MINIMIZING WASTE BY SOURCE SEGREGATION AND INVENTORY CONTROL. John S. Hunter, 111, P.E., Ph.D. Senior Environmental Engineering Specialist

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1 MINIMIZING WASTE BY SOURCE SEGREGATION AND INVENTORY CONTROL John S. Hunter, 111, P.E., Ph.D. Senior Environmental Engineering Specialist Environmental Engineering and Pollution Control Building 21-2W M Company P.O. Box St. Paul, MN \ - G\W 3?- Paper presented at the Government Institutes, Inc., seminar entitled "Technical Strategies For Hazardous Waste Prevention and Control" held in Washington, D.C., on December 8-9, 1987.

2 MINIMIZING WASTE BY SOURCE SEGREGATION AND INVENTORY CONTROL John S. Hunter, 111, P.E., Ph.T). Senior Environmental Engineering Specialist EE & PC, Building 21-2W-05 3M Company P.O. Box St. Paul, MN Waste segregation and inventory control programs can be very profitable for a company of any size or for any category of waste generator. Many segregation and inventory control programs have been successful in 3M and new programs are in the process of being implemented. These programs are no respecter of functional boundaries and can be found in offices, laboratories and in the manufacturing plant. The guiding principles for these programs will be set forth and specific case studies will be discussed as working examples in this paper. Segregation and inventory control programs for waste minimization are really two different subjects. Of the two, waste segregation is the more straight forward approach to waste minimization and its principles are fairly well understood. It is a necessary prerequisite to most reclaim/ recycle programs. Inventory control, on the other hand, is commonly not associated with the subject of waste minimization at all. It is a new area that is just beginning to manifest itself. SOURCE SEGREGATION It is logical to discuss source segregation first since it is a concept that is well known and has been practiced for many years. Qovernment Institutes. Inc. D 1987

3 The basic strategy that must be followed for source segregation to be successful is to accumulate waste materials in the form or state of their highest value and to not allow any dissimilar material to become mixed with it. Pursuing this strategy will permit the highest possible revenue to be generated from a given amount of waste. A simple example is the segregation and sale of wastepaper. First of all, dissimilar materials must be excluded such as cans or bottles as they will interfere with the reprocessing of the wastepaper back into a useful paper product. Secondly, higher value paper should be kept segregated from lower value paper. Computer cards, for example, bring a much higher price than ordinary office trash and should be kept segregated. The same is true for white office paper such as computer printouts. Another category would be corrugated cardboard. Each type of wastepaper product can be used by different recyclers for different purposes and bring different prices. Of course, there is a practical limit to how much segregation can be practiced by a specific plant or operation. One consideration is the cost of labor necessary to segregate and manage the materials. The other is the availability and cost of the storage space that will be required. And do not forget that a buyer for the waste has to exist within a reasonable transportation distance. A. Wastepaper There are many examples of successful waste segregation and sale or reuse programs within 3M. One was instituted over 10 years ago by 3M Custodial Services. It involves the segregation and sale of wastepaper and cardboard in company offices, laboratories and manufacturing facilities. In the offices, employees are each given two wastebaskets -- one for paper that can be recycled (the'list of qualifying materials is printed onto a label that is affixed to the side of the basket) and one for other trash. When the office areas are cleaned by Custodial Services personnel the recyclable paper is kept segregated and placed in separate trash compactors for pickup by paper recyclers. A similar program is in effect in the corporate laboratories. Other opportunities present themselves at manufacturing plants. One is the segregation of waste corrugated cardboard from packaging materials used for inbound shipments of materials used at the plants. Another is trimmings from paper products being made at the plant or sometimes the paper products themselves if they do not pass quality checks. Qovernment InstHuteo, Inc. D 1987

4 The wastepaper segregation and recycle program continues to grow and involves a large number of 3M's facilities in the United States. In 1986, approximately 8,000 tons of wastepaper and cardboard were segregated and sold for recycle for a revenue of $620,000. In addition, it is estimated that disposal costs of $260,000 were avoided so the total financial benefit to 3M was nearly $900,000. Another benefit was the conservation of landfill capacity. B. Polyester Film Another important segregation program at 3M involves the recycling of polyester film. Waste polyester film that has never received any coating can be chopped into flakes and recycled with fresh polyester resin used in the making of new film. Waste film that has received coatings must first be chopped then cleaned to remove the coatings but can still be recycled. Polyester used for photographic or X-ray film must be extremely pure to avoid product performance problems. The reason for this is that during the period of light exposure a potential exists for light scatter back into the lightsensitive coating if impurities are present within the polyester film backing. Due to the purity level required, this type of film is more expensive than other types. As a consequence, waste photographic or X-ray film is more valuable and must be kept segregated if its full recovery value is to be realized. Practical problems must be overcome to make sure a "clean" waste is shipped for recycling. For example, containers used to accumulate and store the waste film seem to become handy waste receptacles in a production area. In some cases, shipments of the waste film have been received that contain old lunch bags. Stale tuna sandwiches and empty soda pop cans have ruined batches of this material and made it unfit for recycling. If not discovered, this contamination can ruin long runs of new film and create vast quantities of new waste material. It is much easier to recycle film for the production of polyester that does not have such a stringent quality requirement. The problem encountered in this case, however, is the difficulty in cleaning the scrap film for reuse. Photographic and X-ray film is rather easily cleaned but the coatings for other products are much more tenacious. Some even form a chemical bond with the film base. Polyester segregation and recycle programs within 3M save the company over $1.5 million per year in raw materials. Qovernment Inrtltutee. Inc

5 C. Solvents Large quantities of organic solvents are used by 3M in its product coating operations. In 1985, 3M plants reclaimed on-site and reused approximately 2,680,000 gallons of these solvents. Another 906,000 gallons were sent offsite to reclaimers for distillation then returned to 3M for reuse. Another 993,000 gallons were sold to reclaimers who, in turn, distilled the solvents and sold them to other clients. Segregation is an important part of this recycling effort. Normally it is not possible to recycle solvent mixtures, they must be brought back for reuse as a single type of solvent. If segregation can be practiced then only simple distillation or possibly filtration is needed to produce a recyclable solvent. If two or more types of solvent get mixed together it becomes necessary to perform the more expensive and difficult process of fractionation distillation to purify and separate the various component types of solvent. D. Waste Treatment Waste treatment is an unusual and interesting area to look for opportunities to apply the principle of segregation as the following two examples will attest: 1. Toxic metal was getting into the wastewater at a 3M plant and contaminating the wastewater treatment plant sludge, rendering it RCRA hazardous by characteristic. The source of the metal was traced and a separate treatment system was installed on the process wastestream to prevent the metal from entering the larger wastewater treatment plant. Even though the toxic metal must still be disposed, the volume of waste containing that material that must be considered as hazardous has been greatly reduced thereby reducing disposal costs and conserving capacity at a controlled hazardous waste landfill. 2. The ash at 3M's corporate hazardous waste incinerator must be disposed as hazardous waste. It has been found that magnets can be used to remove nonhazardous ferrous scrap metal from the ash and that this metal scrap can be sold. This procedure reduces the amount of hazardous ash that must be disposed by 50 percent. Significant disposal cost savings are realized as well as a revenue from the sale of the scrap metal amounting to about $35,000 per year. Qovetnment lnatltutes, 1987

6 INVENTORY CONTROL Inventory control can be defined as the management of the amount of raw materials, semi-finished goods and finished products within a facility. Material control is the management of the movement of these materials through the facility. These functions are closely related and interdependent so they are often combined into one responsibility. Much of the discussion that follows involves both functions lumped together under the name of inventory control. The fundamental principle of inventory control is not to have any more material on hand than is necessary to keep the facility running and productive. This is easy to say but hard to carry out in practice. It fits into the same category as the old stock market principle of buy low and sell high. What happens when more material is on hand than is needed? First of all, a lot of money is tied up in surplus inventory that is not available for productive use. It is like putting money in the bank and paying the bank to hold it for you since you are having to pay for storage space. American industry has become increasingly aware of this lose-lose situation the past few years, particularly because of competition from Japanese firms that have solved this problem and have reduced production costs by doing so. What does all this have to do with waste minimization? I do not believe industry has given much thought to this question. I have never seen it on a list of waste minimization practices nor have I heard it discussed at any waste minimization seminar or workshop. Hopefully this paper will shed some light on the subject. What waste can be eliminated through improved inventory control practices? Two sources of waste come to mind. One is material that has been in stock so long that it has exceeded its shelf life and must be disposed. The other is material that is in stock but is no longer needed in carrying out the function of the facility. This situation can arise when the formulation for making a product changes and an ingredient is no longer needed or when production of a particular product is terminated and the materials used for making that product cannot be used elsewhere in the facility. Finished product is not exempt. For example, a product may be taken off of the market for any number of reasons and an inventory of that product must be disposed. Qovernment Inrtltutes, Inc

7 What can be or what is being done to reduce this waste or to eliminate it altogether? Progress in this area is like a lot of waste minimization activity today in that a considerable amount of effort is going into it by industry for good sound financial reasons but not necessarily as a specifically directed and identified waste minimization activity. Therefore, it is not recognized as waste minimization and is not being documented. Improving inventory control to achieve production cost savings has been a major emphasis within the 3M company the past several years. Programs have been instituted to help find productive uses for surplus inventory and also to prevent the creation of surplus inventory in the first place thus minimizing the amount of material that must be disposed as waste. The following will provide a brief description of some of these programs: A. Productive Use of Surplus Inventory One way 3M has been able to recover the value of surplus material is the establishment of a staff group appropriately named "Resource Recovery". This organization has the responsibility to search for profit opportunities that exist in the company's surplus resources. Resource Recovery personnel search out buyers outside of 3M for surplus materials and equipment as well as for reusable or recyclable waste products. They handle all the business aspects such as negotiating prices and contracts without charge to the 3M divisions holding the surplus materials or equipment. Sales have generated over $110 million in pre-tax income over the past 5 years. Resource Recovery also is active in finding productive uses within 3M for surplus materials, equipment and reusable or recyclable waste products. For example, it is currently working with the 3M Purchasing Department in setting up a computer system that automatically matches any surplus materials within the company with purchase requisitions as the requisitions are being generated by anyone in the company. This has been made possible by the adoption of an electronic purchase order system by 3M. As a person enters the name of the item to be purchased, the computer will display where that item can be obtained within 3M, the quantity available and the price. The requester then has the opportunity to decide how much, if any, of that material he/she wants to obtain through internal transfer. Government InstHuts~, Inc. 1887

8 B. Prevention of Surplus Inventory Several initiatives are being taken to reduce or prevent the generation of surplus inventory. Some are just common sense and certainly fall into the category of waste minimization. The following are some examples: 1. Container Management. Several options are being followed to reduce the quantity of empty or partially filled containers on site. One way is to purchase materials in larger containers. Another way is to purchase materials in returnable or reusable containers. 2. Purchase Quantity Management. Possibly the newest idea in this area is to only purchase the quantity of material needed for a specific production run so that no material is left over to put into storage. Other, less sophisticated approaches are also becoming apparent. For example, laboratories are notorious for hoarding small quantities of a large number of chemicals, many of which are no longer being used. For safety or other reasons, these labs have to be cleaned out and all these chemicals become a major headache and expense to dispose. We are learning that under existing environmental regulations it can be costing one hundred dollars or more to dispose of each small container found in a laboratory. One way to control this problem in the future is to greatly restrict the flow of chemicals into the laboratory. Laboratory personnel should not be allowed to accept free samples of new chemicals from sales representatives to "check out someday". All purchases of chemicals should be approved by the laboratory manager who must verify that the chemicals are needed for specific, funded projects that are underway. Unused portions of chemicals should be returned to laboratory chemical supply rooms for later use by other laboratory personnel. Opportunities also exist at the manufacturing plant. Some are quite simple but often go undetected until an organized search is conducted. For example, one of 3M's plants was having difficulty in meeting a chloride limita-_ tion contained in its wastewater permit. Sources of the chloride were investigated but nothing that was found was a surprise nor could it explain why the permit limit was being exceeded. After discussing the problem with operating personnel at the plant it was eventually discovered that the problem was related to the subject of purchase quantity management. Apparently, when the storage tank for hydrochloric acid used in the regeneration of the water treatment deionizers would begin to get low in inventory, maintenance personnel would notify plant purchasing that more acid was needed. The acid would be ordered and delivered in a bulk Qovernmsnt Instltutea, Inc. 1987

9 tanker truck. At times there would be more acid in the truck than could be accommodated by the plant's storage tank. When this happened, plant maintenance personnel would proceed to regenerate deionizers until enough storage space was available for the acid being delivered. This added unexpected amounts of chloride to the plant's wastewater since the deionizers were being regenerated sooner and more frequently than needed or expected. The problem was that the supplier assessed a penalty for any acid not accepted for delivery that had to be returned in the tank truck and the purchasing department always ordered the same amount of acid which was approximately the entire storage capacity of the acid tank. Procedures have now been instituted to make sure that amount of acid purchased does not exceed the available storage volume in the tank. 3. Slow Moving Inventory Report. Management at 3M has become more and more concerned about dead inventory. A new management tool has been created to track and manage this material. It is a computer generated report called "Slow Moving Inventory Summary". This inventory accounting system keeps track of how long a raw material or semifinished good has been in stock. The computer report shows the dollar value of items that have been in inventory over twelve months for each manufacturing division. This is a big incentive to the manufacturing division management because corporate management uses it as a tool for evaluating the performance of division managers. 4. Just-In-Time Manufacturing. This is the ultimate in inventory control to eliminate the generation of waste since the object is to eliminate the existence of an inventory altogether. This is achieved by devising methods of moving material directly from the receiving dock into the manufacturing area for immediate use then out the shipping dock without any intermediate storage. 3M utilizes a set of sixteen basic principles in implementing its Just-In-Time (JIT) program. Those four that have a direct impact on waste minimization are: a. Stockless production. Stockless production works on the principle that you produce only the minimum amount of material required for the next step in the process. This limitation on production eliminates the creation of "just-in-case" inventories that can eventually become waste requiring disposal. b. Customer/supplier networking. The customer and supplier of material, component parts, packaging, or finished product, whether internal to the company or external, is considered as an extension of the JIT production organization. This requires developing long term Qovernment Instltutes, Inc. 1987

10 relationships, effective communication and accurate requirements so that exactly the needed amount of material reaches the right point at the correct time. This keeps the production process moving efficiently with no unnecessary waste being generated. c. Pull system. A pull system is a "reactive" mode of operation based on the principle that a production step is carried out only when required to satisfy a downstream need. This is applied whether the next step is internal or external. This eliminates the need to create any type of inventory. d. JIT transportation. Raw materials, component parts and supplies must be delivered to production facilities when and where they are required in their manufacturing process. Delivery too early builds unneeded inventory and delivery too late shuts down production. Finished goods must be moved out as soon as they are produced to keep the plant from getting "constipated". An interesting method is being used by 3M to provide the manpower necessary to convert its plants into JIT operations. All new process and industrial engineers and materials control specialists are put through four weeks of training including one week on JIT concepts. Then for their first year of employment they are assigned to JIT implementation teams which include some experienced 3M employees. This gets them fully indoctrinated into the JIT mentality which carries over into future work assignments. The JIT program has been very successful. Typical results at individual plants show reduction in waste generation from 25 up to 65 percent. Through 1986, total savings from all aspects of JIT are estimated to be $146 million at a cost of only $35 million. SUMMARY Waste segregation and inventory control programs can be very profitable. These programs are no respecter of functional boundaries and can be found in offices, laboratories and manufacturing facilities. The basic strategy that must be followed for source segregation to be successful is to accumulate waste materials in the form or state of their highest value and to not allow any dissimilar material to become mixed with it. Pursuing this strategy will permit the highest possible revenue from a given amount of waste. There is a practical Qovernment Instftuter, Inc. D 1987

11 . l Hazardous Waste Prevention 81 Control limit to how much segregation can be practiced at a specific location. Factors such as cost of labor, availability and cost of storage space, and the existence of a buyer for the material must all be taken into account. Inventory control is receiving much focused attention at this time by American industry as a means of significantly reducing manufacturing costs and waste of materials but it is not commonly associated with the subject of waste minimization. Several techniques can be used to reduce or eliminate inventory thereby minimizing the amount of material that is surplus to actual needs or has exceeded its shelf life and must be disposed as waste. Examples include container management, purchase quantity management, the "Slow Moving Inventory Report", and Just-In-Time manufacturing. JIT is the ultimate in inventory control as the need to maintain an inventory is eliminated. Oovernment Inrtltutes, Inc. 61 le87