Baxter CVG Case Study

Chapter 3: Is Solid Waste Reduction Economically Beneficial?

Baxter Healthcare Corporation Cardiovascular Group (CVG), the focus of this report, is a company that has a seven-year track record in solid waste reduction programs. This report will examine CVG’s solid waste reduction program (SWRP) and determine if it is economically beneficial.

CVG began implementing its solid waste reduction program in 1990. Using 1989 as the baseline year, Figure 3.1 demonstrates CVG’s success in reducing municipal solid waste disposal. In 1989 CVG disposed of 1350 tons of municipal solid waste. This amount was reduced to 393 tons by the year 1995, resulting in a $72,390 savings in disposal costs alone. This does not include the savings from packaging reductions.

*1997 Data is projected

The Integrated Waste Management Hierarchy

In order to provide some background for solid waste reduction, a discussion of the Integrated Waste Management (IWM) Hierarchy will provide a good basis. The IWM Hierarchy is a solid waste management approach that many industrialized nations, including the United States, officially endorse. The 1976 Resource Conservation and Recovery Act (RCRA) defines this hierarchy as the following list of management options in order of priority (CIWMB Definitions 1996, P.1):

1) Source Reduction (Waste Prevention) - Any action undertaken by an individual or organization to eliminate or reduce the amount or toxicity of materials before they enter the municipal solid waste stream (i.e., reducing packaging). This action is intended to conserve resources, promote efficiency and reduce pollution.

2) Reuse - To use something over again in its current form, without breaking it down into a raw material (i.e., retreaded tires).

3a) Recycling - The processing of collecting, sorting, cleansing, treating, and reconstituting materials that would otherwise become solid waste, and returning them to the economic mainstream in the form of raw material for new or reconstituted products which meet the quality standards necessary to be used in the marketplace.

3b) Composting - The controlled biological decomposition of organic materials such as leaves, grass clippings, brush, and food waste into a soil amendment.

4) Incineration - Whereby waste is taken to a certified incinerator, and frequently converted to electricity.

5) Landfill – A land waste disposal site that is designed to minimize water pollution from run-off and leaching.

CVG Source Reduction

One form of source reduction is packaging reduction. Packaging reduction has been a part of CVG’s solid waste reduction program since 1991. One example of a packaging reduction program at CVG is the Swan-Ganz Packaging Automation Project. This project reduced the weight of packaging by 40%, and the cost of packaging material by $.72 per unit. With an annual volume of 1,247,000 units, this created annual savings of $957,840. Baxter Healthcare Corporation is so committed to packaging reduction that it has created an award called the "Lewis Erwin Environmental Packaging Award" to inspire departments to produce innovative packaging.

Since 1991, CVG has been able to divert an estimated 1138.7 tons of MSW as a result of packaging reductions. This has resulted in considerable savings. As Figure 3.2 demonstrates, from 1991 to 1997 CVG has been able to save an estimated $5,861,891.90 from reduced packaging.

*Based on company estimates

Another source reduction policy that CVG has implemented is a 25% two-sided copying policy. By copying 25% of its documents on both sides, CVG has been able to save 5440 reams or 13.6 tons of paper per year.

Like many companies, CVG has gone to using E-mail for inter and intra-office communication. This policy, resulting in a reduction in the use of paper, has saved CVG an estimated 15.6 tons of disposal between 1994 and 1996.

CVG Reuse

Reusing a waste stream component is another way to reduce disposal. One such typically large component of an organization’s waste stream are wood pallets. CVG returns the majority of its wooden pallets for reuse. Since 1991, CVG has reused an estimated 80.3 tons of wood pallets and has thereby avoided a substantial amount of disposal.

Another way in which an organization can reduce its disposal is through donating its used office equipment and furniture. CVG donates much of its used office equipment including computers, desks, chairs, tables, lamps etc. to local school and charities. Since 1993, CVG has donated an estimated 25 tons. By donating its used office equipment, CVG not only benefits the local community, but also reduces its disposal.

CVG Recycling

Recycling is another way in which CVG reduces its disposal. CVG has comprehensive paper, cardboard, scrap metal, plastic and aluminum recycling programs. Since 1992, CVG has been able to recycle an estimated 686.9 tons of mixed paper, 407.7 tons of cardboard, 189.9 tons of scrap metal, 82.6 tons of plastic, and 1.3 tons of aluminum.

CVG Composting

Composting is another form of MSW reduction that is utilized by CVG. CVG’s landscaper participates in "grasscycling", and hauls all of the excess green waste to a green waste facility where the waste is composted or mulched and then reused. Grasscycling is a process of leaving cut grass on the lawn where it will decompose and add nutrients (Business Guide 1996: P.18). In 1997, CVG diverted an estimated 42.6 tons of grass clippings and green waste.

CVG Solid Waste Reduction: A Chronology

In order to demonstrate the progression of CVG’s solid waste reduction program, a chronological analysis has been completed. Starting with 1989 as the baseline year, a solid waste characterization has been completed for every year since the inception of the CVG’s solid waste reduction program. A more in-depth analysis is presented for 1997.

CVG’s 1989 Solid Waste Characterization

1989 will be used as the baseline year, as CVG had yet to implement any "real" solid waste reduction policies. Hence, very little in the way of solid waste reduction was accomplished for that year. As Figure 3.3 demonstrates, of the 1390 tons of generation in 1989, 1350 tons (97%) were disposed, only 3% were recycled and no source reduction was accounted for that year. Disposal costs for 1989 amounted to $99,190. Figure 3.4 demonstrates CVG’s 1989 solid waste characterization.

Figure 3.3 1989 Calculations

Generation = Disposal + Diversion (Source Reduction + Recycling)

Generation = 1350 tons + 40 tons

Generation = 1390 tons

Diversion rate = Diversion/ Generation

Diversion rate = 40 tons/ 1390 tons

Diversion rate = 3%

CVG’s 1990 Solid Waste Characterization

In 1990 CVG’s solid waste reduction improved minimally. As Figure 3.5 demonstrates, CVG was able to recycle *50 tons of waste for a diversion rate of 4%. Still, 96% of CVG’s waste went for disposal and no source reduction was accounted for that year. Figure 3.6 demonstrates CVG’s 1990 solid waste characterization.

*No specific data concerning types of recycled materials is available for 1990.

Figure 3.5: 1990 Calculations

Generation = Disposal + Diversion

Generation = 1300 tons + 50 tons

Generation = 1350 tons

Diversion Rate = Diversion/ Generation

Diversion Rate = 50 tons/ 1350 tons =

Diversion Rate = 4%

CVG’s 1991 Solid Waste Characterization

Packaging reduction began as a corporate policy for Baxter Healthcare in 1991 and in the first year CVG was able to reduce packaging by 90.2 tons. In this first year alone, CVG saved an estimated $366,206 in production costs due to these packaging reductions. Recycling programs were also expanded in 1991 with an estimated 175 tons of materials recycled. Due to these improvements in solid waste reduction, Figure 3.7 demonstrates that CVG’s 1991diversion rate increased to 18%. Figure 3.8 demonstrates that CVG’s recycling rate increased to 12% and its source reduction rate increased to 6% in 1991.

Figure 3.7: 1991 Calculations

Generation = Disposal + Diversion (Source reduction + recycling)

Generation = 1150 tons + 90.2 tons + 175 tons

Generation = 1415.2 tons

Diversion Rate = Diversion/ Generation

Diversion Rate = (175 tons + 90.2 tons)/ 1415.2 tons

Diversion Rate = 18%

CVG’s 1992 Solid Waste Characterization

CVG continued its packaging reduction program in 1992 with 60.8 tons of source reduction. This saved CVG an estimated $246,815 in production costs. CVG also reused an estimated 21 tons of wood pallets in 1992. Total source reduction from these programs amounted to 81.8 tons.

Recycling programs were expanded in 1992 with 75 tons of mixed paper recycling, 50 tons of scrap metal recycling, 46 tons of cardboard recycling, and .6 tons of aluminum recycling. Total recycling from these programs amounted to 171.6 tons. As Figure 3.9 demonstrates, CVG’s 1992 diversion rate increased to 19%. Figure 3.10 demonstrates that CVG’s recycling rate increased to 13%, while its source reduction rate remained at 6% in 1992.

Figure 3.9: 1992 Calculations

Generation = Disposal + Diversion (Source reduction + Recycling)

Generation = 1100 tons + 81.8 tons + 171.6 tons

Generation = 1353.4 tons

Diversion Rate = Diversion/ Generation

Diversion Rate = (171.6 tons + 81.8 tons)/ 1353.4 tons

Diversion Rate = 19%

CVG’s 1993 Solid Waste Characterization

CVG Packaging reductions for 1993 were 71.2 tons, saving CVG an estimated $288,975 in production costs. Wood pallet reuse amounted to 14 tons, and an estimated 5 tons of desks and chairs were donated to local schools and charities. Total source reduction from these programs amounted to 90.2 tons.

Recycling programs for 1993 were further expanded with 88.6 tons of mixed paper recycling, 78 tons of cardboard recycling, 57.8 tons of scrap metal recycling, 16.9 tons of plastic recycling, 1.1 tons of metal drum recycling, .81 tons of glass recycling, .2 tons of aluminum recycling and *19.4 tons of other recycling. Total recycling for 1993 amounted to 262.8 tons. As Figure 3.11 demonstrates, CVG’s diversion rate increased substantially to 34%. Figure 3.12 demonstrates that CVG’s recycling rate increased to 25%, while its source reduction rate increased to 9% in 1993.

*Based on company records

Figure 3.11: 1993 Calculations

Generation = Disposal + Diversion (Source Reduction + Recycling)

Generation = 700 tons + 90.2 tons + 262.8 tons

Generation = 1053 tons

Diversion Rate = Diversion/ Generation

Diversion Rate = (262.8 tons + 90.2 tons)/ 1053 tons

Diversion Rate = 34%

CVG’s 1994 Solid Waste Characterization

In 1994, CVG had its best success with its packaging reduction program saving 305.5 tons of materials and an estimated $1,240,000 in production costs. Wood pallet reuse amounted to 3.5 tons and an estimated 5 tons of desks and chairs were donated to local schools and charities. 1994 was also the first year of the implementation of E-mail, which created to an estimated 5.2 tons of paper source reduction. Total source reduction from these programs amounted to 319.2 tons.

CVG recycling programs continued to improve in 1994 with 190.8 tons of mixed paper recycling, 91.1 tons of cardboard recycling, 22.5 tons of scrap metal

recycling, *15.2 tons of plastic recycling, .3 tons of aluminum recycling and .2 tons of glass recycling. Total recycling for 1994 amounted to 320.1 tons. As Figure 3.13 demonstrates, CVG’s diversion rate rose considerably to 58%. Figure 3.14 demonstrates that CVG’s source reduction rate increased substantially to 29%, while it’s recycling rate increased to 29% in1994.

*Based on annual averages

Figure 3.13: 1994 Calculations

Generation = Disposal + Diversion (Source Reduction +Recycling)

Generation = 475 tons + 319.2 tons + 320.1 tons

Generation = 1115.7 tons

Diversion Rate = Diversion/ Generation

Diversion Rate = (320.1 tons + 319.2 tons)/ 1115.7

Diversion Rate = 58%

CVG’s 1995 Solid Waste Characterization

CVG source reduction activities remained for the most part constant in 1995 with 305.5 tons of packaging reductions, 12.8 tons of wood pallet reuse, 5

tons of office furniture donations and 5.2 tons of paper reduction from E-mail. Total source reduction from these programs amounted to 328.5 tons.

Recycling activities for 1995 decreased compared to 1994 with 104.6 tons of mixed paper recycling, 96.2 tons of cardboard recycling, 14.1 tons of scrap metal recycling, and 14.5 tons of plastic recycling. Total recycling for 1995 amounted to 229.4 tons.

Although the amount of diverted materials decreased in 1995 compared to 1994, Figure 3.15 demonstrates that CVG’s diversion rate still increased to 59%. This was due to a decrease in disposal by 82 tons. This decrease in disposal can be attributed to increased source reduction and/or reductions in production. Figure 3.16 demonstrates that CVG achieved its highest source reduction rate with 35%, while its recycling rate decreased to 24% in 1995.

Figure 3.15: 1995 Calculations:

Generation = Disposal + Diversion (Source Reduction + Recycling)

Generation = 393 tons + 328.5 tons + 229.4 tons

Generation = 950.9 tons

Diversion Rate = Diversion/ Generation

Diversion Rate = (229.4 tons + 328.5 tons)/ 950.9 tons

Diversion Rate = 59%

CVG’s 1996 Solid Waste Characterization

Source Reduction Activities in 1996 continued to remain mostly constant with 305.5 tons of packaging reductions, 12.8 tons of wood pallet reuse, 5.2 tons of E-mail paper reduction, and 5 tons of office equipment donations. Total source reduction for 1996 amounted to 328.5 tons.

Recycling Activities in 1996 decreased with 61.7 tons of mixed paper recycling, 54 tons of cardboard recycling, 17.3 tons of scrap metal recycling and 14.3 tons of plastic recycling. Total recycling for 1996 amounted to 147.3 tons. As Figure 3.17 demonstrates, CVG’s 1996 diversion rate decreased slightly to 55%. Figure 3.18 demonstrates that CVG’s source reduction rate increased to 38%, while its recycling rate decreased to 17%.

Figure 3.17: 1996 Calculations

Generation = Disposal + Diversion (Source Reduction + Recycling)

Generation = 400 tons + 328.5 tons +147.3 tons

Generation = 875.8 tons

Diversion Rate = Diversion/ Generation

Diversion Rate = (147.3 tons + 328.5 tons)/ 875.8 tons

Diversion Rate = 55%

1997 A More In Depth Analysis

The next page contains a waste reduction and recycling audit report, which projects CVG’s solid waste characterization for 1997. This format is currently being used to conduct solid waste assessments throughout California.

City of Irvine Waste Reduction and Recyling Audit Report
Auditor Michael Megremis

General Information

Name of Business: Baxter Healthcare CVG
Address: 17221 Redhill Avenue
Contact: Environmental Manager
Type of Business: Researcher and Manufacturer of Healthcare Equipment
Standard Industrial Classification Code (SIC): 3841
Number of Employees (FTE): 120

Table 3.1: 1997 Waste Generation Summary

Disposal Information

One 40 cubic yard compactor is emptied once per week. One 4 cubic yard bin is emptied once daily, and three 4 cubic yard bins are emptied once per week. Based on monthly averages, calculated annual disposal amounts to 350.8 tons.

Current Source Reduction And Reuse

Packaging Reduction.  Based on historical data, estimated packaging reduction amounts to 305.5 tons from 1989 levels.

Wood Pallet Reuse. Based on monthly averages, an estimated 14 tons of wood pallets are reused annually.

25 Percent Two-Sided Copying Policy. CVG saves an estimated 13.6 tons of paper by copying 25% of its documents on both sides.

E-mail.  An estimated 4000 Emails are distributed throughout the company on a daily basis, which amounts to an estimated 5.2 tons of paper saved annually.

Calculations: E-mail Quantification Method

Reduction in tons/year = (Avg. # of sheets/day) x (# of business days/year) / 200,000 sheets per ton

Reduction in tons/year = 4000 x 260/ 200,000 = 5.2 tons

Furniture Donations. CVG donates an estimated 5 tons of desks, chairs, and other office furniture to local schools.

Current Recycling Activities

Paper Recycling. CVG has four 4 cubic yard mixed paper bins which are emptied 3 times per week. Calculated annual paper recycling amounts to 166.2 tons.

Cardboard Recycling. Based on monthly averages, calculated annual cardboard recycling amounts to 88.4 tons.

Composting (Green Waste). Estimated annual "grasscycling" and green waste recycling amounts to 42.6 tons.

Scrap Metal Recycling. .Based on historical averages, calculated annual scrap metal recycling amounts to 28.2 tons.

Plastic Recycling. .CVG uses a wide array of plastics in the manufacture of its products. Based on historical averages, calculated annual plastic recycling amounts to 21.7 tons.

Fluorescent Tube Recycling. Based on monthly averages, calculated annual recycling amounts to 2 tons.

Aluminum Recycling. Aluminum can recycling amounts to an estimated .2 tons per year.

Recommended Programs

Create 50 percent double sided copying policy. An estimated 13.6 tons of additional source reduction would be attained with the implementation of a 50 percent double-sided copying policy.

Compost Food Wastes. By separating its food wastes from other general waste in the cafeteria, CVG could save an estimated 26 tons per year in disposal.

Serve As a Peer Model for the Industry. CVG could describe its waste reduction and recycling programs in annual professional meetings

Potential Diversion. With the implementation of the recommended programs, CVG could see an increase in diversion from 66 percent to 70percent.

Analysis of Data

The data put forth in this chronological analysis demonstrates the evolution of a successful SWRP. As Figure 3.19 demonstrates, CVG was able to increase its diversion rate from 3% (1989 level) to 66% (1997 level), and save nearly $6 million dollars by reducing packaging and disposal. The next chapter will go into more detail concerning the economic benefits of CVG’s solid waste reduction program and demonstrate a cost-benefit analysis.

Last updated: November 29, 2007