In part one of our WTE Watch Series, we covered four top-performing waste-to-energy companies to watch this year. We also shared the unique challenges each is facing as they strive to maintain a competitive advantage and find ways to remain cash positive in a dynamic market.
While these companies- Generate Capital, Brightmark Energy, Vanguard Renewables, and Anaergia– face different challenges based on the type of WTE projects they’re invested in and the waste they use, we will explore how these varying challenges all have one theme in common.
In today’s post, we will share critical considerations these organizations and yours can use to implement end-to-end transparency, collect real-time data that drive actionable insights, and create a competitive advantage out of the very challenges they face.
1. My company has aggressive growth plans based on new funding- how can I be sure to spend the capital in a way that meets my growth goals?
The heart of procurement plans lies in the process of acquiring waste supply- in any WTE project, this is your supply chain. To optimize the ROI of capital investments, you need to better manage your supply chain.
Unfortunately, when it comes to sourcing waste, the market is currently the “wild, wild west” which can lead to unexpected costs and time wasted. This leads to supply chain inefficiencies that can be costly.
You need to consider variability in your supplier base and the availability of infrastructure to move materials. This can not be done while reactively managing your supply chain manually on a spreadsheet.
Instead, you must adopt a digital platform that provides real-time data on your supply chain thus empowering you with the visibility and actionable insights you need to proactively streamline your sourcing efforts.
With a digital process, you can generate your own custom waste shed analysis, answering questions such as:
- What type of supply is available?
- How much is in the area of your site?
- Is there competition from other WTE projects or an alternate use for the waste you need?
- How will that impact your ability to source what you need and how frequently you need it?
- What is your cost to transport waste?
- What is the best route for waste transport?
Instead of managing these things manually through spreadsheets, which severely limit your ability to adapt to sudden changes, we recommend utilizing a digital platform that can help you proactively plan and adjust to changing project risk factors.
2. What operational improvements can I make to add cost efficiency to my bottom line?
This is a question we get asked by our clients frequently. Most understand they need improvement but are unsure where to start without the right data to point those areas out. Here are a few data areas we audit for in our clients to help them identify their operational weak spots.
- Are all your contracts appropriately executed? Create an audit checklist of what you need from each project and ensure that your agreement covers every item. If not, it’s time to make some updates.
- Are your transport routes optimized? If not, you could be overpaying on travel expenses and shortening your time limit for salvaging waste before it bio-degrades. Furthermore, you can optimize your carbon credits with more efficient transport routes.
- Are you paying above market value for waste? It’s key to understand market value for each of your supplies, and for each of the areas you’re sourcing it from. Knowing how much a particular type of waste is going for can increase your negotiation power with suppliers and help you avoid overpaying.
- Do you have advance arrangements with suppliers as opposed to sourcing waste in real-time? If you’re sourcing waste as it becomes available, instead of creating ongoing delivery schedules with suppliers, you’ve set up a time-intensive, micromanaged process, which can significantly drive up your costs.
Relationship management is important. The better you can integrate a supplier into your supply chain system through mutual transparency and empowerment, the less likely they’ll be to leave it.
- Are you getting end-to-end transparency into your process? Doing so with a spreadsheet and a really tight budget makes it difficult to proactively optimize costs and find areas for savings.
A digital WTE platform can help you proactively manage your supply chain, turning it into a competitive advantage. It can also capture actionable insight to help you better manage your budget.
3. How can I set a budget and stay cash positive with a fluctuating commodity in an emerging industry?
Revenue matters, but if your supply chain costs are all over the place and you can’t point to why that’s not a good story for your board. Thus, setting benchmarks for supply chain costs is the first place you need to start.
You need to understand the benchmark price and supply for each type of waste you consume. This will give you a better sense of what you can afford and obtain your supplies at the most reasonable rates.
There are many different types of waste, so if you can also diversify your projects based on the most competitive rates, this will further help you save costs and optimize your supply chain.
Aside from fluctuating supply, there are several other risks to factor in, including changes in the quality of a supply, as well as supply alternatives. Understanding which supplies you may be able to substitute (i.e chicken waste for turkey waste) can help you save a lot of time and money lost hunting for limited quantities.
You also need to consider the reliability of a supplier, and exposure to downstream market risks that can all adversely impact the cash flow if they aren’t adequately managed.
By digitizing your operations, you can incorporate better transparency into planning and executing your WTE projects.
With a digital supply chain solution, you gain a 360° view of each stage of your project so that you can plan proactively for ever-changing risk factors.
A digital solution also eliminates the need for constant phone calls and updates to your database because it helps you keep track of developments in real-time through the software.
4. How can I make it simpler to find new suppliers and streamline my relationship management?
To bypass the need to cultivate relationships over long periods, you need a marketplace that can help you source the supply you require, match you with available suppliers in the area, and optimize transport routes.
Suppose you have multiple suppliers in different cities, with varying pick-up schedules. In that case, it can be a headache trying to figure out the best route to hit all suppliers and deliver the waste supply quickly. Furthermore, you want to be sure to prioritize bulk deliveries over smaller loads.
By leveraging a digital platform to directly connect with your supply network, you gain a birds-eye view of all your relevant suppliers on a local map. This empowers you to review rates, locate the correct quantity and quality of supply for your project, and easily upload and process the documentation needed to get and keep the project moving.
Ultimately, this leads to better organization, fewer headaches, fewer last-minute issues, and a more automated and improved operational supply chain. Not to mention the fact that this can actually reduce your supply costs by up to 40%.
Ready to Go Digital and Cut Supply Chain Costs By Up to 40%?
Enmass Energy can help! We’ve built a one-of-a-kind software platform to help support the entire waste-to-energy procurement process.
Our platform connects all the parties in Waste-to-Energy (WtE) projects – suppliers, transporters, trucking companies, warehousing, processors, and last-mile deliveries – through a single, secure cloud-based platform.
Enmass Energy helps energy producers source waste and suppliers divert waste while serving a greater mission of reducing waste in landfills.
If you want to learn more about our solution, please get in touch.