Everyone is looking to get 1% better every day! If the scrap metal recycling program you have at your fabrication shop, plant or warehouse hasn’t been revised in years now is a good time to review the processes in place that make for a scrap metal recycling program that is optimized for success.
Here are the Top 5 things to review to make sure you have the best scrap metal recycling program possible.
- Does the metal you are currently running match up with your scrap metal recycling program categories?
Your production changes as your customer’s needs change, and often times scrap programs don’t keep up with all of the changes. What once made sense to sort and segregate may not make sense anymore and in some cases while throwing metal all together used to be a good plan, it may not be the most efficient way to run the program.
The key to understanding all of this is a clear pricing formula based on the metal you are running. Often times this information is on a purchasing manager’s desk and that information may not make it to the shop foreman responsible for the scrap metal program. Knowing how much A36, AR 400 or any of the alloys in between that you are running can make a huge difference in maximizing the revenue for your scrap. If one machine is dedicated to one alloy or one process a customized plan to maximize revenue for that dump hopper may be the way to go. Is your stainless steel 304, 316 or even 310 or Inconel? The pricing by grade varies so much that it certainly makes sense to sort these grades and having that understanding and communication with your scrap metal partner is crucial to making as much money as possible on your program.
On a metals assessment this is one of the first things Sahd Metal Recycling’s team will look for.
- Do you have an upfront formula pricing worksheet and do you understand how pricing is established?
Many customers have too much going on to get into the details of scrap metal pricing, but understanding the categories of the formulas and how the formulas are derived can make you a more knowledgeable customer and can help you make decisions on when to best sell your metal.
Our scrap metal formulas are based on indexes provided by Fastmarkets and Metal Exchange Direct. Fastmarkets publishes a certified mill order price per month for steel and one that updates weekly for stainless steel. We find these categories to be the most effective and responsive to real world trends. For copper and aluminum based metals we use Comex and London Metal Exchanges, with information from Metal Exchange Direct. We are happy to give our customers access to this information at any time as we want them to know the value of their metal before they sell it to us.
Our team also sends out a monthly update with an overview on the overall scrap metal market and specific pricing for each alloy you produce in your plant that we can identify with an appropriate formula.
The market will bounce from day to day and month to month, but if you have an established formula price tied to a percentage of the market you will always know where you stand during the fluctuations. For example if your yellow brass is priced at 60% of the Copper LME it will be 2.40 per pound when copper is at $4.00 per pound and 1.20 per pound when copper is at $2.00 per pound. The key is that the formula percentage is consistent as the market ebbs and flows, protecting you from not knowing the level your metal will be priced at when you sell your material.
- Are you getting value for your materials mixed in the dumpster, and are you getting paid promptly?
The reason the Sahd Metal Recycling team values metal assessments so much is because we like to give our customers the greatest value for their metal. If your team is too busy to sort metals or if the price difference doesn’t make that process worth it we can work with you on giving you value for your mixed loads that we sort!
Many customers just don’t know this possibility exists, that a company will pay them for the materials in the dumpster if easy sorting can be achieved. Our team of experts can come out and assess whether an extra dumpster, self-dumping container or other resource can be deployed to pay the premium price to have the material sorted. If this is not optimal, as we mentioned we can sort and give credit for higher dollar items in the load.
To know this of course you need proper load for load ticketing with prompt payment. Many customers unfortunately need to wait for the money for their scrap—ours are paid promptly and given itemized tickets showing the contents of the container and the value for each material type.
- How’s the service, and why does it matter?
A couple days, a week? We’ve heard even longer time periods for customers waiting to get their dumpsters swapped. Plant managers and shop supervisors never have enough space! If they do find more, they will use it quickly! Whether it’s a finished product that is yet to ship, a reorganization for a new machine or an optimized shop process to eliminate bottlenecks, there is little to no room on the shop floor or often even in the parking lot.
With space at a premium you need a scrap metal partner who values quick and reliable service. It is so important to everything we do, so much so that we live by a 24 hour turnaround guarantee that we deliver to our customers. While that is the standard, we strive for a much higher level of service and often our customers see us within a few hours of notifying us they need service.
Whether it is a rolloff container, skid or gaylord pickup or small container stakebody run, you can count on us to show up quickly to get the scrap metal out of your way so you can focus on production and having a lean shop floor. If this is not a priority often organizations will suffer from extended lead times, increased risk of trips, falls and other worker’s compensation injuries and a general lower level of performance.
Drivers, owners and managers are all accessible to our customers, because we know service is important and with so many items on your mind you may forget about a paving project, service before a holiday, storm or even a corporate visit! Because you have your relationship with our team we are invested in your success, and we know how important reliable service plays into that success!
- Do you know your data? What gets measured gets improved!
Our customers have multiple streams of data in their businesses and there is no reason scrap metal should not be one of the data sets that is considered when running your organization.
Our team reports on each load and sends out monthly reports stating totals for each pickup that comes with payment. In addition, we produce an annual report with totals by alloy and a sustainability report which highlights your scrap metal by commodity and the CO2 offset of the metal recycled and not dug into the ground for.
How can this reporting help your team? First scrap volumes can often be a sign of unoptimized program nesting on lasers, too many mistakes which could point to a programming or mechanical error and a problem with inventory management if too many whole lengths are scrapped. Companies that measure scrap volume often see better material utilization rates and are often places where the continuous improvement philosophy leads to accelerated growth and better ideas.
