Onsite labour is a cleaning company’s highest cost. If you want to save money, stop focusing procurement on the cost of goods and look at how your suppliers can help reduce your onsite labour costs.
Far too many business owners hand cuff their procurement teams to hard cost savings because they can see the numbers and measure them.
When I meet with procurement professionals we don’t talk about the hard cost of goods. Instead, we discuss solutions to improve the business and that can change the trajectory of the business.
In the tender process, the cost of goods is the easiest part to get right. It is simple negotiation. You will save 10 per cent on your hard spend and everyone thinks it is a great result. But what if you could save more?
All you need to do to achieve is listen. It is that simple. Salespeople and the companies they represent are not the enemy; they are your biggest asset to reduce onsite labour costs.
Add KPIs to your procurement team that involve supplier and manufacturer meetings regularly. By allowing suppliers and manufacturers to get to know your business over time and in detail, the better solutions they can present.
Meet suppliers and manufacturers of all sizes and ask them about the solutions they can provide that will reduce your onsite labour costs. You will be amazed what you find out.
Some other solutions available are:
1. Electronic receiving of goods delivered without staff involvement – Did you know goods can be delivered to any location and received electronically using barcodes installed at the delivery location. I know of sites where it can take the cleaner 30-60 minutes to get from where they are to receive the delivery. Cleaning is their core function not receiving goods. Imagine how many deliveries your teams must receive and how much time that takes?
2. Goods packed into storage rooms without your staff involvement – Expanding on the above solution – you can have multiple storage locations where the supplier will deliver the goods. How much time do you staff spend putting away goods instead of cleaning?
3. Vendor managed solutions –A complete no touch solution where the suppliers run your storage rooms for you. Minimum and maximum stock levels are set and restocked on a weekly, fortnightly, or monthly basis. Imagine the massive savings for stock never needing to be ordered, rooms being kept tidy, so goods are easily located, and put away on shelves ready for use?
4. Dispenser systems that reduce product use and shorten refill time – Dispensers for chemicals, soaps, and hygiene paper have improved massively over the last few years. They control how much product is used and improve hygiene and safety. Now imagine that your staff only need to inspect and potentially refill these dispensers 80 per cent less than they are currently. How much time does that save?
5. Pre-priced tender baskets of goods (good, better, best) – Imagine if your tender team had at their fingertips every product they needed for a tender pre-priced and ready for them to utilise. What if you had cleaning carts fully stocked and pre-priced with good, better, best options so you could simply select the cart that best suits the client. Your tender team no longer must compile all of that themselves, it is simply there ready for any tender that comes in.
6. Mobile friendly online ordering platforms that streamline the process – It is 2020 and if you are not ordering online then you need to change that immediately. The solutions available through online ordering are in some cases that good that you no longer need to use your systems. Ask for demonstrations that show you how it can massively improve your ordering process and reduce time greatly
7. Electronic invoicing that is GL coded to your needs and simply uploaded – It is possible to have your monthly invoicing sent by email each month in a CSV file in your systems format so you can upload it into your system in minutes with every item GL coded as per your system.
8. Online ordering platforms that offer intimate budget controls – Through the technology available today you can set and forget your site budgets. Online ordering platforms offer amazing abilities for you to set budgets in the most in depth ways you could think of. Once you have set them the system takes care of the rest. No need to check constantly. Your staff can also see easily how much budget they have so they can pro-actively manage it onsite.
9. Elimination of raising and reconciling purchase orders – Businesses can either integrate with their supplier’s system if they still use purchase orders, however, if still using purchasing orders I would ask, ‘why? ‘There are many solutions to eliminate purchase order requirements for low cost goods.
10. Setting up new sites and leaving lost sites – The client does not pay you to set up and leave a site, so your costs are blowing out before you have even cleaned. What if 50 cleaning carts fully assembled and stocked arrive on time to start the new contract. Is there a cost involved? Of course, but it’s nowhere near as much as your staff doing it.
Kabel Vafiopulous is CEO Kabel Consulting
This article first appeared in INCLEAN magazine
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