PROCUREMENT
Delivering the goods on procurement Ethical sourcing and smart technology solutions will be in the spotlight in 2023 as cleaning companies and facility managers seek to improve their procurement outlook Words Cameron Cooper
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or those companies hoping that their supply-chain and procurement woes will ease this year, Kim Puxty issues a reality check. The CEO of the Building Service Contractors Association of Australia (BSCAA) says cleaning operators can expect costs for essentials such as machinery, chemicals and consumables to rise over and above forecasts. Such inflationary pressures will inevitably make it difficult for contractors to meet fixed-priced contracts for terms of three years or more. “In the current climate, it is becoming impossible for cleaning contractors to enter into ‘fixed-priced’ contracts,” Puxty says. “The costs for equipment and chemicals are constantly on the rise and the percentage increases vary. A 3 per cent fixed-price increase will not cover increasing costs.” This procurement truth underlines the importance of cleaning contractors having 32 INCLEAN March / April 2023
trusted and transparent relationships with their suppliers so they can ensure supply – and not always chasing the lowest-cost items. Puxty advises: • dealing with suppliers that have multiple distribution centres and can service areas other than the metropolitan centres • ensuring contractors and their suppliers have robust systems in place to ensure compliance with Modern Slavery legislation, environmental, social and governance (ESG) principles, and indigenous engagement • increasing the use of technology to streamline ordering and dispatch processes. In the United States, cleaning industry veteran Steve Ashkin, founder of The Ashkin Group, says companies should continue to “plan for the worst and hope for the best” when it comes to procurement in what are very complex global markets.
“That remains a good business strategy,” he says. “We should anticipate supply-chain disruptions for a lot of reasons and, candidly, shame on us if we don’t plan for it.” While he supports the notion of building robust relationships with vendors and partners, Ashkin warns against getting “too comfortable”. “There’s a lot of value in building really strong relationships, but it’s important for procurement people to really search out other sources of supply. Don’t put all your eggs in one basket.” In addition to sourcing locally, Ashkin is an advocate of streamlining warehouse distribution and maintaining higher levels of inventory to offset the risk of shipping delays. However, he concedes that there can be a “real cost” to doing so. “When we talk to clients, we discuss what are the critical items that they need,” he says. “They don’t perhaps need the same inventory levels across the board, but really it’s about