In many companies outsourcing is a way of reducing the complexity of running the business while maintaining a high level of service and quality. Typically non-core activities like facilities management, IT, transport and customer support are outsourced.
The management of by-products can also be outsourced. For manufacturers working with biological raw material MBP has developed an outsourcing approach which we call OMBP (Outsourced Management of By-Products).
Our OMBP approach is built on three principles:
Our approach ensures aligned interests that will drive value. MBP’s international organisation and application experts ensure the best solutions.
Is essential – but often overlooked in many organisations. At MBP we invest in the education of our employees and audits and legal compliance reporting are built into our OMBP approach.
Our OMBP approach takes a long term perspective, which enables MBP to invest in product and market development. This ensures even better solutions in the medium and long term.
We have developed this checklist to help anyone considering outsourcing their by-product management:
9 things to look out for when you want to outsource your by-product or waste management
You want to make sure that the outsourcing partner you are choosing has a solid list of references showing good results. Check at least two references that are relevant for your industry.
The outsourcing partner must have the competencies that are relevant for your by-products and/or waste. Make sure that relevant permissions and certifications are in place.
You want a long term solution, which must be built on legal compliance. The outsourcing partner must be able to demonstrate knowledge about relevant local, regional and international legislation in order to ensure that your brand will not be associated with illegal activities.
As markets become increasingly competitive and international you want to ensure that the outsourcing partner has the right mix of local and international sales outlets. With changing legislation many products have a local buyer one day only to see an international customer paying a better price tomorrow.
For image reasons as well as for monetary reasons you want to ensure that the outsourcing partner is working with sustainable outlets. Many by-products and wastes can be recovered and recycled and landfilling becomes increasingly expensive. Look for certifications to document sustainability.
As legislation and subsidies change so do the best outlets. Make sure that your outsourcing partner does not have vested interests in one particular outlet but is able to always find the best outlet for you.
The best outsourcing contracts ensure that you have aligned interests with your outsourcing partner. The outsourcing partner must be incentivized in the outsourcing agreement to add as much value to your by-products and waste as possible in the market.
Many by-products and wastes have an unrealized potential that can only be realized through active development work with focus and competency. Make sure that the notice period of the outsourcing agreement is long enough to allow for development and that your partner is competent and incentivised to do the development.
Make sure that your outsourcing partner is reporting to your management on a regular basis (1 – 2 times per year) on the following parameters: value created and benchmarked, market development, sales and product development, legal compliance, sustainability as well as improvements/input for investment decisions.
MBP has a number of major OMBP contracts in the following industries:
Food and Beverages, Pharma, Omega-3 Refining, Oleochemistry, Fish Meal production, Nutritional supplements, Used Cooking Oil
We are managing by-products and waste from 31 factories in Europe, North-America and Africa.