Businesses in all sectors will continue to look for ways to reduce their costs. Sometimes budget conscious managers will say that prices paid for supplies are too high and they assume that price is correlated with cost, believing that a drop in purchase price will lead to reductions in costs. But in reality there is a significant difference between price and cost. Price is simply the amount paid for external resources whereas cost is the overall expenditure on products, time, labour and trouble i.e. total resource usage. This is particularly true for facilities management and cleaning operations.
A basic principle to keep in mind is “beware the cost of the lowest price” – often a lower price can amount to higher costs to your business in the long run. Your business may have to pay more for labour time, while products of an inferior quality can reduce the standards your service achieves. It can be as simple as having to use more of the cheaper product than you would have of the more expensive product. For example, investing in a more expensive, but more effective range of cleaning products may be slightly costlier in the short term. However, with attention to usage, dosing control, cleaning effectiveness and time spent, cost reductions can often be achieved. Cost-in-use is a useful concept to consider when approaching these kinds of issues; it refers to the total cost of products, maintenance, storage, consumption and waste.
As every facilities manager knows, the actual cost of cleaning products and materials typically accounts for around 5% of the workplace cleaning budget. Labour takes the lion’s share, at approximately 75%. So if lower priced, inferior products are used, more labour can be required to achieve required standards, escalating real costs and probably demoralising staff along the way.
Investing in better cleaning equipment can also bring great savings and benefits. Often cleaning staff will struggle on with inferior equipment because they are unaware of the most innovative products available today. Talk to suppliers who specialise in the knowledge of new products and techniques that can improve performance and efficiency.
When presented with budget challenges, it is often a good idea to carry a complete holistic review of your operations including working practices, products and equipment so that overall efficiency improvements can deliver the savings required, whilst maintaining operational performance standards.