A short amount of time
and thought can save your business or organization serous money on your routine
We don't have to
tell you about the present tough economic times. Small business owners, purchasing managers and buyers
have more pressure on
them to keep their maintenance budgets as low as possible. With this in mind
it's more important then ever to take a little time to review your supply policy
and purchases on at least a 6 month basis.
Set aside a couple of hours to analyze what you
have purchased in the last 6 months.
Is their an item that seems unusual or the quantity purchased seems
If so, make a note to find out why. Many supply company salespersons are
trained to push new products on their customers even if they don't need them.
Also sales personal when making out an order for their customers routinely build
up their inventory to meet their quotas and perhaps save a sales and order call.
( Remember excessive inventory can cost you 25%
a year ! )
Review security measures guarding against pilferage. Offices supplies, tissue,
etc. are commonly pilfered by employees.
Analyze the type of products
you are using
Are you buying a national name brand when a
private label is just as good and cost 30-50% less?
Are you buying smaller sizes in the name of convenience rather then cost
effectiveness? Convenience sizes like 16, 28 and 32oz containers are
30-50% higher and more then gallon sizes. Analyze cost per once.
When doing a cost benefit analyses be sure to compare apples to apples. In
other words you must compute sizes, quantities etc. Sounds routine! There is more to
it! You must also compute ounces, sheets, plies, weight, concentration and so on.
Consider a step down in quality. Unless you have a professional office and
want to impress your clients in every way consider buying medium quality
products. Particularly in paper supplies there is very little difference between high and
medium quality standards. The cost difference can be dramatic. Your employees
will never know the difference.
Have you been talked into using automatic chemical flow systems to dispense your
products? Unless your a very large operation these are not cost effective. For
some time now sanitary suppliers have been losing business to large warehouse
clubs and the like. Rather then reduce their margins to compete, their strategy
to counteract this loss has been to push proprietary dispensing systems.
They supply a system at little or no cost citing product and labor control.
Within a very short time they recoup a system's cost by charging excessive
prices for their products. These systems are hardly cost effective when you
compute how much more you are paying per once. Remember only their products can
be used or will fit in their systems. The fact is that now more then ever
maintenance supplies are little more than commodities. The rest is all marketing
in an attempt to maintain falling margins.
Ordering and Delivery
Can you save money by taking a little
time to order your products? Having a salesperson do it for you costs money,
plain and simple. Excessive inventory, products you don't need and high prices
come with dealing with supplier's sales personal. Don't fall for the strategy of
value added service that does not affect your bottom line. Do you really need
help to order paper towels? Focus on service that will save you labor costs.
That's real value added.
Are you picking up supplies at a discount or wholesale club? Are you sending out
an employee to buy products? If so your losing money. Consider these factors!
In the time it takes to go to a club, pick out your items, cart them around,
load and unload them you could be doing much more cost effective work. Consider
what your vehicle, your time and your labor cost. If your sending an employee
watch out! The hidden cost to you is substantial. FUEL COSTS alone
negate any cost saving from a club. Consider the labor cost,
vehicle, potential injury, (driving up your insurance ), poor use of time and
routine pilferage. It's just not cost effective at all.
If you are using a professional cleaning
service you can save a lot of money by buying your supplies instead of having
your cleaning service supply them. Typically cleaning services mark up any
supplies they provide to at least full RETAIL. You can therefore
renegotiate your service contract and expect to save at least half of your
present cleaning costs.
Analyze your purchases.
Do your own ordering or have the person most familiar with what you need
Do not buy more products then you need.
Consider Private label over name brands.
Consider larger sizes.
Use all computing factors.
Consider your quality level.
Avoid proprietary dispensing systems.
Are warehouse clubs really cost effective?
Supply your own maintenance products for cleaning services.