How to Reduce Waste Management Costs in Large Companies

For large companies, reducing the total cost of waste management is a strategic imperative that directly impacts profitability, efficiency, and sustainability. Although it is often relegated to the bottom of the list of priorities, waste management can represent a considerable expense, accounting for around 5% of revenue for most organisations, and even up to 10% in some cases.

This guide outlines a comprehensive approach to effectively reducing waste management costs, focusing on understanding the true cost of waste, implementing strategic reduction measures, optimising supplier relationships, and leveraging advanced technological solutions.

Understanding the "Total Cost" of Waste

Many companies underestimate the full financial impact of waste, considering only the visible costs associated with its disposal.

Visible costs typically include:

• Collection, transport, treatment, and disposal fees.
• Landfill taxes and other associated costs, which are continually increasing due to environmental legislation.
• Rental of containers or waste transport services.
• Rental of waste receptacles.

However, hidden costs are often far more significant and directly affect profits, including:

• Lost raw materials: Any material that becomes waste represents a direct loss of its purchase cost.
• Energy and consumables: Resources used to process materials that ultimately become waste.
• Labour costs, such as:
  • Handling and storage of waste.
  • Time and effort lost due to inefficient processes or waste-related issues.
• Administrative management: Documentation, reporting, and data collection, which can amount to hundreds of hours per year.
• Loss of productive capacity: Resources used to manage waste instead of generating products or services.
• Fines and penalties: Non-compliance with waste regulations can lead to significant sanctions, ranging from thousands to over a million euros in some countries.
• Process-specific waste: For example, the rejection of low-quality products in manufacturing.

Recognising and quantifying these hidden costs is the first step towards achieving significant reductions in waste management expenses.

Strategic Steps to Reduce Waste Management Expenses

Reducing waste management costs must start at the point of generation rather than focusing solely on disposal. Cutting these expenses in large companies requires a systematic and integrated approach.

I. Initial Assessment and Planning

Conduct a Comprehensive Waste Audit:
This is a critical first step to understand the current waste generation profile:

• Identify the types of waste produced and measure their volumes.
• Detect the points of waste generation.
• Create a map highlighting critical waste generation points and quantify hidden costs.
• Assess current recycling and management processes.

Collect Waste Data:
Essential for identifying waste sources and optimising processes:

• Categorise waste generation by causes: People, Materials, Methods, and Machinery. Waste may also include production rejects, wasted energy, or staff time.
• Gather data from contracts, invoices, and waste transfer or management documentation.
• Determine monthly and annual costs for rental, collection, and disposal.
• Work with waste managers to obtain additional data, such as historical extra charges, to analyse whether additional fees are being paid for extra collections, especially if waste generation is seasonal.
• Analyse the relationship between waste generation and production to establish a baseline and track improvements.

II. Policy, Objectives, and Employee Engagement

Create Waste Reduction Policies:

• ‍‍Policies should be clear, with defined procedures for all employees. For more information, see: Step-by-Step Guide to Circular Economy in large companies.

Set Concrete Objectives:

• Realistic, measurable, and with assigned responsibilities.
• Publishing progress motivates staff and fosters commitment. See our article The Most Important KPIs for Waste-Producing Companies.

Encourage Employee Participation:

• Include waste reduction in new employee training.
• Promote a zero-waste culture.
• Communicate benefits such as cost savings and sustainability improvements.

III. Implementing Reduction Strategies: The Waste Hierarchy

Eliminate Unnecessary Waste (Prevention):
Measures taken before a substance, product, or material becomes waste to reduce waste volume:

• Reuse products.
• Improve product and packaging design.
• Avoid single-use items.
• Digitalisation, paperless office.
• Minimise material consumption.
• Use waste management machinery (compactors, presses).
• Optimise collection schedules and container sizes.

Reuse Waste (Preparation for Reuse):

• Operations such as checking, cleaning, or repairing so materials can be reused without further transformation.
• Internal reuse of packaging and materials.
• Recover materials to reintroduce into processes.

Recycle (Recycling):

• Any recovery operation in which waste materials are transformed back into products, materials, or substances, either for their original purpose or for other uses.
• Includes organic material transformation (e.g., composting), but excludes energy recovery or conversion into fuel or fill materials.
• Segregate materials (plastic, metal, cardboard, wood, glass…).
• Keep recyclables clean to maximise value.

Dispose Responsibly:

• Recovery for other purposes (e.g., energy recovery): Any operation whose primary outcome is that the waste serves a useful purpose by substituting other materials that would otherwise have been used.
• Disposal: Any operation that is not recovery, even if it results in secondary utilisation of substances or energy (e.g., landfill or incineration). Landfill should be a last resort.
• Comply with regulations and due diligence requirements.
• Separate hazardous waste and maintain required documentation.
• Generate income from waste: If commercially valuable waste is identified, business opportunities may arise to offset disposal costs or even generate revenue.

IV. Optimising Supplier Relationships and Contracts

Review and Renegotiate Waste Disposal Contracts:

• Analyse actual needs and seasonality.
• Negotiate flexibility and avoid automatic renewal clauses.
• Compare offers from multiple suppliers.

Collaborate with Local Companies:

• Collective agreements for collection and joint negotiation.
• Share best practices.

V. Technological Tools: TEIMAS Zero

Platforms such as TEIMAS Zero can digitalise waste management in large companies, reducing costs by identifying new waste reduction opportunities and even potential business opportunities.

These platforms also enable:

• Global Control and Compliance: Centralised, multilingual management.
• Regulatory compliance with automatic alerts.
• Smart Data Utilisation: Custom dashboards, full traceability.
• Time and Administrative Cost Savings: Complete digitalisation, elimination of manual processes, reduced reporting and audit time.
• Cost Control and Optimisation: Full visibility of fees and expenses by waste type, inventory alerts, and internal stock control.
• Promoting Sustainability and Circular Economy: Calculate carbon footprint of transport and treatment, record waste reintroduced as raw materials.

VI. Continuous Improvement and Monitoring

Minimising waste costs is a continuous, cyclical process:

• Periodic performance reviews.
• Maintain improvements through training, updated procedures, and preventive maintenance.
• Feedback mechanisms to gather ideas from employees and suppliers.
• Communicate successes in terms of cost savings or environmental impact.

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By understanding the total cost of waste, applying strategic reduction measures, and optimising contracts, large companies can significantly reduce waste management expenses while simultaneously improving sustainability and operational efficiency.

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