Atlantic Partners, Inc

A different perspective on Green Business

In early 2005 I was fortunate to have been engaged in a project at the World Wildlife Fund (WWF) in Washington, DC. We were teaming with a national provider of real estate management services (which ended up being the successful bidder for the WWF project), and were able to get a first-hand view of how a group like WWF thinks about sustainability. This was pre “Al Gore” mainstream sustainability focus, and WWF was driving their vendors in the direction of wind powered energy programs, specialized building designs that maximize solar energy retention, and environmentally friendly facility supplies, like green light fixtures, carpeting comprised of recycled components , and cleaning materials that were non chemically based. It was a revelation; and I had flashbacks to the ecology flags and symbols that were popular when I was a child.

For years organizations have deployed the “gratuitous” recycle bin by their copy machines, and in the late 80’s and early 90’s touted their use of paper with “recycled content”, and I don’t want to belittle the importance that small gestures have on the big picture of sustainability. But, we know organizations can do more, and what they likely do not realize is that by changing (improving) the way they manage areas that support their core business functions they can help the environment and also reduce their overall operating costs. So where do you start?

We look at sustainability a little differently than most groups. Although we rent hybrid cars when we can, purchase green products for our office, and support organizations that have similar values, we also look at the waste that comes from inefficient business practices. But what does that mean when it comes to “carbon footprint”? As an example, if you’re an organization that sends out mail to your prospective and current clients on a regular basis, there are three visible core costs that make up those mailings:

1. The materials used to communicate (paper, envelopes, etc.)
2. The labor to create and distribute the communications (your mailroom, copy room, or administrative team)
3. The technology that generates the communications (copiers, mail machines, etc.)

The “invisible” costs (at least those less thought about) are:

1. The electricity to run the machines that create the communications.
2. The power to get your communications to your clients/prospects (planes to deliver express packages, letter carriers driving vans, etc.); and finally,
3. Waste

Each of the previously mentioned items is necessary to create and distribute communications to your clients, but what about waste? Recognizing where waste lies and how to measure/mitigate it will both save your organization significant amounts of money, while improving your client’s satisfaction with your services, and positively affect the environment. You’ve likely heard of some or even all of these areas before, but what have you done to change the way you do business? Has anyone bothered to measure the cost to your organization, or to identify the resources that can assist you in improving those processes? Have you considered the impact those inefficient processes has on the environment as well?

Finding the waste

Here is one example of how an area as simple as mail, and its mismanagement, affects the environment and a real organizations bottom line:

A modest size organization based on Florida sends out regular correspondence to their clients, while also sending out letters (and electronic communication) to potential clients to generate revenue, and cross sell their services. Monthly, that organization sends about 50,000 letters in the form of invoices, and about 100,000 letters to potential clients. They send all their mail “first class” or “first class presort”, meaning they are paying “list price” for postage, or getting a little discount for helping the Postal Service do their job. Of the 150,000 pieces of mail they send, some of it does not reach its destination due to someone moving, or the organization simply having a “bad address” on file. Since the organization is not perfect, they also sometimes make mistakes when they create their correspondence, and thus have to discard some incorrectly created letters and the accompanying sales literature that is sent with it. How did waste affect this organization and the environment?

The company was spending (not monitoring or measuring) about $690,000 of postage annually, which did not include the cost they incurred through express mail items (representing an additional $100,000). Although they had a contract with a national express carrier, no one was managing the contract, so letters and packages were sent however the end user desired. To their credit, they were monitoring how much mail was returned because of bad addresses, but did not have a way to deal with updating their database to fix the problems. The cost incurred by return mail was about $50,000 annually ($30,000 to create the mail the first time, and $20,000 to mail it again to the right address; not all of it was resent). Overall, the company had 3 people that managed the operation.

Total cost to run this one area within the organization (exclusive of paper that was not accounted for as waste): about $1,000,000 annually.

Cost savings after processes were changed: $141,000.00. Where were the cost savings derived? Process changes related to management and measurement of express mail (over night carriers); reduction in postage cost through more effective use of presort; reduction in waste from return mail; reduction in labor through more efficient workflow.

Impact on the environment: We estimate that by improving the return mail category alone, the company reduced waste equivalent to 3 metric tons or carbon, or put in simpler terms, use of an average passenger car for two years.

Situations like these present a compelling argument for a re evaluation of each of the areas within your business support areas; areas such as copy services and document creation, mail management services, and records and information management services.

If you would like more information about ideas where you can find the hidden costs within your operations, click here to subscribe to “The Trusted Advisor”; the quarterly newsletter from Atlantic Partners, Inc.