{"id":14454,"date":"2016-11-13T21:07:27","date_gmt":"2016-11-14T02:07:27","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/the-internet-of-trash\/"},"modified":"2016-11-13T21:11:17","modified_gmt":"2016-11-14T02:11:17","slug":"the-internet-of-trash","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/the-internet-of-trash\/","title":{"rendered":"The Internet of Trash"},"content":{"rendered":"

In 1893, Harm Huizenga, a Dutch immigrant, pulled a cart through the streets of Chicago and hauled away trash for $1.25 per cart load[i]<\/a>. Huizenga\u2019s business grew through industry consolidation and acquisitions into Waste Management Inc. (NYSE: WM), a $14 billion firm that offers comprehensive waste management environmental services beyond traditional solid-waste hauling and recycling. Technology and digitization have introduced efficiencies into Waste Management\u2019s operating model and created new business opportunities for the firm in sustainability software and services.<\/p>\n

Deploying Technology in the Waste Collection Process<\/strong><\/p>\n

Waste Management (\u201cWM\u201d) hauled over 90 million tons of trash for municipal, commercial, and industrial customers in 2012[ii]<\/a>. The vertically integrated company maintains a large \u201chub and spoke\u201d trash collection system[iii]<\/a> with fleets of trucks collecting trash from customers along collection routes (spokes) to 297 transfer stations and 249 landfills (hubs)[iv]<\/a>. Transfer stations sort trash from reusable materials and consolidate and distribute non-recyclable materials to landfills for long-term storage.<\/p>\n

WM\u2019s traditional trash hauling business has benefited from digitization in the form of physical asset management and utilization. It has deployed smart sensors in its fleet of over 5,000 pieces of machinery across 700 locations in North America.[v]<\/a> These sensors transmit maintenance and operating information to a central software platform that allows managers to efficiently schedule maintenance and train operators resulting in \u201creduced breakdowns and costly downtime\u201d for the company.[vi]<\/a> \u00a0GPS-tracking technology implanted in WM\u2019s trucking fleet and subsequent analysis by WM managers using cloud-based logistics software enables optimization of collection routes and more efficient utilization of employees and assets as shown in figure 1.[vii]<\/a><\/p>\n

\"screen-shot-2016-11-13-at-5-07-09-pm\"<\/a>
Figure 1: Efficiencies from Fleet Optimization (Source: WM Logistics, ROI and White Papers)<\/figcaption><\/figure>\n

WM has also turned to start-ups with emerging technologies to improve its trash collection business. In 2009, WM partnered with BigBelly Solar to distribute a \u201csmart\u201d solar-powered trash compactor that can accommodate 5 times the amount of trash as a typical 35-gallon trash barrel.[viii]<\/a> When full, the unit wirelessly transmits a signal to the municipality allowing for efficient collection by WM and municipal partners.<\/p>\n

Digitization in WM\u2019s Service Business<\/strong><\/p>\n

Technology and digitization have created business opportunities for WM beyond its traditional trash collection business. Using expertise developed in its own physical asset management and GPS-fleet tracking capabilities, WM manages a logistics business that designs fleet-optimization and tracking solutions for its customers.[ix]<\/a> Similarly, WM is leveraging its own investments in security technology such as software and a security operations center to offer customers cloud-based security services.[x]<\/a><\/p>\n

Technology also has the potential to come into conflict with WM\u2019s existing businesses. WM\u2019s sustainability advisory services business unit develops environmental management systems for customers to reduce waste and environmental costs and meet sustainability goals. As part of this business unit, WM developed ENSPIRE, a web-based analytical software that tracks waste and environmental metrics including tonnage trends, waste diversion, and energy consumption in a \u201ccloud based, interactive analytic interface\u201d.[xi]<\/a> WM\u2019s waste reduction solutions directly conflict with the volume-based revenues of its trash hauling business. However, substitute revenues from deploying and servicing such software based solutions serve as an example of how a business can pre-empt a business-disrupting technology by integrating it into its business model.<\/p>\n

Additional Steps for WM<\/strong><\/p>\n

While WM has invested in biofuel and alternative energy start-ups that allow WM convert materials destined for landfills into fuels,[xii]<\/a> WM must consider investing in or acquiring start-ups that are developing IoT hardware and software that enhance its business and operating models. WM partnered with BigBelly as a product distributor to increase efficiencies in its own collection process in 2009, but BigBelly is now pursuing additional IoT capabilities such as sensors that communicate bin usage, bin content, and community messages.[xiii]<\/a> These capabilities complement WM\u2019s environmental management software and services, but may result in competition between BigBelly and WM if not properly integrated with WM\u2019s software.<\/p>\n

Similarly, the Finnish firm enevo is directly competing with VM\u2019s logistics service by offering fleet optimization software that is combined with a data collection device inside of dumpsters and trash cans. The device provides real-time trash level monitoring beamed to the cloud and accessible via a web-based platform (see figure 2).[xiv]<\/a> WM should acquire enevo or develop similar sensing hardware to expand its trash monitoring capabilities and long-term service contracts with its existing customers.<\/p>\n

\"enevo<\/a>
Enevo beacons indicate dumpster utilization to optimize collection\u00a0routes\u00a0(Source: enevo.com)<\/figcaption><\/figure>\n

WM\u2019s embrace of digitization has increased efficiency in its operating model and introduced new innovative services that complement its business model. However, the company must look to start-ups and sensor hardware to maintain an edge in the increasingly digital waste management and environmental services business.<\/p>\n

(Word Count: 754)<\/p>\n

[i]<\/a> Swanson, Stevenson. March 29, 1993. \u201cLucrative lure of garbage hauling has long been a dutch treat. The Chicago Tribune. <\/em>Retrieved from\u00a0http:\/\/articles.chicagotribune.com\/1993-03-29\/news\/9303290044_1_garbage-dutch-waste-management.<\/p>\n

[ii]<\/a> Bomgardner, Melody M. 2012. Transforming Trash: Waste Management is partnering with a diverse group of renewables start-ups. Chemical and Engineering News. <\/em>90, 45. p. 19-21.<\/p>\n

[iii]<\/a> Rogers, Heather. 2005. Gone tomorrow : the hidden life of garbage<\/em>. New Press. p. 186-188.<\/p>\n

[iv]<\/a> Waste Management. 10-K Disclosure Form 2015. Retrieved from http:\/\/services.corporate-ir.net\/SEC.Enhanced\/SecCapsule.aspx?c=119743&fid=14215151. Accessed on November 13, 2016.<\/p>\n

[v]<\/a> Van Hampton, Tudor. 2015. “Moving Data and Dirt.” ENR: Engineering News-Record<\/em> 274, no. 10: 21. Accessed November 13, 2016.<\/p>\n

[vi]<\/a> Van Hampton, Tudor. 2015. “Moving Data and Dirt.” ENR: Engineering News-Record<\/em> 274, no. 10: 21. Accessed November 13, 2016.<\/p>\n

[vii]<\/a> Waste Management. Logistics. Retrieved from http:\/\/wmlogistics.wm.com\/resource-library\/roi-and-white-papers.jsp. Accessed on November 13, 2016.<\/p>\n

[viii]<\/a> Roush, Wade. June 12, 2009. \u201cBigBelly Strikes Big Agreement with Waste Management.\u201d Xconomy. Retrieved from http:\/\/www.xconomy.com\/boston\/2009\/06\/12\/bigbelly-strikes-big-agreement-with-waste-management\/#\u00a0Accessed November 13, 2016.<\/p>\n

[ix]<\/a> Waste Management. Logistics. Retrieved from http:\/\/wmlogistics.wm.com\/solutions\/by-product\/eroutelogistics.jsp. Accessed on November 13, 2016.<\/p>\n

[x]<\/a> \u00a0Waste Management. Security Services. Retrieved from http:\/\/www.wm.com\/business\/security-services.jsp. Accessed on November 13, 2016.<\/p>\n

[xi]<\/a> Waste Management. Enspire Sustainability Services Factsheet. http:\/\/www.wm.com\/sustainability-services\/documents\/solutions\/ENSPIRE%20Information%20Sheet.pdf.<\/p>\n

[xii]<\/a> Bomgardner, Melody M. 2012. Transforming Trash: Waste Management is partnering with a diverse group of renewables start-ups. Chemical and Engineering News. <\/em>90, 45. p. 19-21.<\/p>\n

[xiii]<\/a> Clancy, Heather. 2015, February 3. \u201cBigbelly wants to be more than a smart trash company.\u201d GreenBiz. Retrieved from https:\/\/www.greenbiz.com\/article\/bigbelly-wants-be-more-smart-trash-company. Accessed on November 13, 2016.<\/p>\n

[xiv]<\/a> Enevo Products Webpage. Retrieved from https:\/\/www.enevo.com\/products\/. Accessed on November 13, 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"

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