Posts Tagged ‘Cost Savings’

The Cost of Jumbo Making You Roll?

 Make sure you know what is in the box !

• Check linear feet
• o Industry Standard on 2 ply 9″ tissue is 1000′.  There are a lot of cheater and short sheets in the market
• Check the width Standard is 3.8
  • Many manufactures have reduced the width of their Jumbo Tissue to 3.5
• Check the Quality
  • Grey and Crisp – are two words used too describe the majority of Jumbo Tissue sold in today’s marketplace.  There are some  Jumbo tissue that are high quality White and Embossed (for softness)
• Get Back to the Basics
  • The advantages of selling Jumbo Tissue over Conventional Tissue are labor savings and waste reduction
• One 2 ply 1000′ roll is equal to 6 conventional 2 ply tissue rolls
  • Labor Saving on less changes can be significant cost reduction
• On average an end user recognizes 35% waste with conventional tissue
  • There is also much more pilferage with standard tissue 10-15%
• Waste Reduction
  • Few stub rolls throw away
  • No spare rolls on the back of the commode
• Green Considerations
  • Paper is Ecologo certified
  • Less waste also helps with Green certification

 Users that most benefit

• High volume restrooms & Facilities
  •  Schools, Stadiums, Large Industrial Accounts, and High Traffic Areas.

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The advantages of disposables.

1. No effort on collecting and laundering
2. Mop is designed to pick up dust vs wash. He will use less mops and do a better job.  Disposable can be used 10-20 times the average rental.  At the end of the shift brush apply treatment and it is ready to go for the next day. Launderable dust mops are designed to wear well in the wash not dust mop.
   1. Conservatively they are spending $2 each to launder the mops 673 mops every 2 weeks is 2692 per month
   2. Disposables at 10 times more use per mop cost about $670 for 67 mops.
3. They fit is existing frames. 
   

The key is setting a standard on when the mops get changed.  Until they fall off the frame they don’t need to be changed, just brush daily and apply dust mop treatment.  Janitors are spoiled and want a new dust mop every day!  That will be the key objection.  Saving $20K should win out in this economy.

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Supplier Reduction Cost Savings Analysis

-Amerisource Industrial Supply’s mission is to help its customers reduce their maintenance cost by reducing supplier and product complexity.  We also have experience in house staff to assist our customers in solving their maintenance and facility supply challenges.  Finding solutions is our strength and if we don’t know we will find an answer.  Supplier reduction is not a passing fad.  It is a reality and can help your business reduce and control cost in addition to the benefits of adding a supplier partner to your business.  We are subject matter experts in Janitorial, Packaging, Safety, Office and other consumable supply lines.  Our 4 step process will help reduce your MRO supply spend.

1. Analyze current situation and Implement Best Practices
2. Install practical consumption controls and inventory management to reduce usage, storage space etc…
3. Simplify the purchasing, receiving, billing process to the least amount of effort
4. Look for resource and waste recovery

We provide consumable supplies at the lowest total cost.  There is a key statistic most companies over look and that is the soft costs associated with purchasing Industrial Supplies.  Purchasing management statistics indicate that these cost make up 60% of the cost of supplies.  Only 40% of the cost of industrial supplies is the price of the product.  Most of purchasing time is spent on bidding and price reduction.  With commodity prices on the rise this will lead to dimishing returns.  There is a limit to savings based on price reduction alone.  Companies need to look at the entire process and change the model to realize bigger savings.   It is a simple concept. The more that one supplier can do the better the leverage.  Further eliminating internal effort on non value added tasks will reap big rewards.  The old model of requisitions, PO’s to a number of different vendors is out dated.  The most cost effective supply arrangement is;

1. Allow the vendor determine what you need
2. Have the fewest vendors possible
   1. Fewer shipments
   2. Fewer invoices
   3. less Management
3. No requisitions or purchase orders
4. One monthly bill divided by cost center
5. Financial controls and incentives to manage costs

Supplier Reduction Cost Savings Estimate

 Number of Maintenance & Facility Suppliers                             _____________

Annual or Monthly Maintenance Purchases                                 _____________

Cost of Purchasing 20-30% of Purchases

 (PO, Ordering, Receiving, Admin)                X 20-30%              _____________

Inbound Freight UPS, RPS, Common Carrier         +                   _____________

Total Cost of Purchasing from Current Suppliers                        _____________

 Estimated Supplier Reduction Percentage               X                 _____________

Estimated Savings from Consolidating                                            __ ___________

Product & Complexity Reduction Cost Savings Estimate

 Number of Maintenance & Facility Products                              _____________

Annual of Monthly Maintenance Purchases                                _____________

Cost of Product Complexity 5-10%

          (pilferage, spoilage, misuse, overuse)            X 5-10%      _____________

 Inventory of Maintenance Items                                                     _____________

Inventory Holding Costs 5%                                  X 5%                   _____________

 Estimated Product Reduction Percentage                                   _____________

Estimated Savings From Reduction                                                _____________

Estimated Savings Holding Costs                                                      _____________

Total Savings Product Simplification                                              _____________

 Grand Total Savings Potential                                                             __________

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Facts to consider regarding Rental Mat Programs 

1. Most people using rental mat programs think it is more convenient to let the laundry wash their mats. If you analyze this you see that the laundry only cleans the mat one time a week or once every two weeks depending on the service interval. Washing mats once a week or once every two weeks is not often enough to properly maintain them. Between deliveries these mats are usually cleaned daily by the cleaning staff so they won’t look so dirty. So, one day a week the laundry service cleans the mat while the remainder of the week the mats are cleaned internally. With an effective entrance mat, that is designed with a permanent Bi-Level cleaning surface you can own your own mats and conveniently clean them internally eliminating the laundries costly one cleaning per week. 
2. Rental mat programs generally offer the same type of mat for all applications.  These mats are constructed of a non-reinforced nylon carpet on a rubber backing. While this construction holds up well in the industrial laundry process it does not provide the best soil management system to effectively remove dirt and moisture at entrances.  The non-reinforced nylon surface crushes down soon after the mat is placed at the entrance causing the dirt and moisture to sit on top. Dirt and moisture will then reattach to pedestrian traffic and track into the facility.  A more effective program would include a range of mats designed for the specific application including entrance mats with a permanently reinforced bi-level surface, finishing mats, interior mats, slip resistant mats and anti fatigue mats. When you own your mats you can choose the best mats for your specific placement needs.  
3. Users of rental mat programs have little control over the age and quality of the mats being delivered. Rental mats will vary in age from brand new to as much as 5 or more years of age. Because of this age variation it is not unusual for the rental mat service to deliver mats that may be unsafe due to torn edges and rippling. A trip and fall accident caused by a faulty mat could cost as much as $20,000.00. Due to these age differences many mats within the same color group do not match. This is unsightly when placed close together and will reflect negatively to customers. It is not unusual for older mats to go through a re-dyeing process to hide defects allowing these older mats to remain in service even longer. When you own your mats you decide when the mats are too old. You control the quality of the mats in use, guarding against negative safety issues and protecting your well-earned image. 
4.  Rental mat programs usually offer very few size options, as it is more efficient to limit the number of SKU’s they wash and deliver to their customers. The limited sizes they do offer are designed for ease of handling and delivery. Not optimum soil and moisture management. A Carpet and Rug Institute study found that it takes a minimum of 12 feet to remove up to 80% of the dirt carried in on the soles of shoes. Most rental mats do not exceed 10 feet in length and many are only 5 feet long. By owning your own mats you choose the length that will give the coverage you need.   
5. When using a rental mat program you will rarely see the same mats from week to week unless you are renting Custom Logo mats. There is no telling where the mats you have this week were last week. They could have been in a professional office or a meat packing plant. The point is you have no control over where the mats have been before you got them. That’s why it is not unusual for the mats they deliver to have stains, odors, bald spots and soil unless you happen to receive a brand new one. It is not unusual for the laundry route man to skip the cleaning service on mats that do not look dirty as this reduces their workload. To reduce processing costs, many laundries do not dry their mats after washing. This leaves excessive grit; sand and possible mildew odors in the mats. Owning your own mats gives you the reassurance that your mats are clean and ready to do the job they were designed for. 
6.  Usually outdoor scraper mats and anti-fatigue mats are on a no-service lease program and are not cleaned on the once per week interval. It is left up to you to clean these yourself while still paying a high weekly charge. By owning these mats you pay once up front and not weekly year after year. These mats could last several years before you need to replace them.  
7. Buy Verses Rent. Which program is the most cost effective? Rental mat programs will cost approximately $.20 per square foot every week. That’s $3.00 for every 3×5 mat rented every week for an annual cost of $156.00 each! Every year as long as the mat is rented. A high performance WaterHog mat with Bi-Level cleaning surface will cost less than half of that the first year and nothing after that. The three year cost of a 3×5 rented mat is approximately $468.00 verses approximately $75.00 for a purchased WaterHog mat. That’s a savings of $393.00 over three years for just one 3×5 mat.  

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