Recycling
Planning Efficient Bale Routes and Procedures
In an industry with thin margins and increasing competition, success in the recycling business will come to those who challenge the status quo, embrace technology and partner with companies with a track record of successfully implementing similar programs.
Fred Virga and Anthony Flynn
If you walked down the street and $100 fell out of your pocket, would you leave it behind or pick it up? If you would pick it up, then you may agree that leaving bales of recyclable material at your location or your customers’ location without a solid plan to quickly and cost effectively move them to Material Recycling Facilities (MRF) and mills is similar to leaving that $100 on the ground. Without a solid plan, significant negative financial implications could result from lost revenue on weather-damaged or stolen bales, or fines for violations of local ordinances and fire codes.
With advances in technology, the recycling industry has the ability to leverage best practices that have been commonplace in other industries for a number of years. When implementing best practices for pickup and delivery of bales, it is critical to consider the following areas:
Inventory and projections
Data collection
Use of technology
Routing
Driver pay
Engine monitoring
Score card reporting
Bale Inventory
The first and most important step is to understand your bale inventory at each location. It is crucial to know how many bales each location produces every day and consider seasonality. The best way to accomplish this is through systematic data collection and analysis, and the right technology allows your associates or drivers to capture much of the information electronically. You do not need to purchase a multi-million dollar ERP system that will take months to implement and tie up valuable company resources. There are reasonably priced hosted software solutions that aid in data collection and offer reporting, routing and more.
By capturing the data electronically, reports can be generated to estimate how many bales a location will produce each day based on historical data. A defined process and reporting system that enables you to estimate bale counts is a very powerful tool that often results in significant savings for companies when it comes to routing and scheduling bale pickups.
Dynamic Routing
We all feel the pain from prices at the pump, so why have inefficient set routes when you could use a load planning tool to build full trailer loads with fewer stops and fewer miles? Dynamic routing based on actual bale counts is a must if you are serious about reducing your cost per ton. Break the mold of traditional set routes in favor of routes that change.
Incentivizing Drivers
Once you have created the most efficient routes possible, the next step is to incentivize your drivers to complete those routes in the most efficient manner possible. To accomplish this, consider shifting your drivers from an hourly-based pay structure to a productivity-based pay structure. For those who make the switch, expect a 15 percent increase in driver productivity.
Whether you elect to pay drivers by the mile, stop, ton, bale or a combination of these metrics, it is imperative to have controls in place to ensure deliveries are executed safely while maintaining customer service levels. Before shifting from hourly pay to productivity pay, it is recommended that your payroll department confirm measurements are in place to track their performance and accurately pay drivers.
Diagnostic Tools
Up to this point, we have explained how to use technology to capture bale inventory data, create efficient dynamic routes and implement a productivity-based pay program for drivers. There are a few more steps to ensure you are not leaving more money behind. Monitoring the performance of your power units is the next step. Remote engine monitoring is an integrated feature of the hosted software solutions that are now available. These diagnostic tools allow you to monitor MPG performance, engine idle times, vehicle speed, acceleration, RPMs and more. All of these metrics are crucial for controlling fuel spend once your vehicles are out on the road.
Measuring Performance
The final step in the process is implementing scorecard based reporting to measure performance of the metrics discussed above. While this is the final step we discuss, defining Key Performance Indicators is an important step to take when first implementing this program. Metrics such as average bale count per stop, average bale weight per customer, miles in between stops and time per stop are just a few of the important KPIs you may want to consider measuring. Starting with the end in mind, you can design a system that captures and measures the significant cost factors that drive profitability in your bale route business.
Putting the Right Program in Place
Transportation costs have increased steadily year after year and all signs point to this trend continuing indefinitely. Whether it is fuel prices, driver wages or equipment pricing, the components required to operate a vehicle fleet are on the rise. Putting a program in place to mitigate these rising costs is as logical as picking up your $100. In an industry with thin margins and increasing competition, success in the recycling business will come to those who challenge the status quo, embrace technology and partner with companies with a track record of successfully implementing similar programs.
The Cardinal Logistics Management leadership team has over 20 years of experience serving the recycling industry. Cardinal is committed to providing industry leading dedicated contract carriage and technology solutions to recycling and waste management companies. With nearly a million tons of product transported each year, recyclable waste has become one of Cardinal’s fastest growing verticals. As a 3PL that works with many different industries, Cardinal shares this experience because it is important to leverage best practices from other industries to continue to be an industry leader. For additional information about how Cardinal can help you improve the efficiency of your bale route operation call the Business Development team at (770) 993-5662, ext. 32 or [email protected].