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A large U.S. based consumer goods retailer realized that to offer goods at outlet prices, it needed to keep its own costs under tight control along with extracting total value for money with its operational investments. The company found that by recycling the boxes and plastic films used for shipping merchandise, it could good amount of revenue along with cutting down on waste hauling costs. The company planned to introduce a new recycling plan that would allow it make use of discarded packaging materials into a bottom line value. However, the fact that each of the company's store differed widely in terms of layout, operation, and waste management made it challenging to chalk out a plan with all the details completely worked out. Deloitte assisted the company in segmenting the stores in a pilot region into mutually exclusive categories based on a number of operating characteristics relevant to recycling, including back-room size, waste management cost structure and type of distribution network. A baseline recycling approach describing the investments and processes needed to enable recycling at each type of store was then developed. Cost and price information obtained through requests for information to potential vendors and recyclables purchasers, as well as factors such as labor costs, the volume of recyclables generated per store and other relevant information were used for calculating the anticipated net profit that recycling should yield at each individual store as well as for each store segment.
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