Alabama's "Waste Not, Want Not" Help to Small Business

by Fred D. Baldwin

The road to economic growth is smoother now for CoraGlass, Inc., a small manufacturer in Reform, Alabama, thanks to an innovative public-private partnership that helps small and medium-sized businesses reduce waste.

CoraGlass makes glass products like tabletops, patio tables, and shower doors, all of which are cut from large glass sheets. But its workspace is an old building that once had rutted and potholed floors, giving carts and forklifts a bumpy ride. Bumps meant breakage, and breakage cost money. Patching the floors didn't work; conventional patches didn't stick well to the floor's asphalt surface.

Today the floor is patched with a synthetic resin that bonds smoothly to asphalt. Breakage has been reduced substantially, saving the firm, a manager estimates, up to $15,000 a year. CoraGlass found out about the resin through the Alabama Technology Transfer and Waste Reduction Project, a partnership between the Waste Reduction and Technology Transfer (WRATT) Foundation—a nonprofit organization that uses retired engineers to provide free, confidential waste-reduction assessment to small and medium-sized businesses—and the Alabama Small Business Development Consortium (ASBDC). The project is supported by an ARC grant.

CoraGlass is one of 52 firms in Appalachian Alabama assisted during the past year by the project, which offers small and medium-sized companies access to engineering expertise acquired over lifetimes of employment with many of the nation's leading manufacturers and, as a bonus, yields environmental benefits from reduced waste streams.

"On technical problems," says Susan Armour, manager of the project and director of the Small Business Development Center at the University of South Alabama, "most small-businesspersons don't know where to go, who to call, or what to ask. Bringing the WRATT resources to their companies helps them grow."

Tapping the Knowledge of Retirees

The WRATT Foundation, based in Muscle Shoals, has helped a total of 600 Alabama companies since its creation in 1993, according to Roy O. Nicholson, its chief operating officer. Its board of directors is composed of business leaders and representatives of state and federal agencies, including the Alabama Department of Environmental Management and the U.S. Environmental Protection Agency. The foundation has also served as a model for similar projects in four other states. The concept evolved from a suggestion of a former Tennessee Valley Authority manager that tapping the knowledge of retired engineers would be a cost-effective way to reduce industrial pollution.

" 'Cost-effective' means working cheap," Nicholson laughs. "It's not quite volunteer work, but the stipend is a token."

Nicholson explains that a study of the WRATT Foundation's cost-effectiveness indicated that every dollar spent on WRATT yields $36 in savings to the companies. The average net benefit to companies in the study was $102,000 per year.

"Of course," Nicholson adds, "we have mom-and-pop shops that save in the $5,000 to $10,000 range. But that means as much to them as a million dollars to a much larger firm. And helping firms remain profitable preserves existing jobs and makes creation of new ones possible."

A Team Effort

This linkage between profits and employment led the ASBDC to team up with WRATT and seek ARC support, says John Sandefur, state director of the ASBDC. The ASBDC is itself a partnership among 11 state universities, three state agencies, two cities, and a chamber of commerce. During 1996 it counseled 4,180 Alabama business owners, advising on matters like financing, marketing, and exporting. An economic impact study suggests that businesses that received as much as five hours of counseling generated almost $95 million in new sales and created 462 new jobs.

"The ASBDC program is based on partnerships," Sandefur says, "and we've had a long-standing relationship with WRATT. They added a lot of value to our programs."

The ASBDC has used eight workshops to get the word out on WRATT's availability. Armour explains that the actual consultation process normally involves two visits. First, one or two WRATT engineers do a "pre-assessment" of the firm's operations, identifying areas for attention and the kinds of expertise needed on a consulting team. Second, a team that may include as many as a half-dozen engineers with different specialties conducts the actual assessment, provides company officers with an oral debriefing, and, within 30 days, gives written recommendations. Follow-up contacts confirm report accuracy and company satisfaction; additional contacts, six to twelve months later, address implementation results.

Confidentiality is critical. Although representatives of public agencies sit on the WRATT board of directors, the foundation does not send them information on companies. Similarly, the WRATT consultants take care to avoid sharing company-specific information with potential competitors. The report remains confidential.

"They were very professional," says Earl Sanders, general manager at CoraGlass at the time of its WRATT assessment. "They outlined their purpose very clearly. I felt comfortable with them."

Typically, the WRATT team makes a wide range of suggestions. At CoraGlass, for example, the consultants recommended more systematic attention to recycling metal strapping and a new pumping system for washing away and disposing of glass "fines," a by-product of grinding and polishing processes that has the consistency of powdered sugar. Sanders says the firm is already acting on the first of these proposals and considers the second one valuable: "What they recommended will probably cause us to do our own solution 6 or 12 months sooner."

Major Payoffs

Another firm assisted by the project is Madix Store Fixtures, located in Goodwater (Coosa County). Madix manufactures metal shelving; its customers include grocery chains, department stores, and office supply companies. The basic manufacturing process at Madix starts with something that looks almost exactly like a giant, extra-shiny roll of duct tape. But this roll is made of sheet metal and weighs 20,000 pounds. Lengths chopped off its end are fed to machines that cut, punch, drill, bend, or crimp. Finally, after powder coating or painting, the resulting pieces emerge as recognizable parts of shelves or frames.

All that chopping and punching leaves behind a fair amount of scrap, ranging from jagged trimmings to a sort of steel confetti. Because Madix was already reselling that metal and finding markets for most other by-products (e.g., sending wood from shipping crates to a firm that uses it for boiler fuel), most of the WRATT recycling recommendations involved minor improvements.

Phillip Whitley, an industrial engineer at Madix, says that he had already considered many of the WRATT suggestions but welcomed the consultants' report as an independent endorsement of ideas he expects to present to the firm's management. With approximately 550 employees at its Goodwater plant, Madix is classified by the Small Business Administration as "medium-sized" (a "small" manufacturer is one with under 500 employees), so major changes must promise major payoffs. Whitley estimates that acting on all of WRATT's suggestions could yield savings on the order of $75,000 per year, clearly a worthwhile amount.

One suggestion Whitley plans to support involves adding a backup compressor for the Madix powder-coating operation, an early step in applying various baked-on finishes. The process is sensitive to moisture, and if a compressor failure causes an air-dryer to go down, repairs can take several hours.

"The cost of downtime? About $1,000 per hour," says Whitley. "We've got 70 people tied to that paint line. When it stops, you've got 70 people standing still. Not to mention that product isn't going out that door. That means overtime to keep up with demand. It adds up pretty fast."

Many of WRATT's recommendations involve energy conservation. McCord Payen is an Athens firm that manufactures head and manifold gaskets for cars and trucks. Siobhan Duggan, a project engineer on contract with McCord Payen, says the WRATT consultants suggested that the firm ask technical experts at the University of Alabama in Huntsville (UAH) to do a power survey.

"We have very high electricity bills," she says. "It was a good place to target that we hadn't really thought to target before. They [UAH] recommended that we change our ovens from electricity-powered to gas-powered. I've just put in a proposal [to McCord senior management]. That looks like it could save about $50,000 a year—just under a three-year payback."

Taken as a whole, say Armour, Sandefur, and WRATT's clients, the ASBDC-WRATT-ARC partnership offers something for everybody: cost savings to businesses, long-term payoffs in job creation and preservation, reduced need for landfills, energy conservation, and, often, elimination of on-the-job or environmental hazards.

Is there a downside? Well, the pronunciation of the acronym WRATT ("rat," of course) does lead to some bad jokes, mostly by the engineers themselves. There are currently 54 of them available in Alabama, all delighted to be putting their experience to good use. Most are in their late 60s and early 70s, but a few are over 80. Nicholson sums up his organization's work from their perspective: "You could say that we're recycling the expertise and creativity of retirees. It would be a shame to waste that resource."

Fred D. Baldwin is a freelance writer based in Carlisle, Pennsylvania.