- On April 7, 2021
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- cfo, finance, increase profit, reduce cost, reduce waste, sustainability
The Cost of Industrial Waste
The solid waste industry generates $60billion in revenue annually(1). That is only accounting for the cost of disposing of materials, NOT the cost of the wasted items themselves. $161billion worth of food is wasted annually (2), and with 75% lost before it even reaches grocery shelves (3), that is a staggering $120billion worth of food wasted at the production level! It’s no wonder why small and midsize manufacturers are increasingly looking to reduce the cost of industrial waste. Finance executives in the manufacturing industry recognize the costly effects of waste and implement strategies to increase sustainability and boost profits.
On average, each ton of garbage costs $30 to recycle, $50 to send to a landfill, and $75 to incinerate (4). With industrial waste figures at such staggering rates, imagine the drastic cost savings of recycling waste products, or even better, reducing waste and eliminating disposal costs. Furthermore, the fee of disposal is only nominal compared to the actual value of the items wasted! Wasted goods cost manufacturers on multiple levels, including:
- Cost of items/materials
- Storage costs, especially for perishables like food or pharmaceuticals
- Cost of time and labor in production
- Equipment cost and degradation
- Cost of disposal
- Material costs of production including water, energy, etc
Reduce Cost of Industrial Waste to Increase Your Bottom Line
On top of the significant cost savings, reducing waste uncovers untapped opportunities to increase revenue. The U.S. recycles about 30% of its waste stream, even though the Environmental Protection Agency estimates that up to 75% of our waste stream is recyclable. Selling industrial waste has become a $57billion industry in the United States (5). Identifying waste products in your production processes and converting some waste to recycling or selling it. You can also repurpose by-products and use them to create new products or sell them to another manufacturer. For example, whey is a common by-product in the dairy industry and can be repurposed to create valuable protein products. This will not only reduce your cost of disposal but may even create additional revenue streams! Furthermore, consumers are increasingly looking for brands with sustainable business practices, with nearly half reporting an increase in environmental concern (6). Transparency in your supply chain and production processes that show your efforts to reduce waste will benefit your brand reputation and encourage more returning customers.
The fiscal benefits for small and midsize manufacturers to reduce industrial waste are clear. Finance executives turn to business planning technology to help better match supply and demand and avoid over-ordering raw materials and overproduction. Better inventory management also allows you to identify exactly how much each item is in store and where, so you always have the right amount in stock and reduce storage costs. Manufacturers can use technology to identify which materials result in the most waste, which by-products can be repurposed, and how much of each is produced. Full visibility into your plant operations reduces rework and scrapped products, uncovers inefficiencies, and improves quality control. A fully integrated software allows you to simplify your waste management and identify where you can create more sustainable practices and boost your bottom line!
Learn more on how to decrease waste in the manufacturing industry: https://softengine.com/resources/whitepaper/manufacturing-waste/
Learn more on how to decrease waste in the food and beverage industry: https://softengine.com/resources/whitepaper/food-waste/