Do You Know How Much Your Trash Costs You?

An average organization is filled with cost-savings opportunities. One big opportunity is cleaning services — and the savings go beyond manpower savings by identifying those third parties charging above market average rates for unskilled janitorial services and replacing them with third parties charging market average rates.

For example, trash removal often represents a considerable savings opportunity in a large organization, and one that can be identified and executed in a matter of hours. Typically, the cost of emptying your dumpster out back is a function of two factors:

  1. Hauling Fee
    The cost to obtain a dumpster and to have it removed; driven by the frequency of the pickups.
  2. Tipping Fee
    The cost to ‘tip” the dumpster into a landfill. Driven by the local landfill costs.

Assuming the organization does not change the amount of trash it is generating, it can look at the size of the dumpster it uses. If it has a bunch of small retail locations with mostly non-food trash, it may be able to reduce its costs by increasing the size of the dumpster it uses and reducing the number of hauls.

For example, let’s assume the organization has a 2 cubic yard dumpster and that the hauling fee is fixed at X for dumpsters between 1 and 8 cubic feet. If the tipping fee for a 2 cubic yard dumpster is X and this is emptied every week, the total cost for a month is going to be:

Two Cubic Yard Picked Up Every Week:

Monthly Pickups 4 once per week
Tipping Costs X X for 2 cubic yards
Hauling Costs X fixed
Total 8X 4 * (X + X)

If the organization replaces the 2 cubic yard dumpster with a 4 cubic yard dumpster, while the amount paid to tip will stay the same per cubic yard, the hauling fee will effectively be halved (as it does not increase for a 4 cubic yard dumpster).

Four Cubic Yard Picked Up Every Other Week:

Monthly Pickups 2 every other week
Tipping Costs 2X twice the 2 cubic yard
Hauling Costs X no change
Total 6X 2 * (2X + X)

This is just one of the many savings opportunities detailed in Spend Visibility: An Implementation Guide — the newly released white-paper from Sourcing Innovation that is, to the best of our knowledge, the first white-paper that not only defines what spend analysis and spend visibility really is, but that also offers a step-by-step, vendor-free, implementation guide that demonstrates how an organization can achieve substantial year-over-year savings!

Download your FREENo Registration Required – copy of Spend Visibility: An Implementation Guide, which is already being called The Definitive Book on Next Level Performance, and find out what other, significantly larger, savings opportunities await you!