David, Managing Director of Expense Reduction Analysts Asia Pacific, spent over 10 years managing a national office supplies company and has extensive experience in managing uniforms and personal protective equipment (PPE) over many projects.
Personal safety encompasses a wide variety of items, such as:
- overalls and coveralls
- warning decals, signage and tags
- work boots
- detection equipment
- eye and face protection
- first aid and hydration
- head and ear protection
The safety, PPE and workwear supplies industry has a broad spread of suppliers, from small franchised and owner-operator outlets to national suppliers. As a result, there may be opportunities in reducing the number of suppliers by limiting procurement to suppliers capable of delivering the best quality, at the best price, but also taking into consideration other factors which we will discuss later in the interview.
David—you comment about buyers buying fit for fashion, rather than fit for purpose—what do you mean by that?
There is a great variety of products available, and current fashion trends may influence the decision as to which is purchased, rather than deciding from a pure quality and cost perspective.
For example, workers may prefer Bolle sunglasses for eyewear protection, where a home brand may be equally effective and much less costly. Likewise, with boots, we often see our clients purchasing Timberland boots, where a traditional brand of safety boot brand may be very much cheaper.
This may lead to a situation where the spend across various sites may vary substantially. We have seen variations on one client from $1,200 per employee per annum to $3,200 per employee per annum on different sites, because of different brands being purchased. Such a variation of spends may not just relate to overspending, but at the lower end staff may be underequipped, increasing risk.
It is very important to have a standard policy across the company, to achieve economies of scale and to reduce the opportunity for ‘fashion’ buying.
Where else do you think our readers may be paying too much for uniforms and PPE?
1. Direct Imports: I have seen quite a few examples of procurement departments sourcing cheap products from overseas. This is not to say that the quality is necessarily poorer, although this may be the case in some items such as gloves, but there may be other issues such as:
- Stockpiling – where will the stock be stored and how easy will it be to access it?
- Distributing stock – what are the costs associated with picking the stock and redistributing it to the site?
- If there is a problem, you’re stuck with it – if you do find a problem with a product, the cost and process of returning it is probably going to be more trouble than its worth.
- Meeting the Australian Standard – Many worksites require all personnel to be equipped to the Australian Standard.
2. Purchasing ‘one-off’ products: these will most likely not be on the contracted list and will therefore attract a higher mark-up. Having an approved list will assist both OH&S standards, but also control the cost.
3. Using multiple suppliers: by reducing the number of suppliers, the accounts payable effort is reduced because there will be fewer invoices to process. Another benefit to using fewer supplier is enjoying economies of scale by grouping many products together.
What would your advice be regarding choosing suppliers of uniforms and PPE?
- Ensure you have a range of approved products that have been field-tested and approved as fit for service.
- Negotiate contract and off-contract pricing
- Choose a supplier with the ability to respond to requests that may be out of the ordinary, such as delivery in minimal timeframes, without financial penalty.
- Helping reduce accounts payable effort by reducing the number of suppliers and volume of invoices. This also reduces the opportunity for payment duplication.
- Improving the reporting.
What changes are happening in the uniforms and PPE Industry?
There is a growing awareness of the effect of uniforms on landfill. Whilst we cannot find figures for all states at this stage, NSW estimates 150,000 tonnes of uniforms going to landfill every year. 65% of uniform and workwear are created with man-made fibres. As waste streams are identified, new opportunities arise for recycling.
Vending machines – Controlling stock and stock issue have long been a problem for uniforms. There are many means for distribution with stock held on site, or at the uniform provider, but many are now opting for vending machines. Vending machines accurately control the issue and track usage by person. Monitoring will assist in the control of volume.
Coveralls, shirts, pants and hi-vis – There are Australian standards for the quality of the fabrics used in these items, as well as the stitching and the durability. Unfortunately, many companies find themselves in the position on site, that they must wash and dry garments on a very high heat in order to get them clean and dry without being caked in dust. They do therefore, experience some shrinkage and damage to the fabric. All garments should be made according to the Australian standard and tested for use under the harsh condition which may be experienced.
With so many options available for product and supplier, it is vital to align with a supplier that can cater to the company’s requirements, achieving the right product, supply and the right price.
Why would buyers benefit from using an organisation like Expense Reduction Analysts to reduce their uniforms and PPE costs?
This is another of those cost categories which are difficult to keep track of. Because there are so many line items it is difficult to compare like for like—a cheap product may have to be replaced far more often than a better, but well-priced product. Expense Reduction Analysts can compare quality as well as price.
It is also a huge job to monitor contracted costs to ensure there are no price fluctuations, and to ensure that staff are buying as much as possible off the contracted list. Expense Reduction Analysts will monitor expenditure on a monthly basis to ensure compliance both by the supplier and by the purchaser.
These are just a few of the benefits of using an external analyst like Expense Reduction Analysts, who have the time, expertise and knowledge of the market to ensure savings and achieved and retained.
We help clients to support the health and growth of their business, whatever its nature, focusing on proactive expense and supplier management. As an Australian and global company, Expense Reduction Analysts can benchmark costs and spending, follow the latest supplier innovations, and have real-time data on changes and advancements. This strength gives Expense Reduction Analysts the recognition and power needed on supplier markets to best serve your interests.
For further information, contact Ruth Cohen on email@example.com