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What happens when procurement is given the task of tidying up the rubbish?

Rubbish Bin

Colin Kerr, General Manager of Wirrigan Business Services, NSW provides an expert view on the challenges of waste category management in procurement.

Waste can be a very complex category to manage, especially for companies with multiple waste streams and multiple locations, particularly if they are located in rural/remote areas and if there is a requirement to have centralised invoicing. 

This task needs to be achieved at a time when procurement is under more pressure than ever to combat inflationary price increases, achieve ESG targets and minimise risk – and all this with the post-Covid increased workload and reduced resources.

The most common challenges in waste that procurement is facing

Let’s start by looking at the most common challenges that procurement, facilities managers and contract managers face when they are handed the task of managing the waste category and/or taking it to market:

Starting the process, understanding and obtaining the relevant data

The biggest challenge we see with the customers we work with is getting the right data together and compiling it to start the process. Multiple suppliers, inconsistent formats and specific knowledge of waste streams is critical

Analysing the waste data and evaluating the current state of play

Getting a clear picture of where you are starting from is important. This is not a category where you can simply evaluate the top 80% of spend and hope the result takes care of itself

Obtaining all relevant contracts for all suppliers across all waste streams and sites

Most organisations are not fully optimised when it comes to consolidating contracts across suppliers and/or sites. This has a considerable impact on how you optimise your supply chain, as well as opportunities for spend reduction

The process will take up significant time and resources

Consolidating waste contracts, streams and managing spend effectively takes time. Most procurement teams are under-resourced and over-worked

Is the current bin configuration and frequency fit for purpose?

Too often we see companies simply applying the same routines and configurations that they have used before. As levies and surcharges increase, this price-led approach will not deliver the best ongoing result

Understanding what you are actually being charged for, e.g. overweight charges, environmental charges, etc.

Understanding what you are actually being charged for can be difficult, especially when your team is not specialists in this category. The more waste streams that your organisation uses, the more complexity is involved

Understanding how to achieve your company’s environmental targets and reporting responsibilities, e.g. net-zero landfill and aligning the desired outcomes to those goals

Truly understanding how to achieve your company’s sustainability goals, in relation to waste, requires not just an understanding of recycling vs. landfill. It also requires an understanding of emerging technologies and processes that can reduce, recycle or eliminate waste

But the biggest challenge is time.

The Hackett Group survey 2022-23 recorded an 11% increase in workload in procurement between 2022-23.

Yet over 90% of CPOs at PASA’s ‘CPO Exchange’ said that there was more than an 11% workload increase in Australia.

THG survey also suggested only a FTE growth in procurement this year forecast at 3.2%, a gap of close to 8% to workload.

Over some years now, we have observed that the end-to-end process of managing the waste category (particularly with a large-sized enterprise company and multiple sites nationally) will take around nine months on average to prepare, price evaluate, execute contracts and implement across sites. 

For organisations with many sites, we often suggest a rollout in stages, even if it takes up to two years so that all aspects can be consolidated. 

With pressures only expected to increase on procurement (and operational) teams, getting this right is difficult amongst conflicting priorities. 

Not to mention, who knows what tomorrow’s priorities may bring or what crises may pop up?

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