The Role of Benchmarking in the Waste Industry

As a business owner/operator, you have many decisions and choices to make each day, not the least of which is finding the proper vendors or subcontractors for certain aspects of facilities management and maintenance. For some services, data is readily available to make your decision easier: Internet service providers can be ranked by connection speed, office supply vendors can be sorted by price, and food suppliers can be judged by taste.

But how do you make decisions for other services, such as waste removal, when on the surface your options seem very similar and commoditized? Many owners fall back on that old standby, word-of-mouth, hoping that what works for the business next door will work for them as well. Other decision-makers are most concerned with the bottom line, and simply choose the vendor who offers the cheapest rate. Finally, and perhaps most foolishly, some people simply go with the company that offers the slickest sales pitch.

Up until recently, there were very few methods for properly choosing vendors to handle the large variety of waste streams that come from a modern business. Trash, recyclables, cardboard, grease, and infectious waste are just some of the products that must be properly disposed of, in most cases by separate haulers. Of course, these problems have been greatly alleviated with the advent of the waste management firm, but even choosing a firm that fits your needs can prove difficult.

Fortunately, a change is gradually taking place in the waste industry, one in which waste haulers are being held accountable for their service and practices through a process known as benchmarking. Benchmarking has proven very successful in other industries for some time now, allowing management to weed out inefficiencies and giving customers a valuable tool for choosing services.

As it relates to the waste industry, SWANA (Solid Waste Association of North America) defines benchmarking as “the systematic process of searching for best practices, innovative ideas, and highly effective operating procedures that lead to superior performance, and then adapting those practices, ideas, and procedures to improve the performance of one’s own organization.”

Not only can benchmarking improve the performance of a company internally, it can also give potential customers hard data with which to compare vendors of different sizes, locations, and operating procedures. Benchmarking allows previously intangible elements, such as customer service and reliability, to be measured and therefore compared between businesses and even across industries.

Certain metrics are obvious in benchmarking the waste industry while others need to be teased out in order have any real meaning. For instance, one measurement of interest to a potential customer is the number of collections a hauler makes per man-hour. While it might seem like bigger haulers would get the job done more efficiently, actually comparing apples to apples may indicate that a smaller company is in fact able to collect more efficiently, due to better route planning, better personnel management, or any number of other reasons.

Another metric of interest might be tons of waste hauled per X number of collection points. While bigger haulers will obviously deal with more total volume, smaller vendors may be packing their trucks more tightly, or be more willing to make extra pick-ups, again giving them the edge when it comes to efficiency.

For recyclables, one statistic you might want to know would be the average price per X tons of baled cardboard (or newspapers or glass) over the course of the past year that the hauler has obtained through reselling this refuse. Since many haulers offer their clients a percentage of the money made through resale, going with the cheapest hauler may not always turn out to be the best deal. Companies that are diligent in getting the best price for their recyclables are able to pass more of those profits along to the customer.

Since waste hauling is not an exact science, oftentimes businesses need extra pick-ups, weekend pick-ups, or special one-time services. When deciding on a hauler, you’d want to know the average amount of time it takes to have an extra pick-up or special service performed. More generally, you’d also want to know, on average, how closely a hauler keeps to their contracted schedule. If a hauler is missing a lot of pick-ups, and is slow to meet their customers’ needs, you need to look elsewhere, regardless of cost.

So far we have primarily looked at how waste haulers perform in the field, but of equal importance is the back end of the business. What good is “bargain” service if you can’t get a hold of customer service when you have a problem? As a customer, you’d want to know how many customer service reps a company has per X tons of waste picked up, the average wait time to speak with a representative over the course of a year, and the average time it takes from when an issue is reported to when it’s resolved.

Finally, and perhaps most importantly, customer satisfaction is a key benchmark when it comes to any goods or services provider, regardless of industry. Although this information can be biased, as it’s difficult to quantify satisfaction, certain metrics can help you decipher how well a company serves its customers. For the waste industry, you might want to know the average length of time that customers stay with a particular vendor. In urban areas, it might also be helpful to know the geographical distribution of a particular hauler’s customers; if they are too spread out without many clusters, it may indicate that word-of-mouth among neighboring business owners is negative.

As we have seen, the waste industry has come a long way from the one-size-fits-all commodity service that it once was. Many factors, excluding price, play a role in choosing your vendors and the quality of service that you will end up getting. By looking beyond just initial cost and digging deeper into various quantifiable attributes of a company, you are more likely to end up with a solution you will stay with for a long time.