.......The Rest of the story Aug 08

What do I think the recycling industry will look like in the future?

1. I think we will see a lot of smaller recyclers get out or go out of business.  We are already seeing quite a bit of this.  The current price of metal is keeping a lot of them in business right now.  Also, a lot of owners find they do not have a next generation who is interested in taking over the business.

2.  The surviving recyclers are going to get bigger and bigger.  Again we are already seeing sales volumes which would see staggering just 20 years ago.

3.  Recyclers will use technology to replace more and more of what people now do or what needs to be done but hiring people to do it isn't practical.  Unfortunately a lot of recyclers are getting further and further behind in this area and I see this being a contributing factor in the first prediction. 

4.  Salvage pools will eventually price themselves out of their market.  Insurance companies and recyclers are already exploring ways of bypassing this industry.  Insurance companies will "select" the recyclers they want to handle their salvage vehicles.  Some of this is already happening in Australia and is being discussed in the U.S.

5.  Interchange updates will come more frequently.  Once interchange is determined by the interchange technician, that piece of information will be sent to recyclers via the internet and the inventory managements systems will be automatically updated.  This makes interchange resolutions a breeze since you get a few each week instead of a bunch two or three times a year.

6. Your inventory management systems will be updated with new software while you sleep.  This is already being done by one of the U.S. systems for interchange and feature updates.

7. Recyclers will be a lot better educated.  We are seeing more and more college graduates taking over operations.  Since numbers are becoming more important than knowing parts the future will be easiest for those who know what to measure and how to evaluate what they measure.

8. Training ourselves and our staff will become more important than ever before.  The leaders in the industry will seek ongoing education just like most other professions currently do.

9. Metal prices have alway been unstable and can quickly change.  A lot of the smaller operations have backed off on buying inventory and shifted to scrap as their main source of income.  A sudden drop in the price of metal will catch a lot of people overstaffed and many will fail to react to the new market and adjust what they pay for vehicles.   The change which is bound to come will put many of them out of business.

     Basically the recycling industry will continue to become much like other businesses.  Profit margins will continue to be squeezed by governments and the marketplace at large.  Increased  sales volumes will be necessary at the same time reductions in payroll will have to occur to remain profitable.  After all, payroll is really the only thing we have much control over and we have a lot of options there by using incentive pay.  I'm afraid a lot of people are just not will to do what it will take to be a recycler of the future.  Resistance to change and the unwillingness to seek help when we don't know what to do is a deadly combination.