waste as a resource to be valued rather than a burden to dispose of. For example, one of the simpler and more resourceful means of supporting the environment and the bottom line is being overlooked – waste rebates.

Waste rebates can be crucial to reducing waste whilst generating revenue. However, this revenue can only be unlocked once manufacturers’ view of waste evolves beyond something they simply need to get rid of and manage, to something that can add value. Many manufacturers are still struggling with this change in mindset. For example, research commissioned by Axil Integrated Services earlier this year found that manufacturing businesses aren’t exploiting the full benefit of rebates, despite the clear financial and circular economy benefits.

In simple terms, some waste materials (often those used in manufacturing processes) that can be recycled can attract a rebate value, putting revenue back into the business that otherwise would not have been realised. Improving waste segregation at manufacturing sites is the first practical step to unlocking value in these waste streams. Manufacturers should be inspired by their waste management partners to unlock value from their waste. Using innovative segregation and rebate models can enable manufacturers to offset disposal costs and even potentially receive a financial return on top of delivering wider cost-efficiencies.

Yet, over half (52%) of those we surveyed aren’t receiving rebates at all, despite knowing that the option exists. These businesses must follow in the example other leading UK manufacturers, such as LEVC, which recently had a 212% increase in metal rebates through improved segregation.

The potential economic impact of rebates must not be underestimated. Whilst prices of materials, as with everything else, does fluctuate, these innovative yet simple solutions such as waste rebates must be deployed where possible to support the backbone of British industry. There are proven benefits for manufacturing companies, from offsetting the costs of waste management to increasing operational efficiency and even generating revenue. For example, leading UK manufacturer, Whirlpool saw the kitchen appliance manufacturer receive a £400k increase in rebates from waste from 2020-2021.

It’s simple, but for many it’s hard to understand when for too long we’ve been told doing good will mean extra expense: sustainable practices are not incompatible with supporting companies’ bottom lines. In addition to being better for the environment, more efficient processes can help save companies time and generate value. There’s often a disconnect with how much investing in sustainability, and specifically waste, may require. For example, 55% of the companies we spoke to said the cost of implementing sustainable initiatives had been minor, while 27% said such initiatives had saved them money.

Manufacturers must be able to lean on their waste management suppliers

With businesses under sizable cost pressures due to the escalating inflation figures, it’s understandable that finances are a concern, and the manufacturing industry is under strain. However, the report reveals that many of these businesses are missing an opportunity to not only reduce costs but generate revenue in the form of rebates for waste products. A quarter (25%) of those do not believe they are always getting the best value for their waste materials.

The current economic and environmental climate means that businesses must do everything they can to apply new practices to support production, their people, and our planet.

Manufacturers need to work with their waste management suppliers to develop innovative solutions that deliver a real return on investment to help them weather the current storms. Collectively, the industry must follow in the footsteps of other leading UK manufacturers such as Whirlpool and LEVC, and lean on their waste management suppliers. Only then can they begin to unlock the opportunities available to them through rebates, support the circular economy and turn rubbish, into revenue.

Source: https://manufacturingdigital.com/procurement-and-supply-chain/how-manufacturers-can-turn-waste-into-a-valuable-resource