Greening the Supply Chain: From Waste to Resource Management Green Supply Chain Forum Florida International University February 19, 2009 Prepared by: Paul Ligon, pligon@wm.com
WM Sustainability Highlights Select Stats Fortune 200 company with annual revenue of ~ $13B, and $20B in assets Large, diverse customer base of over 20 million establishments Largest recycler in North America ~ 7.6MM tons annually Enough to fill the Empire State Building over 11 times. 2020 Goal: Triple current recycle rates Over 100 renewable energy projects and 17 resource recovery facilities Produce enough to renewable energy to power over 1MM homes 2020 Goal: double renewable power generation by 2020 Technology and innovation Pioneered landfill gas to energy projects over 20 years ago One of the largest alternative fuel truck fleets in the nation (415 vehicles) Committed to investing $500MM of capital spending in new tech in the next 10 years
Perspectives Pessimist: Waste is a problem to be managed Design flaw Indication of inefficiency Entropy Optimist: There are no waste streams, only wasted resources Materials Energy Food
What is Resource Management? An alternative to waste management that focuses on resource efficiency though: Design/process improvements Technological innovations Behavior and consumption patterns Holistic systems management Aligned incentives Industrial, retail, and consumer applications
Resource Management in Industry: Upstream Case Studies
Waste Flow from Industry Supply Chains R&D, Purchasing, SG&A Inbound Logistics Product Formulation/ Production Outbound Logistics Wholesale Distribution Retail Channels Renewable Energy & Recycled Commodities Waste Waste Waste Waste Waste IT, Reporting, Internal Material Handling, Storage, Training, Transport/Logistics, Compliance Waste Environmental Assets: Transport, Recycle, Composting, Incineration, Disposal, Treatment, etc Service providers: internal staff; brokers; consultants; logistics; maintenance and janitorial contractors; industrial cleaning, waste & recycling companies Fragmented offering many players, duplicative processes and procedures, high transaction costs
WM Upstream Overview Customized Services Fully integrated offering that revolves around customer needs. Market Leader ~135 Sites Automotive Chemical Cruise Lines Food and Beverage Malls Pharmaceutical/R&D Refining Metals Energy Upstream provides resource management services to leading businesses that maximize economic, environmental, and regulatory efficiency. Cutting Edge Services Managed solutions ISO 14001 World Class Safety Best practice Continuous improvements Access to the largest enviro network in the US 280 + Employees Environmental Engineers / Project Managers / EH&S Staff / Business Development / Finance
Resource Management Upstream Perspectives Zero waste achieved at zero additional cost with zero additional environmental impact Zero waste equates to finding the highest value use for process residuals and byproducts. Lifecycle analysis and full cost accounting used to assess impact of options for residuals, byproducts and waste materials.
Upstream Resource Management Value Drivers
Resource Management at an Aluminum Company Capture system for recovery and reuse of industrial byproduct Yr 1 Yr 3 East Plant 2.0% - 76% West Plant 0.3% - 86% Cost Savings Year 1 Savings = $566,180.17 Year 2 Savings = $540,374.41 Year 3 Savings = $324,428.26 Total Savings = $1,430,982.84
Resource Management at an Automotive Company Internal material handling and recovery systems: 7 Assembly Plants, 6 Powertrain Plants, 2 Stamping Plants, 1 Casting Plant, 1 Machining Plant, 1 R & D Facility, 2 Parts Distribution Center Total annual cost savings in Year 3 of the Program = $2,155,969 $1.00 RM Services Drive Down Product Cost Total cost for Trash, Cardboard, and Pallets (including rebates) Cost per Vehicle $0.80 $0.60 $0.40 $0.20 $0.00 $0.37 $0.25 $0.06 $0.03 2003 2004 2005 2006 Year
Resource Management: WM-GreenOps Retail and Consumer Case Studies
Consumer Product Supply Chains, Waste & Trends CPG Supply Chain Sourcing Manufacture Distribution Retail Consumption Waste Volume Low Low Low Moderate High Select Trends Mass availability of brands in different retail channels SKU proliferation consumer choice confusion Growth of self loyal, low involvement consumer 41MM LOHAS ( green consumers) in US Focus on end of life product/package responsibility
WM GreenOps GreenOps Physical Capture and Engagement Green tracking symbol State of the art product capture systems Point of use reward systems WM Assets Authentication/verification/best practice Green Squad Reverse logistics WM Hauling/Tracker Mailback Commodity processing Recycle America Greenopolis Digital Engagement & Rewards Green social network Customized channel management (CPG/Retail/Consumer) On-Line rewards platform
WM Greenops Capture System Greenops inclusion on 1 2 Consumer purchase, packaging consumption, disposal choice 3 Product recapture, data collection, and tracking GreenOps Rewards 4 Pickup, backhaul, and commodity ID & support 5 Beneficial end-of-life reuse such as recycled, reprocessed products or green energy ECOSTATION automated Recapture Using Key Fob Consumer rewards & incentives Consumer Info and package data Data Verification, Accreditation, Tracking, Best Practice Reporting
Value Requirements Voluntary commitment to green end of life management GreenOps Tracking Symbol Greenopolis partner page GreenOps Eco-Stations - container/ capture/tracking WM reverse logistics and processing infrastructure Greenopolis partner page Individual offline green action Myopolis account Greenopolis rewards
Closing Thoughts Resource Management presents a significant, practical way to achieve sustainability goals Process improvements, tech innovation, behavioral change, systems thinking, and aligned incentives are to success in all segments Large industries have made significant progress Commercial and retail is the next wave Consumer driven RM has the potential to fundamentally change the game... There are no waste streams, only wasted resources
For Additional Info Contact info: Paul Ligon T: 281-914-7402 E: pligon@wm.com www.wmupstream.com www.wmgreensquad.com www.greenopolis.com www.thinkgreenfromhome.com Thanks for your time!