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The power of five

WasteCare has recently put in place a way of working taken from the manufacturing sector to boost efficiency and productivity at its WEEE reuse facility in Leeds. Andrea Lockerbie paid a visit

Talk of boosting reuse and embracing the circular economy has been gaining ground in recent times. But it involves a change in both the mindsets and operational processes used by the various parts of the resource chain.

A few months ago, WasteCare decided to take such a step by putting in place the Five S workplace organisational tool, a technique created by the car manufacturing industry to boost efficiency and effectiveness.

WasteCare managing director Peter Hunt explains: “From my point of view, I felt we were not going to be successful in this market unless we turned a recycling operation into a manufacturing operation.”

Recognising that no one in his team had the necessary expertise, he hired Graham Kemp as operations manager as he has a background in the manufacturing sector. His previous organisation built caravan homes and modular housing.

Kemp has been re-organising WasteCare’s reuse centre so that it adheres to Five S. He explains that in its basic form Five S is a workplace organisational tool.

“So if you start with chaos, you have a Five S system, and what it means is ‘a place for everything, everything in its place’. You literally go through the S’s: Sort, Set in order, Shine, Standardise, and Sustain. (See box) You implement the system, you support it, you maintain it, and what it means is you constantly improve the people, the process, the efficiency, the health and safety. It has lots of by-products but it gives you the base building blocks of an organised workplace system.”

Kemp admits the firm “wasn’t particularly organised” when he arrived, with “the bones of some quality management systems and procedures and documents” and a management structure that wasn’t ideal, and different rates of pay and shift patterns.

“You start at the beginning: organise the workplace, organise the management structure and set your systems and procedures in place and it’s like turning a big wheel. You start to turn the wheel and it rolls and rolls. It’s really a journey and we’ve only just started the journey here,” he says.

Changes to the management structure were made, working hours aligned and a structured pay system implemented and the operation is now far more organised as a result.  

Hunt says: “I don’t want to have to excuse what happened before, but what we created was really from a series of accidents – we did not go out to create what we have now got at the outset because we didn’t know what was needed out there.”

Wastecare knew there were lots of electrical products that needed remanufacturing, but didn’t know what its customers really wanted it to do.  “Yes, they wanted to get rid of the scrap but there was virtually no reuse going on, so we had to convince ourselves there was a market and then convince them that they wanted us to do that.”

Once they had grasped this, Hunt realised he needed to get his ship in order. And as Kemp explains, organisation is really the key to an effective operation: “If you can’t measure, it you can’t manage it, and to measure it you need to organise it.”

The system in place now gives workers marked floor space for walkways, storage areas, work areas and so on, so that they take ownership. Response from the staff to the new system has been “fantastic”. Staff were not incentivised but Kemp explains the indirect incentive was a safer, cleaner, more organised, better place to work.

“So you end up with a more comfortable working environment, which makes the business more successful which makes their jobs more sustainable,” says Kemp.

Hunt adds: “It is calmer, more mellow, and that should produce productivity. What’s the driver? The driver is to have a successful business. To get a successful business you have got to be efficient but you have also got to attract business. You don’t attract business if you make a second rate product.”

Kemp says modestly that he hasn’t done anything new at WasteCare: “I’ve just implemented what tools there are to a new sector. The proof of the pudding is in the numbers and we’ve just had the highest reuse figures in the time I’ve been here.”

Ensuring higher levels of reuse and securing suitable raw material is critical to the operation. WasteCare’s clients want a reliable operation and WasteCare needs a steady incoming stream of products that it can add value to and sell on efficiently.

Hunt has been surprised by the number of manufacturers who have come to the business over the past year having heard about its operation and said: “this is what we need to do”.

He explains that the way retailing in the UK is currently set up means that overseas manufacturers sell directly to the likes of supermarkets, shipping in their products by agreed dates. But stores receive a significant amount of returned products, which may just be a result of a customer changing its mind. But even if returns are only 1%, this is a significant number of items.

Hunt explains that store has to take it back - it can’t quibble - and issues a credit note. It can’t put the item back on the market because it doesn’t know if it is damaged or if a part is missing, but it is not prepared to get into an argument with the customer. It becomes the manufacturer’s problem.

These items build up in distribution company warehouses until they get to a point where the distribution company calls up and says: “You do know you are paying rent on this shipload of returned televisions?”

The retailer then rings the manufacturer and says: “Those televisions, you’d better shift them, or we are going to charge you.”

“So what do they do?” says Hunt. “Are they going to put them into a container and ship them all back to the Far East? I don’t think so. So, we can come in and get value out of them and either recycle them, recover the parts, repair them, do whatever, often re-brand them.”

He attributes the shift to reuse to a number of factors: the waste hierarchy becoming a legal requirement in 2011 and proposals for a reuse target in the European WEEE directive.

“So that has made people stop and think, ‘we’re going to have to think about reuse in a slightly different way’.”

In addition, he says that demand for second hand products has grown, and attributes this in part to the million or so people in the country with no bank account or access to credit so buy second hand.

The PAS141 standard, which WasteCare says it was the first to gain accreditation for, has helped provide a level of comfort for those in the chain – the charity taking the refurbished product or the manufacturer or retailer putting the product out – that certain standards have been met. WasteCare offers a one year warranty on its refurbished goods, and even does an extended two year warranty on certain products.

Hunt adds that there is also no conflict for retailers or brands selling high end electrical brands, as the refurbished goods are being sold to different audience. Hunt can see the business drifting towards the higher end, working with manufacturers.

“If I can get 20,000 TVs a year that are a dozen different models it is easier to set that up as a production operation, a manufacturing operation, than if I just take them out of the local CA site and I have got every age, make, model,” he explains.

Reuse is still a small part of the operation. “This industry has only just been born, it is not even on the radar in terms of volume,” he says.

“There is a lot more cost involved. I’d be scrapping a fridge for £3 or £4 but I am trying to turn that fridge into an £100 item if I can. So you are having to invest a lot more effort and energy into it to achieve that. The question is: can we do it within the price that we can sell a product?  It is a much more complex and harder process.”

What does Hunt think would help boost reuse?

“One thing that would help add value right the way down the line is to look after it after it is no longer wanted by the original owner. If you said, ‘I’ve bought my new fridge, but I’d like my old one donated to the BHF’, it is more likely to be loved after it has been picked up and taken away. The amount of damage we see done after it has been taken out of the house by the guy who has delivered the new one is incredible. By the time it gets to us it is now beyond economic repair.”

Hunt clearly wants to ensure his company is future fit and does the right thing: “We do think from a reuse point of view, electrical products lend themselves to reuse more than any other singular thing.”

And once the Five S system is established at this site wants to roll it out to other parts of the business.

 

The Five S system

Step 1: Sort

  • Go through your area and eliminate all unnecessary tools, parts, paperwork and any litter you have accumulated
  • Keep only essential items for your specific tasks
  • Red tag items that you are not sure about

Step 2: Set in Order

  • A place for everything and everything in its place
  • Label storage areas, cabinets and shelves
  • Clean and paint floors
  • Outline work areas, movement lanes, storage areas, finished product areas
  • Use shadow boards, jig racks and colour coding for tools and jigs

Step 3: Shine

  • Keep each individual work area and facility sorted (clean up) and organised
  • Requires regular cleaning, eg at the end of each shiftUse cleaning to help inspect machines, tools, equipment and supplies for problems eg lubricant leaks
  • Regular cleaning and inspecting generally will not take a lot of time and in the long run will most likely save time

Step 4: Standardise

  • “Every well thought-out process is simple” – Henry Ford
  • The good practices developed in steps 1-3 should be standardised and made easy to accomplish
  • As you learn more, update and modify the standards to make the process simple and easier
  • Use labels, signs, posters and banners

Step 5: Sustain

  • Formalise systems for monitoring the results of your Five S program
  • Continue to educate people about maintaining standards
  • Make adjustments to accommodate changes in new equipment, new products, new work rules
  • Use labels, signs and posters to help inform and educate people about your Five S program, new procedures and standards

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