Construction Waste - A learning game?

How do Irish construction companies compare with each other and with construction companies in other countries in respect of their knowledge about construction waste? This article examines the areas which are worth observing to minimise construction waste and is written by John Donnelly who works with almost 60% of Irish construction companies to help them manage and minimise their materials waste on construction sites. John Donnelly contrasts some Irish procedures with UK and offers plenty of food for thought to Irish companies to help them to continue the war on waste. John Donnelly runs his own construction training & consultancy company and has trained over 6000 construction professionals in Ireland - North and South, England, Scotland, Malaysia and Hong Kong. His work on Construction Waste and Construction Purchasing Systems has been published in Ireland, Hong Kong, Malaysia and the UK.

Waste Awareness

Construction companies need to become aware of the real financial and environmental cost of construction waste. In order to appreciate this it helps to have your company and their employees assessed as to their knowledge and understanding about construction waste.
Over the past six years I have met with thousands of construction professionals worldwide to carry out waste knowledge assessments. Knowledge of the central issues about waste vary from 11% to 55% to 75%.

That is all the more startling when one considers the economic cost of waste to Irish contractors. How are you measuring waste and its direct and indirect costs. How many contractors examine their various strands of waste?
The strands include:

• Poor requisitioning system (if any).
• Wasted materials.
• Over ordered materials.
• Damaged materials.
• Over specified materials.
• Excess delivered materials.
• Buying for Subcontractors and not controlling the issue and use of the materials.
• Providing waste skips for Subcontractors materials.
• Packaging costs.
• Waste skip costs.
• Theft and pilferage-materials are often easy prey.
• Poor storage facilities.
• Excess stocks of materials, which are often readily available.
• Non monitoring of materials used Vs what should have been used.
• No examination of the recycling opportunities locally.
• No maximising on the opportunity to sell certain surplus materials.
• Poor management of materials planning with excessive collections of material at top prices and with the use of company transport and staff costs.
• Poor uses of resources on site to reuse materials instead of dumping.
• Often no waste management plan in place.
• No company policy in place in writing.
• No signage on site to indicate contractors are serious about minimising waste.
• Waste not being on the agenda at regular site meetings.
• No arrangements made to engage subcontractors on a waste minimisation basis.

These are but some of the areas in need of examination by contractors to establish if indeed they are managing their materials properly and avoid waste related costs.
Can you afford to budget for the actual waste costs you are experiencing? If you had budgeted for the actual cost would you be as successful with your tenders to your clients?
The obvious answer is no. But if you are not budgeting for waste and are encountering it then it is having a marked impact on your profits.
If a contractor had a turnover of €10m and expected a profit of 6% or €600,000 and has experienced a €90,000 cost impact on profits through waste skip costs which was not budgeted for then his profit level will be reduced by €90,000. The company simply did not budget for €90,000 for waste skip charges.
Additionally the company may not budget sufficiently for the amount of material, which is deposited in waste skips on a daily basis. If a company spends €90,000 on waste skip charges annually on one project and uses 20 tonne skips and makes no effort to separate waste, thus ending up with mixed waste, it is very likely that many of those skips will be costing €1200. This is because the mixed material is so contaminated it is only fit for landfill.
To spend €90,000 per annum on a €10,000,000 project equates to a waste skip ratio of 0.9% To spend €90,000 on skips costing €1200.00 means that in one year you have used 75 skips or three every two weeks. Therefore there is little evidence of waste on site as it is moving out the gate so often. This example is not necessarily yours but it happens and it may be happening on your site.
So let us begin by checking a few costs.

Establish how much your company spent in a year on waste skips.
Establish the company turnover (excluding land purchases)

The figure of 0.9% should send shivers down the spines of any construction company.
Note - No muck shifting costs are included.
Note - No demolition disposal costs are included.
Both of these areas of activity are defined costs and should not be included in the waste skip exercise. Best practice in this type of measuring should find your company in the 0% to 0.18% category. If you are spending over 0.18% you may need to examine site practices.

In order for contractors to minimise their waste related costs it is essential to take action - to set targets to measure and monitor waste and to constantly seek reports on these costs.
The waste skip ratio for skips to turnover should be 0.18% or less. Anything more is uneconomic and leads to your company being uncompetitive. Contractors need to know what the ongoing waste related costs are rather than waiting until a contract is finished only to realise that they have spent 0.9% on waste skips only. Site staff need to be well prepared in the planning and ordering/requisitioning of building materials otherwise the economic cost of leaving it too late is often 15% of the cost of the materials.

Economic effect of late ordering - 15%

Have you ever visited a corner store for vital food when the fridge was empty? I am sure you realise that such shopping has an economic price tag as well and it is no different with the late buying of building materials. Many Irish contractors live from day to day with respect to organising their material requirements, hence the long queues at builder's providers and hardware merchants nationwide and the added cost of a member of staff doing the collecting. This chore of collecting may take up to two hours and is possibly as expensive as the materials being collected. These are wasteful habits and costly on the bottom line.
With respect to monitoring the quantity of materials used on site how many contractors know the true percentage of waste of building materials. Would 15% on bricks surprise you? Would 35% on mortar be acceptable? Would 8.5% on concrete roof tiles be within your budget? Would 12.5% be acceptable for the most wasted material on the planet - timber?

When these materials are wasted they inevitably end up in a waste skip. Many of these large 20 tonne skips are also used as dumping grounds by site staff and the general public and eventually become contaminated. Many waste disposal companies have no option but to go direct to landfill with such loads. A lot of these waste skips contain fresh air and many 20 tonne skips are full to the brim and contain only 3 tonnes of material. Much of the material has become wet thus adding to the weight. Many companies also charge a fixed fee for the skip, a weight charge and a Government levy. Average cost per tonne ranges up to €300.00 for your wasted material.
Check your own skip charges:

Conclusion

Materials are expensive to buy but can cost as much as per tonne to send to landfill.