The Circular Future - A Quantum Lifecycle Partners podcast

43. Harnessing Technology for a Sustainable Future

• Stephanie McLarty • Season 1 • Episode 43

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In this conversation, Stephanie McLarty and Geoff Aardsma discuss the intersection of sustainability and technology, particularly focusing on how automation, AI, and big data can enhance business efficiency and support circular economy initiatives. Jeff shares insights on AMCS's role in resource management, the importance of engaging upstream in recycling processes, and the current state of technology adoption in various industries. They also explore the financial implications of implementing these technologies, the need for senior leadership buy-in, and the significance of maintaining curiosity in a rapidly evolving landscape.


Takeaways

  • Digital tools are essential for enabling circularity.
  • Automation can significantly improve recycling efficiency.
  • Companies are still early in their digital transformation journey.
  • Regulations influence sustainability practices but businesses act for competitive advantage.
  • Mature organizations spread automation across all functions.
  • Financial analysis is key to justifying automation investments.


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Want to be a guest on The Circular Future podcast? Email Sanjay Trivedi at strivedi@quantumlifecycle.com


Speaker 1:

Automation, AI, big data these are certainly the talk of the year, but how can we leverage these tools to advance our business circularity goals? Welcome to the Circular Future. Your access to thought leaders and innovations to help you be a business sustainability champion, even if it's not your core job. I'm your host, Stephanie McLarty, Head of Sustainability at Quantum Lifecycle Partners. As I was preparing for this podcast, I asked Google what are the top trends for businesses this year, and at the top of the list is sustainability, then generative AI and AI itself, and I think that's a great summary of how businesses are feeling today.

Speaker 1:

We know we need to be more sustainable and circular and, in some ways, we're being regulated to do so. We also need to boost our efficiency and productivity. So how do we do all of this? Well, that's exactly where AI, big data and automation can come in and be a huge opportunity for any organization, can come in and be a huge opportunity for any organization. With me to unpack how this is all possible is Jeff Ardsma, Vice President Solutions for AMCS Group, a global enterprise software solution provider that merges business performance and sustainability. Jeff has had over 15 years of experience in optimizing waste recycling and operations in various industries, including bringing container sensors and optimization software to market. Welcome to the podcast, Jeff.

Speaker 2:

Thank you, stephanie, really excited to be here.

Speaker 1:

Really happy that you're here and to dive into this important topic, but first let me ask you a little bit about your world. What would be? Three things that we wouldn't necessarily know about AMCS?

Speaker 2:

Yeah, no thanks, and I'm really excited about these topics. It's something that we at AMCS live and breathe every day and excited to bring your audience a little closer to how it might impact their everyday lives as well. You know, the first thing that we probably should share about AMCS is that we're really more than people might think of us. We're an end-to-end cloud solutions provider for resource-intensive industries. We're most recognizably tied to waste and recycling, but we have really expanded in recent years to stretch across the value chain and impact a number of different industries.

Speaker 2:

At core to our brand that the concept of sustainability and business performance or profitability are not independent of each other but, in fact, can be drivers and help accelerate each of them independently.

Speaker 2:

So we've introduced the concept of performance sustainability. It's something that we've been tracking over the last two to three years and this year we really aligned our company, our mission and all of our solutions around this concept. In simple form right Profitability and sustainability, or green and growth. They're not incompatible, they're not incongruous. So we see an opportunity for sustainability to be a differentiator, a lever for unique growth for our customers and the industries that we serve, and we see that our customers are acting in this way every day, and so it's a huge part of what we do and what our solutions help to enable what we do and what our solutions help to enable. The last thing that I'd share is you know that AMCS has stretched into areas beyond resource management or logistics, but we interact with manufacturers and we're really heavily focused on bringing concepts of sustainability, health and safety, optimization, ai and automation into the resource-intensive industries that we work with closely.

Speaker 1:

That's amazing, and I've done a lot of reading on AMCS and what struck me is that it seems like you very much see yourself as part of the circular economy, like you are a circular economy ERP. Is that right?

Speaker 2:

Yeah, and actually we see ourselves as enablers of the circular economy, and one of the ways that we really have to think about enabling circularity is providing digital tools to help automate the very difficult work that goes into it. When we talk about resource-intensive industries, it's just that it takes a lot of equipment, it takes a lot of people, it takes a lot of energy to manage all of the materials that are introduced into our commerce systems, into our manufacturing, right into our retail systems. You know it's striking the deeper you get into the waste and recycling industry. The entire economy that's really built around managing these materials that are either at end of life or coming back into a circular economy. And it takes vehicles, containers, into a circular economy. And it takes vehicles, containers, facilities, robotics, you know, shipping containers, everything, and so having all of those moving parts and people and companies interacting with each other really require a platform to digitize it and give the foundations to handle the large amount of data and transactions in a way, that of Things, as tools to help with this digital transformation.

Speaker 1:

What exactly are we talking about, jeff, because I think there's not necessarily a common understanding of what these terms are, but it piques people's interest.

Speaker 2:

At its simplest and I myself have to remind me of the growing definition of IoT. It's about digitizing and connecting physical pieces of equipment and physical motions within our everyday work job, and we're enabling that vehicle to capture data through telematics right and tracking its movement and engine performance and fuel consumption. Putting digital interfaces for the driver to be able to communicate back what's happening on a collection route or a delivery route and communicate that back seamlessly without having to radio in. Putting cameras on a vehicle, for example, to help automate the detection of overfilled containers or contamination that's coming into a collection route. Putting sensors or, you know, other connected devices into the collection containers so that we can actually get insight into what's happening in them without sending a vehicle.

Speaker 2:

You know there and those are just some small examples in the logistics part of the industries that we serve of how we're connecting these physical assets whether they're fixed or moving assets, whether they're fixed or moving assets to a digital network and then really enabling the operators of our businesses to data insights and visibility to our key operators, who can make better decisions, deliver services more efficiently, lower costs, manage materials in a better way, communicate to their customers how to best manage their you know their materials that they might be discarding or trying to recycle. All that just becomes more efficient when we take kind of the manual communication or, you know, the verbal communication out of it and let machines do that work for us.

Speaker 1:

Yeah, do the heavy lifting if you will. So I'm curious around the specifics of how this applies to circularity. You've just touched on more resource efficiency and better bottom lines. Are you actually seeing, then, an increase of recycling and other aspects of circularity as well?

Speaker 2:

an increase of recycling and other aspects of circularity as well. One of the things that we've really been excited about this year is engaging in the upstream detection of contamination in recycling routes. For the longest time, recycling facilities had a nearly impossible task. Right, they're a manufacturing facility that has no control over the materials or the inputs that are coming into it. Right, they've got a vehicle that goes out, collects materials or recycling from residents or businesses and they come and dump it at the recycling facility and then, you know, through some magic or manual picking or robotics, they're expected to turn it into usable commodities that have value on the market and can be turned into new materials.

Speaker 2:

That resulted in a lot of contamination, a lot of wasted materials, a lot of logistics that were unnecessary to have to remove material that shouldn't have ended up at the recycling facility in the first place, a lot of safety risks for dangerous materials that could start fires or injure employees or cause equipment downtime and make the facilities less efficient.

Speaker 2:

And so what we found is actually being able to measure at the point of collection if the material is going to be consistent with what the recycling facility can actually handle, and being able to do that upstream, at the collection route and being able to feed that information when there is contamination back to the people that are generating it can impact behavior. But the quality of the material and the efficiency of the recycling facilities has increased so much, when you engage upstream and at the point of generation, that our operators are really excited and it solves problems that they couldn't solve otherwise inside their facilities. They had to go out into the communities and engage with their customers and the people that are throwing these materials away and it helps with education, it helps lower costs and ultimately it helps recycle more material and bring it into the circular supply chain to come back as new consumer goods. And so we do see a huge impact from that type of automation that otherwise wouldn't have been possible automation that otherwise wouldn't have been possible.

Speaker 1:

That's neat it reminds me of in Edmonton we have installed a machine that uses x-ray and AI and machine learning to help identify batteries within products, because for us, we're e-waste recyclers in that location, and so it's helping to identify the hazards before they go through the shredder and therefore decrease the instances of fires and, ultimately, safety issues. So many people say show me the data, like what this actually means quantified. Are you able to speak to any quantifiable numbers in terms of this impact of these tools on efficiency and safety and all that?

Speaker 2:

I'll give some examples.

Speaker 2:

Just around what it's a product that we call Vision AI, and this is using cameras on collection vehicles to automate the detection of overages or contamination through a collection route.

Speaker 2:

What we found is, when we focus on trying to determine where containers are over full at the point of collection, that when we automate that, the detection rate goes up 100% versus manual detection.

Speaker 2:

So, relying on a driver to mark and report back when there's an overfilled container, when we automate that with a video feed and with AI, we've seen nearly a doubling of the capture of that information. You know, one of the things that is really important for our customers specifically is all the additional costs that are associated with overfill. So when we have captured more overfill rates, they're actually able to generate more revenue and save more money, and so even a 10% overfill rate capture increase can result in upwards of $5,000 a month for a single collection route. So for our large operators, it's very significant in making sure that they're providing the right service and that they're communicating back to their customers. What's happening upwards of 30% to 40% reduction in contamination across a collection route, which means 30% to 40% less incompatible material for a recycling facility is actually showing up at that recycling facility and being put in the right place to go to the right disposal facility the first time without having to double touch it.

Speaker 1:

Well, those are huge numbers all around and I want to get into how we actually implement these things. But I'm curious. This makes so much sense, right? You talk about these numbers of like 30%, 100% gains. How much are you seeing companies actually embrace this and embrace the possibility of this? Are we early on the journey as a whole, or are we later stage?

Speaker 2:

Yeah, I think we do find ourselves still fairly early in the journey, and a lot of it has to do with um companies going through their own digital transformation uh activities.

Speaker 2:

Um, you know there are so many opportunities out there, uh, for engagement into new technology um, that we're actually seeing, you know, kind of a stressed IT infrastructure inside of companies that have too much demand.

Speaker 2:

Right, there's too much, there are too many improvement opportunities there. So what we try to help our clients go through is a prioritization exercise and identify what are the most impactful activities that you could engage in from a technology perspective, what would have the best impact on your customers, on your employees, on your company as a whole, the impacts that you would look to have in the communities you service and go out and do the research of the best way to implement those For our customers. We're finding that these types of automations across manual processes that can be stood up as standalone offerings or integrated into a wider IT infrastructure is representing some low hanging fruit that just makes sense to get involved in straight away right now and it doesn't take a huge lift to integrate into their operations. And so these types of decisions we're seeing becoming easier, but we are certainly still early in the journey and would look to see the opportunities continue to grow as more companies adopt these types of solutions.

Speaker 1:

So what you recommend is basically sitting down, doing a prioritization exercise and then identifying the low-hanging fruit. I saw a checklist in one of your documents in terms of different things to do around inventory management forecasting, material quality assessments, machine learning, imaging tools, material valuation with dynamic pricing agility to make adjustments following quality control assessments. Is this a checklist of some of the possibilities that a company could really implement?

Speaker 2:

Yeah, and we see it again. It's showing how dynamic the industry, that the industries that we service are, and the vast opportunities that they have to improve their business operations. One of the ways that we've encouraged to look through this right you've got your operational KPIs, you probably have your financial KPIs. You've got your operational KPIs, you probably have your financial KPIs. We like looking at this through a sustainability measurement as well. Where you have the most greenhouse gas emissions or where you have your scope one scope, two emissions the heaviest to apply automation and technology to help impact that. And one thing that we absolutely know is that when you reduce your greenhouse gas emissions or your carbon impact resulting from your operations, you lower costs and you're able to provide more competitive services to your customers and you're able to identify new growth opportunities quicker. And so we really like having that sustainability measurement to complement operational and financial measurement as a way to really help with that prioritization exercise.

Speaker 1:

I love that, jeff and you are speaking my language. We think about all those things too. At Quantum and, in reality, a supplier to a company. Their emissions are their customers' scope three emissions. So the more that you can reduce your own emissions as a company, it's actually good for your customers and who you serve, because they may be using your data, or will be using your data to calculate their scope three emissions. So I think that's really smart that you think about it from a sustainability lens.

Speaker 2:

So for our customers as well. Right so for, like a waste and recycling operator who's looking to measure their greenhouse gas emissions, one of the most challenging things for them is actually scope three, right. So when your part of your recycling operation, for example, relies on subcontractors or suppliers, that makes your sustainability measurement that much more difficult. So what we're actually seeing is a trend of vertical integration and recyclers getting more involved in a wider part of the supply chain and controlling the path for materials that they're managing to actually get back into the supply chain. So, whether that's companies that are investing in plastic polymer plants, companies that are investing from an organics management perspective management perspective getting more into packaging, mulch or compost and bringing it directly to market themselves to reduce the reliance on suppliers but also control more of the operations and increases competitive advantage, and it makes their measurement and optimization activities much more streamlined and simple to implement.

Speaker 1:

Well, the new Basel changes that made me think of that that it's really making companies rethink how they do business, particularly around plastics recycling. I'm wondering how much do regulations actually change the space and change the adoption of some of these tools to increase their efficiency and sustainability?

Speaker 2:

Yeah, well, we certainly see regulation as having an influence. The challenge with regulation is that enforcement doesn't always follow quickly when regulations or legislation comes in, certainly for the majority of the materials that we find in the non-hazardous solid waste side of the business. And so, while that might be an influencer of longer term decisions, the short term decisions we see influenced by competitive advantage and growth aspirations and so, but there's there's an overlap, right? So things that our regulations are looking to direct the industry to do as best practice that would be best for the environment and for the communities that we service are also good for business. And so we see businesses taking it upon themselves to implement these improvements simply because they can increase margins and grow into new markets and gain new customers or increase competitive advantages against, you know, new entrants into markets that they serve. So we do see the regulations coming, but we see businesses making these decisions faster because they're good for their bottom line.

Speaker 1:

They're good for business and, to what you said early on in our conversation, I believe it too. It's possible to be a sustainable business and a good business. So they're not trade-offs, jeff. We've been speaking about companies that are adopting this sort of early on in their journey, but what about companies that are further along in implementing this? Can you give us some examples of what are they working on, what are they adopting and the kind of results that they're seeing?

Speaker 2:

Yeah, so what we see with customers that have gone past the initial adoption of AI and automation is actually spreading that across more business functions.

Speaker 2:

So, for example, bringing those insights that we're talking about from a collection vehicle about what's happening on a route and actually planning more of their downstream operations based on that data.

Speaker 2:

Based on that data, so they're standardizing and automating you know further across the lifecycle of their operation and scaling the impacts as a result. So, if you can think that you've got logistics operations that would feed into a processing or manufacturing style operation, and then that has to go into packaging and marketing to sell to an end market and everybody needs to be invoiced or paid or, you know, balances transferred between company entities all along that journey, our customers that are now very mature have layered automation across all of that. It's resulting in reduced back office burden, right? So they're holding less overhead, meaning they're putting more investment into their operations rather than into their administration, and they're making more informed strategic decisions and they're growing faster. So they're making acquisition decisions faster. They're making those vertical integration decisions faster and growing into new operations that can reduce their reliance on suppliers, to new operations that can reduce their reliance on suppliers those types of things simply happen faster and more confidently when the automation exists across the operation.

Speaker 1:

So it essentially enables them to scale faster and, frankly, we're talking about all the circular elements to this. In a sense, scale circularity as well. Exactly, jeff. Let's move into our how-to section, where I ask you some how-to questions and you can answer them as short or as long as you like. The first one is on the financial side of this. So certainly there's a cost I'm sure there's an upfront cost to implementing these tools, perhaps an ongoing cost as well how to quantify the payback period to invest in automation and these types of tools overall?

Speaker 2:

Yeah, return on investment is an absolutely critical part of getting off the ground.

Speaker 2:

We recommend getting closely aligned with your vendors and partners to help with that analysis. So one of the things that we do with all of our clients is we sit down and go through this return on investment exercise Not only what are the key pain points or points of efficiency and optimization that digitization effort can provide, but what's the operational structure or the organizational structure or the IT structure that our customers need to have to support it and maintain it right and make sure that it's kept up to date and they can get through organizational change management and adoption right, make sure that it sticks and actually delivers the value that they expect. And so interacting with experts and vendors can help you get through that. And every digital engagement has its own calculation, and so you really need to treat it as such, know what you're trying to achieve, know the value you're aiming to deliver, and then understand the resources that it's going to take to get that done, and that should lead you to a very confident decision on the return that you can expect from that investment.

Speaker 1:

Okay, awesome. Now you mentioned different departments, different players within an organization. How to decide who should be responsible for this area, especially when a lot of these projects touch operations and sustainability and IT. Who should manage this?

Speaker 2:

Any technology effort should be bolstered by a solid IT backbone, but we like to really think about the impact on the customer. So, for the companies that we work with, who are you trying to provide services to? What value are you going to provide to them? How does this ultimately land at the folks that pay your checks? And that helps us stay focused on the things that matter to their business, and the things because it's always the things that matter to their customers that are the most important. So you always need an IT infrastructure. But then we go straight to what matters to your customer and how can you grow your business best with that in mind, and that's usually a really good recipe for success.

Speaker 1:

And how you structure your team. Okay, that makes a lot of sense. Last one we talk a lot on this podcast about not only the initiatives or ideas that you can implement, but also a reality for a lot of organizations is getting buy-in from senior leaders to actually move ahead and implement these things. So, from your view in this space, how to get buy-in from your senior leaders, any recommendations that way?

Speaker 2:

Yeah, alignment with strategic goals that would be meaningful to a senior leadership sponsor for a particular project is key. So, whether you are looking to increase revenue or increase sorry, so whether you're looking to increase revenue, grow into new markets, reduce costs and increase margins, or you have a more sustainably minded goal of recycling more material, increasing the impact you might have environmentally on the communities that you service, whatever that might be, finding what's important at the strategic level that already has a senior leadership sponsor and providing value directly to achieving that strategic goal is the best way to get that senior leadership buy-in. And it's critical You've got to have it. You can't skip that step. Otherwise it's really hard to change organizations and change people and change process without that type of leadership buy-in.

Speaker 1:

Well, that's true, and even if you get the initial yes, without that true buy-in from those senior leaders, the sustainability of the long-term implementation may be in question. I would imagine. So great advice, Jeff. We have covered so much here today and given so much to our listeners to think about. It's been great. What would you say would be one final piece of advice you would leave them with regarding this whole area of automation and all these digital tools that they can use to transform their business?

Speaker 2:

Yeah, I love to advise people to stay curious. There's so much changing in the composition of the materials that are all around us. There's so much changing in technology. There's so much changing in the competitive landscape of how we all run our businesses that remaining curious and remaining educated and seeking out new opportunities to do things differently is always the best practice. Plus, it makes working fun, I find. So that's always my first advice Remain curious.

Speaker 1:

I love that One of our core values at Quantum is relentless curiosity. So for sure, and you know, we can really build a better mousetrap, as we say, if you stay curious and keep up as the world evolves. Jeff, thank you so much. This has been really insightful for me and, I'm sure, for our listeners, so we really appreciate having you here.

Speaker 2:

Thank you for the opportunity and love listening to the podcast and all of your guests, so please continue on. It's been a great opportunity for me. Thank you.

Speaker 1:

Thanks and remember, if you have old or redundant electronics for reuse or recycling, we'd love to chat Head on over to quantumlifecyclecom and contact us. This is a Quantum Lifecycle podcast and the producer is Sanjay Trivedi. Thank you for being a Circular Future Champion in your company and beyond. Logging off.

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Stephanie McLarty

Host
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Sanjay Trivedi

Producer