BUSINESS TO BUSINESS: SOLID WASTE MANAGEMENT

1. BUSINESS TO BUSINESS:SOLID WASTE MANAGEMENT Presented By: Wilson Lau Kanyi Masembwa Sainath Nagarajan Jeff Pany Juan Pulgarin

2. Solid Waste Management Nuclear Bomb Parts Litter Kentucky Plant(February 11, 2000 The Washington Post) Cyanide spill pours across border into Yugoslavia (February 13, 2000 www.cnn.com) “We can use technology, innovation and business practices to create value for shareholders in industries fraught with illegal and unethical practices.” (earthcareus.com)

3. Industry Overview • Solid waste management is an integral component of heavy and large manufacturing industries dealing with safe disposal and reuse of wastes • The Environment Protection Agency (EPA) defines the solid waste management process as • Public Education and Involvement  Facility Sitting and Permitting  Develop and Waste Management Program  Collection and Transfer  Source Reduction  Recycling  Composting  Combustion  Land Disposal • Within the industry there are very few large players, each of which focuses on some portion of this process. Companies generally fall into three categories: • Solid waste management equipment • Solid waste processing • Solid waste management consulting services • The industry is characterized by: • High degree of fragmentation • Highly cyclical or unpredictable supply and demand • Multiple distribution steps

4. Solid Waste Policy Issues • The solid waste industry is heavily regulated by the EPA • The EPA oversees all solid waste management legislation. The EPA’s Office of Solid Waste’s (OSW) mission: • "The Office of Solid Waste operates under authority of the Resource Conservation and Recovery Act. We protect human health and the environment by ensuring responsible national management of hazardous and nonhazardous waste. Our goals are: • to conserve resources by reducing waste; • to prevent future waste disposal problems by writing result-oriented regulations;and • to clean upareas where waste may have spilled, leaked, or been improperly disposed. Individual statesadopt federal standards and operate their own waste management programs. Besides states, OSW works closely with industry, environmental groups, tribes, and the concerned public to promote safe waste management. "

5. Solid Waste Online? • REASONS FOR INDUSTRY TO MOVE ONLINE • Legal Issues: “Mandated levels for recycling continued to rise, and many jurisdictions have found themselves in a no-win situation, being forced to pay more for the recycling of waste than the disposal of it, often only to see those recyclables get dumped in landfills anyway. " Wasteinfo.com • Costs: “Each ton of waste recycled cost the city $295 in 1997 and $625 in 1996, and the majority of the waste ended up in landfills regardless. " - For the city of Augusta, Georgia; home of the Masters Tournament •  ROLE OF B2B ECOMMERCE • SCOPE for better business processes to manage solid waste • Reduce Cost • Integration with manufacturing and supply chain • Increase transactional efficiencies • Facilitate online tracking • Facilitate relationship management • Remedies inefficiencies in industry • Reshape supply chains (weeds out fragmentation) • Smoothens industry volatility

6. Major Industry Players • Vertical Portals • www.solidwaste.com • www.swana.com • Solid waste management equipment • Hi-Rise Recycling Systems • MotorVac • Waste Connections • Solid waste processing • Barringer Labs • Casella • Safety-Kleen • Waste Industries • Waste Management • Solid waste management consulting services • Industrial Services of America • Roy F. Weston, Inc. (Note: Major players were largely determined by an article found at www.wasteinfo.com, http://biz.yahoo.com/prnews/000119/ny_wall_st_1.html, as well as company 1998 revenues)

7. Sample Front Pages Approaches • Demonstrates actual services offered and presents brand image of the company • Focuses on information and services that are available on the site

8. How Do Solid Waste Companies Attract Businesses • Mainly through forming relationships with company executives/decision makers • Presence on information portals, marketplaces • Direct contact between individual partners • Campaigning by word of mouth • Advertising on sites such as verticalnet.com • Raising awareness through community events (eg. Marathons with waste-ind.com) • Establishing joint ventures and acquisitions (Industrial Service of America)

9. Who Are Their Targeted Customers? • Vertical Portals • All industry players • Waste management professionals • Solid waste management equipment • Local government contracts • Commercial and industrial companies • Homeowners associations • Solid waste processing • “Environmental consulting engineering firms, hazardous and low level radioactive waste treatment/disposal companies, public utilities, industrial companies (including mining companies) and various Federal, state and local government agencies.” (barringer-labs.com) • Solid waste management consulting service • Industrial and government • Other solid waste processing firms

10. Advantages For Sellers To Be Online • Provides broad access to diverse locations • Improve inter-company communications/coordination • Central source for regulatory and technical expertise • Increases volume of transactions by making services available to customers 24/7 • Reduces transactional costs while expanding their business and customer base • Streamlines many business processes related to taking orders • Attains thorough customer profile • Reduces time spent with customers by offering a forum to with thorough procedural documentation • Supports disintermediation

11. Value Chain Online Portals Sell Waste: Online Auction Manage their industrial waste Waste Management Co. Mfg Co. Industrial Waste Buyer Aggregate Waste* Direct B2B Interaction Online Value Added Service Cities Waste Management Co. Online B2B E Commerce Integration Point Traditional Offline Integration Point * Potential for SCM Integration

12. Advantages For Buyers To Be Online • Customized account and service information • “Availability » Data is available 24 hours a day, 7 days a week • Accessibility » Data can be viewed or downloaded from anywhere in the world where you have access to the Internet • Secure » Access to your data files is accomplished through a username/password combination. Only the client and seller have knowledge of this information • Faster Response » Electronic results are generally available the day the deliverable is completed at the lab • Easy Setup » You do nothing but acquire an account and password” (www.barringer-labs.com)

13. How Do Companies Retain Customers Online? • Provide account information online and allow the customer to update this information • Faster response time (e.g. www.wcnx.orgguarantees response within 1 hour) • Inform customers about company performances through newsletters and monthly reports • Provide easy channel for post-transaction communication (e.g. e-mail) • Provide customized services (e.g. Waste Management)

14. Industry Trends • Most sites are just now starting to develop an online presence (e.g.. alliedwaste.com) • Mergers and acquisitions are consolidating the industry • Many domestic companies are expanding internationally (e.g.. barringer-labs.com) • Legislation is enforcing more strict recycling processes • Most companies constantly research to improve solid waste treatment (e.g.. earthcareus.com)

15. Recommendations • Form partnerships with industry specific portals that will generate solid waste (e.g.. metalsite.net, chemdex.com, etc.) • Integrate waste management with MRP systems • Provide an overview of the transaction process online • Many sites require registration before you can see how you would conduct an online transaction • Set up permission marketing so that regular transactions can be streamlined • Achieve critical mass by exploiting network externalities • Bundle waste management services with the raw materials or semi-products