Flexible planning at Indaver keeps the cycle going
Since the corona crisis and the energy crisis, a lot of supply chains are at risk. Many producers are therefore having to adjust their processes and plans. This effect can also be felt in the waste streams processed by Indaver.
As a waste treatment company, Indaver takes care of both our household waste and the various waste streams of industrial players. In practice, this means a daunting diversity of materials with sometimes hazardous properties. Indaver is always looking for safe and efficient ways to process them, recover them as new raw materials or generate useful energy. In doing so, it calls on in-house installations and third-party facilities. That is a complex puzzle to make, even in the best of circumstances. It does not get any easier when the whole of society is shaking on its foundations, as in the case of a global pandemic or war in Europe.
"Our supply chain is completely different from that of a conventional company," says Annick Van Driessen, International Director Supply Chain at Indaver. "It is the production at the customer's site that determines the supply to our facilities. Household waste is quite predictable under normal circumstances. Flows from industrial customers are more difficult to predict. These are closely linked to their production campaigns, plant shutdowns and their supply chain. Since the corona crisis, industrial supply chains around the world have been challenged. A well-known example is the shortage of computer chips, which disrupted the production of new cars, among other things."
In what way does Indaver feel the impact of these disrupted supply chains?
"We used to see fairly stable production in Europe in relation to processing capacity. Since the corona crisis, that has changed. There are several reasons for this. For example, many of our customers were forced to get their raw materials from other suppliers. Often, they could no longer get the chemicals they usually use and had to adjust their processes. As a result, the waste streams we receive are also no longer the same and we sometimes have to use different processes or facilities to process them. We saw that especially in the chemical sector."
"You can also see that volumes fluctuate a lot. Some of our big customers are pharmaceutical companies. During the corona crisis, they suddenly started producing a lot more and different products - vaccines, for instance. On top of that, some of the medical waste that didn't used to be considered high-risk suddenly became high-risk. So we have to process it in a different way, while volumes are going up. We can compensate to some extent by shifting certain waste streams to other facilities. But in Europe we have no processing capacity in surplus, especially for streams from the industrial and pharmaceutical sectors."
"During the corona crisis, the supply and demand of waste disposal became very unbalanced and that is still the case today. A bit later, the situation in Ukraine caused high energy prices. As a result, consumption fell, stocks were built up and intermediate storage sites were full again. That made the logistics organisation more complex and expensive."
Consultation and collaboration are at the heart of our S&OP story. It is a chain that starts with our customers and continues through sales, supply and production to the operators of external plants
How does Indaver deal with uncertainties in its own supply chain?
"In the past, it was enough to focus on the short term. Waste market players often work together to use capacity in Europe as efficiently as possible. So when a customer called, we found a solution within a few weeks.
Specifically, that meant reserving a slot at one of our own processing facilities or with a third party. But we noticed increasing pressure on the planning departments. Short-term planning was no longer sufficient."
"This is why we have implemented Sales & Operations Planning (S&OP) processes. This implies close cooperation with the sales department and the processing plants to - in the medium term - balance demand with processing capacity. We started doing that in 2019, just before corona. When the first supply chain crisis hit, we had a well established process."
"Now we are working out a rough capacity planning (RCCP) for the medium term, an overview of the situation six weeks to three months ahead. If there is an imbalance then between demand and throughput, we can still take timely actions and make adjustments. That takes the pressure off the short-term planning departments."
"Good communication, especially with our customers, is essential here. Our industrial customers often work with production campaigns and different waste streams are produced during the maintenance and cleaning of their installations. If customers announce this in good time, we can check in advance what processing technology is needed and whether (alternative) capacity is available. Changing legislation sometimes also brings new wastes onto the market. For instance, a lot of PFAS-containing streams are now coming our way. We have good treatment solutions for these, but demand is very high. That is why we are investing in additional water treatment technologies to process that material with minimal environmental impact."
"If higher demand is accompanied by reduced processing capacity, for example due to planned shutdowns of processing plants, we will work with our customers to find a solution. They can postpone their campaigns or the waste is temporarily stored before being processed."
What factors do you have to take into account in Sales & Operations Planning?
"You have to know that we work with very large volumes and many different materials. In Antwerp alone, we process around 700,000 tonnes on an annual basis. Industrial waste also consists of thousands of types of chemicals, in different forms: solid, liquid or paste - the consistency of chocolate spread."
"For each customer, we first do an acceptance survey of the expected waste streams, as part of the sales process. So before we draw up an offer and a contract, we first examine whether we can process the waste and with what technique: incineration with or without energy recovery, water recycling, physicochemical treatments ... It is very important that the customers inform us well, because they know the process that generates the waste stream. At the time of delivery, we double-check the delivered cargo to see if it matches the agreements."
"Then comes the processing itself. For example, when it comes to incineration via rotary kiln technology, we need to achieve a good mix of the waste streams, 'the menu', so that the kiln can run optimally. Such an incineration process is theoretically self-sustaining, but for that to happen, there has to be a constant supply of energy. You have to process waste that is low in energy together with waste with a higher energy value. At the same time, you have to ensure that the furnace doesn't get damaged. The inside is lined with tiles to protect the walls. But some streams are corrosive; they can damage the tiles if you don't process them together with less corrosive streams. Finally, we continuously monitor emissions. Getting the balance right in accepting the different types of waste and properly monitoring the 'feed menu' is an art in itself."
"So the mix has to be just right. And that's not easy when the supplied quantities are always changing. We have to take many elements into account. That is why consultation and cooperation are central to our S&OP story. We see it as a long chain that starts with our customers and continues internally through sales, supply and production, all the way to the operators of external plants."
"In the future, the puzzle will not get any easier. New challenges lie ahead. Drought will make water transport difficult. Floods will cause roads to be closed. The unpredictability of weather caused by climate change will be the cause of the next supply-chain disruption. But we have a strong S&OP process in place and will be able to meet those challenges too."