Harvest: Organic Waste Recycling with Energy Recovery Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

Harvest has been operating in the waste management and recycling industry since it was established in the year 2008, meanwhile, Harvest is engaged in organic waste management market. The basic process flow at Harvest begins with the receiving of mixture of waste which is first weighted and then unloaded on the tipping floor, which is built in a covered building, further, the waste is sorted for organic and inorganic waste. After the sorting process the waste is sent to hydrolysis percolators for further processing. However, since the organic could not be stored in tipping floor for more than two days, therefore, the process has to be completed within two days. Then, the organic waste is processed for recycling through the anaerobic decomposition process, where the nutrient-rich digestate and bogies were separated from the organic waste.

However, the anaerobic decomposition process is done in two phases. First phase is consisted of hydrolysis and modernization that takes 15 days to complete the process, where the hydrolysis process was performed in hydrolysis percolator and chemical mixture was sprayed on the organic waste which separated the waste into molecules and these separated molecules were then converted into organic acids. In the next phase the waste composite is moved to a covered aerated static pile (CASP), where the aerobic composting process begins which takes 6 weeks of time. Meanwhile, the waste will be shifted to methane digester and extraction of the liquid hydrolyzate from waste will continue. Further, the bags will be produced from hydrolyzate on methanization stage, which will contain 65% to 80% of methane.

The revenue stream of Harvest consists of tipping fee, which depends on the difference of waste received and organic waste sent to the anaerobic digestion process. Additionally, the revenues are also earned from selling the electricity and compost generated and was sold for $0.06 to $0.11 per kWh. Further, revenue of $0.01 to $0.08 was also generated from the renewable energy credit premium which varies according the quality of waste used. Meanwhile the cost incurred by Harvest includes depreciation cost on processing equipment over 20 years and on engine generator over 10 years leading to combined depreciation expenses of $70,000 per year. In addition to this one supervisor is also needed, which costs $50,000 plus other benefits per year and two operators who will cost $40,000 plus other benefits. Meanwhile, the Maintenance, Utility and Administration will cost $670,000 per year.

Problems and Issues

The main issue faced by Harvest is the availability of high quality organic waste that it is used as the input for electricity generation. However, further to improve the quality of organic waste, Harvest has two alternatives available, i.e. establishing a preprocessing facility for separating organic waste from other waste materials or encourage its suppliers for separating the organic waste at source using their own process; additionally, both the alternatives will affect the current process flow at Harvest, meanwhile, both the alternatives will require Harvest to invest in either facility building and maintenance or the cost of educating suppliers for source separation of organic waste.

Recommendation and Action Plan

The evaluation of both the alternatives reveals that each has its own characteristics, meanwhile, each alternative would have a different impact on the Harvest’s process flow and would lead to different level of profitability achieved by Harvest. However, based on the analysis of both the alternatives, Harvest would be recommended to opt for development of a preprocessing facility. However, the profitability source separation alternative is higher than the preprocessing facility. Meanwhile, the preprocessing facility would require additional cost and more workers in order to operate the preprocessing facility, but still the development of preprocessing facility would be recommended, because of the fact that the source of at source separated organic waste is not a reliable source of input due to the difficulty faced by the suppliers in developing their process for separation of waste material.

However, Harvest is playing its part in order to educate and support the suppliers for development of source separation process, but still the quality of organic waste would depend on the skills of workers and the technology used by suppliers. Whereas, Harvest can control the quality and the quantity of the organic waste supplied by the preprocessing facility, hence, the quality and reliability of the organic waste supply would be assured by its own preprocessing facility. Therefore, Harvest should opt for the development of the preprocessing facility in order to secure high quality and reliable inputs of organic waste. Harvest will have to acquire the equipment and will hire well-trained workers for the management of facility operations. Meanwhile, the whole of the waste will be purchased and processed and organic waste will be sent to Harvest for recycling and generation of electricity. Additionally, the inorganic waste will be sold out or land filled.....................................

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