The Hidden Costs of Low Cost Hazardous Waste Management
A global supplier of advanced materials solicited bids in 2011 from waste management solutions providers for a three-year contract. They chose a low-cost provider, but they re-bid the work halfway through the contract due to poor service delivery. US Ecology was awarded the new contract in 2013 and has, since then, alleviated the customer’s frustrations while adding new value to the waste management relationship.
In 2011, a global supplier of advanced materials issued an RFP to select a provider for a three-year total waste management contract. Seeking to maximize value, the company ultimately chose a relatively low-cost service provider to administer the program. Unfortunately, value is not what they found in the ensuing relationship, as 18 months after the contract started, the customer sought new project bids due to frustration with their incumbent provider.
During this second bidding process in 2013, US Ecology was awarded the total waste management program based on the company’s comprehensive waste management capabilities, national footprint and reputation as a company that prioritized customer service. The new contract between US Ecology and the advanced materials company went into full effect in March 2015.
The advanced materials company that initiated the bids had faced a variety of problems when dealing with the previous waste management solutions provider. Major concerns that had tarnished the relationship included:
- Excessively long turnaround times – When facilities had undocumented waste streams that needed to be profiled, the service provider took months to handle it, responding to needs weeks beyond expectations.
- Inconsistent account management – The previous provider had different representatives managing accounts depending on the region in which facilities were located, creating confusion around points of contact.
- Ongoing billing issues – The customer was invoiced up to four months late by the low-cost waste management provider, and they were also contacted numerous times by third-party vendors seeking payment on outstanding bills from the waste management company.
- Lack of reporting – The service provider did not provide value-added reporting, focusing on simply picking up waste when requested instead of providing the data needed to discover opportunities for efficiency.
US Ecology immediately set to work looking for opportunities to alleviate customer frustrations with the state of their waste management program that had come about during the low-cost provider’s tenure.
KPIs and Commitments
A benchmark “voice of the customer” survey was conducted in 2013 to track the status of EH&S facility leads’ feelings toward the state of waste management practices prior to the start of US Ecology’s contract. US Ecology began by committing to receiving improved satisfaction scores compared to this benchmark survey when a new satisfaction survey would be issued in late 2016. US Ecology also established a goal of having all waste destined for a US Ecology facility approved within 24 business hours (assuming sufficient information to approve the waste stream) and dedicated themselves to timely vendor payment to address known pain points.
The customer began seeing immediate benefits from US Ecology’s centralized account management structure. Instead of dealing with various regional contacts, the customer was given a single point of contact for all of their questions. As a result, there were fewer breakdowns in communication than with the previous provider, improved customer service when one person answers for the management of the entire account, and more opportunities to discover synergies and improvement options based on a holistic account view. While the customer had been frustrated with the low-cost waste management provider’s high employee turnover rate, which US Ecology’s employees were recognized as reliable assets to the company that were available when the customer needed access to them.
Unlike the customer’s previous waste management provider, US Ecology offered robust reporting to the customer, allowing them to know information such as exact waste volumes, how waste was treated, where it went, what compliance considerations were factored in, and more. The customer also received regular certificates, D.O.T. shipping information, trends charts and efficiency metrics by facility—how many pounds of waste were being generated compared to sum productivity at the facility, for example. As a result, the customer now had insight into how different facilities performed versus specific other plants or within a certain category. These reports could be customized based on top priorities for the customer, and provided the data necessary to improve the customer’s operations—data that never had existed before.
Because of the value US Ecology has been able to provide beyond what the customer received from their previous waste management service provider, there have been no complaints to date with regard to level of service, turnaround time, payment processes or otherwise. US Ecology’s capabilities and national footprint have been important to the relationship, but it has been the company’s different philosophy around customer service that has most set it apart from low-cost waste management service providers, according to key customer stakeholders. It has become clear now that the appealing price point of a low-cost provider is not indicative of the value that a strong partnership can provide.
For information on US Ecology’s total waste management solutions, call (800) 592-5489 or go to www.usecology.com.