Routing Optimization for Waste Management

Waste Management (WM) obtains one third of its revenue from landfill disposals and two-thirds from waste-collection services. As most of the revenue comes from collecting trash, improving efficiency in operating the fleet improves the bottom line. After a flurry of acquisitions and a merger with USA Waste, WM found itself with a large fleet of vehicles whose routing, dispatching, maintenance, and management were decentralized.

WM recognized that it could reduce operating costs by improving its use of assets. It contracted with the Institute of Information Technology to develop WasteRoute, a comprehensive route-management system that took into account WM's specific routing concerns and provided broad benefits. Initially, the target audience of the system was the dispatchers and indirectly the drivers.

Sales and customer service also benefited because WasteRoute integrated the sales, customer service, and operations departments. The system reduced operating costs, provided better customer service, and determined appropriate prices. WM deployed WasteRoute across the nation beginning in March 2003. By the end of 2003, WM had 984 fewer routes, saving $18 million.

It estimated that its savings for 2004 due to the reduction will be $44 million. As it extends the system to additional areas, it expects additional route reductions.