How to build a business case for new recycling machinery
The ‘reduce, reuse, recycle’ mantra is hitting home with more organisations than ever before. But in the eyes of many business owners, being ‘greener’ costs money. So, for facilities managers keen to minimise any expenditure and generate the best possible return – especially during times of economic uncertainty – a solid business case for new recycling machinery can be the difference between the investment going ahead, or not! Our MD, Marcus Brew, recently offered his advice to Tomorrow’s FM, but if you missed the original write-up, you can catch up here…
- Audit your materials
Know the specifics about the materials you wish to shred/compress/bale etc. What volume are you handling, how quickly do you need to get through it, and therefore what throughputs are you aiming for? This will help you to scope out the machine that fits your requirements. Think ahead a little too. Whilst you can never know what the future holds and you don’t want to invest in too large a machine unnecessarily, some additional capacity is often helpful.
The same advice applies to material type, especially if processing the ‘waste’ to sell. First and foremost, the machine must be capable of handling the materials you currently need to process. But is this likely to change? If so, it may be advisable to procure a machine that can be reconfigured, with ease, to deal with different material types.
- Define the output specification
Some facilities invest in waste handling/recycling machinery purely to reduce the size of the bulky materials they no longer have use for. Others are driven by compliance requirements (for confidential waste for instance), therefore the material will need to be processed down to a certain size. It is even possible to transform ‘waste’ into an output ‘product’ with a very defined specification. For example, commercial and industrial waste can be shredded to ensure a homogenous particle size, and consequently produce a Solid Recovered Fuel (SRF – a fossil fuel substitute). These output requirements should therefore also define the brief for potential suppliers.
- Research the market
Identify reputable manufacturers/vendors who can supply individual pieces of machinery, as well as those that can help design, source and install the entire recycling system. Whether you need a complex plant or a simple recycling line, true waste machinery experts will be able to help you map out a turnkey solution for maximum efficiency throughout every piece of kit.
Don’t just take suppliers’ word for it! ‘Seeing is believing’ so ask for a working demonstration of the machinery – ideally using your own materials. This evidence will be sought after by the financial decision-maker.
- Remember non-machine considerations
Of course, the machine will need to fulfil the brief you set out for it. But wider due diligence is also important. What are the typical service intervals and to what extent is uptime likely to be affected? How much do spare and wear parts cost, and are they readily available? What level of aftersales support and training is provided, to ensure ongoing process optimisation?
The answers to these questions will affect performance long into the future, meaning there’s far more than the recycling equipment itself to factor in.
- Do the maths
A business case for an investment in new capital equipment will almost always come down to the numbers. The price tag matters, of course, although different finance routes can make things more affordable.
But other metrics matter too. It’s crucial to calculate ongoing wear costs as this will rapidly inflate the financial impact of the investment. Think about power consumption too – some electric-driven machines are now so energy efficient that fuel savings alone (when compared to more traditional energy-hungry equipment) will accelerate the payback period. Then there’s the possible revenue that can be generated from the sale of some recycled products, so include these projections in the numbers too.
- The environmental ‘cost’
Due to legislative and societal pressures, many businesses are increasingly incentivised to ‘be green’ because it’s the right thing to do. Whilst perhaps harder to quantify, the impact on brand reputation, customer advocacy and marketplace positioning should therefore also be stated within the business case, as well as (perhaps more importantly), the ‘cost’ of not being more environmentally efficient.