Using innovative procurement methods, the world’s largest flower auction is on course to achieve its ambition of zero waste and has shifted integral waste management in its operations from a cost to a revenue stream.
Royal FloraHolland had been exploring how to make its operations more sustainable, smarter and reduce costs. Following market consultations, it developed a vision to achieve zero waste, which it could only achieve by perceiving its waste flows as a source of raw materials. It was helped in its vision by the fact that three major waste streams could be distinguished that are suitable for re-use – green, cardboard and plastic.
Clear objectives are vital for best value procurement methodology
A number of clear objectives had been formulated as a result of the market consultation which were: no more waste; switch from cost to revenue; look after existing staff; and keep customers satisfied.
Traditional purchasing methods did not apply in this situation, but the clear objectives were ideal for best value procurement (BVP) methodology. This method is applied in situations where the client knows what they want to achieve, but not how to do so.
Unique process applied for the first time to waste management
Royal HaskoningDHV managed and guided this unique process which had never been applied to waste management. It involves outsourcing the entire business process, including people and resources, to an external party. Training sessions and meetings took place to explain the BVP approach to internal stakeholders and external parties from the market. To maximise available expertise, a choice was made to go for a public tender without minimum registration requirements.
Three tenders were put forward which were assessed on quality (weighted 70%) and price (30%). Registrations are anonymous and high scores only given if applicants can substantiate their promises with performance information. The winner is the party most likely to deliver the best performance.
Before 2021, waste will be providing a source of income
The entire process took 18 months and the contract was awarded to Milgro, a recircle company based in Rotterdam. A business plan was then developed for the waste domain. In 2017, Milgro took over waste management from Royal FloraHolland, including permanent staff and various machines. It has convincingly demonstrated it can realise the ambitions of Royal FloraHolland in the field of waste management. The results are:
- Full outsourcing of waste management from 1 September 2017
- Residual waste will be reduced by 20% to a minimum in the coming years
- Within three years, waste goes from a robust cost item to a source of income
- Former permanent employees gain new position and employment opportunities at Milgro
- Royal FloraHolland, its 5000 members and its customers benefit.