Multi-national manufacturer achieves 47% cost reduction in cleaning

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Hospitality and Catering

Company Profile

An Auckland based New Zealand subsidiary of a multi-national manufacturer.

 

The Situation

The Client had commissioned Expense Reduction Analysts (ERA) to investigate a range of overhead expenses to assess economic competitiveness and improve financial performance. One of the cost categories selected was the provision of Hygiene Services in the form of hygiene equipment, maintenance of the equipment and associated supplies installed in the Company’s washrooms.

The Company had used the incumbent supplier for many years, and while the expenditure wasn’t huge, they were keen to satisfy themselves that they were getting the best value regarding Health & Safety issues, quality and price.

Our Approach

ERA confirmed the annual costs (by product and service) and quickly confirmed, via internal benchmark data, that the Client was paying a premium for these services. ERA met with other quality suppliers and after arranging site visits, invited proposals from all suppliers including the incumbent.

 

The Results

Following the presentation of our analysis and Recommendation Report, the Client selected a proposal from a new supplier which offered improved service quality. Also, savings of 47% per annum were achieved with the added bonus being that the new supplier agreed to fix their prices for 36 months.

“A huge 47% reduction in a cost category that, for many companies, sits well under the radar.”

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