This case study focusses on the review of a clients’ cleaning arrangement. An area that is often viewed as being complex in terms of the cost models, transparency and employment laws, the introduction of strong procurement practices can help you ‘see the wood for the trees!’
Our client was a large professional services company with a large branch and head office portfolio. Their in-house facilities management team wanted to improve their approach to procuring cleaning services; the current providers were felt to be not fit for purpose, and the client had suffered from several years of poor cleaning standards.
As a consequence, our client wanted to undertake a full market review of their current arrangements, and look for opportunities to consolidate down to a single strategic supplier which could provide the cleaning service itself, along with various needs for specialist cleaning and operational consumables.
A comprehensive market review was required to create the right consolidation strategy considering the location of the offices, with the best service provider(s) at the best value for money to gain significant service improvements.
- Periodic Cleaning
- Deep Cleans
- Operational consumables
Following due diligence on the category, where we looked to gain a deep understanding of the current suppliers; their cost models; and the performance standards were met (or not!) From the outset it was clear that considerable service improvements were required. The approach to account management had become stale, and the existing suppliers were (in the main) uncommitted to the account. With this in mind, it was clear to us that this project would culminate in supplier change, and as such, our focus was on leveraging our clients’ volumes and marketing this as a great opportunity, with and to the supplier market.
Our strategy for this review was to invoice a two-part bid from a range of national and regional providers;
- Firstly, like-for-like ‘TUPE bids’, which saw suppliers provide an exact like for like proposal. This enabled our client to see the true picture and make an exact comparison of the commercials
- Secondly, to encourage innovation and alternative working practices, an alternative ‘free hand’ bid was invited.
We ran a full tender and supplier selection process. Applying our sourcing methodology enabled us to maximise the benefits from the tender process, on behalf of our client. We;
- Undertook a comprehensive ‘written-response stage’.
- Facilitated site and team visits, to ensure the nuances of the client locations, and their specific needs are known to.
- Hosted supplier presentation workshops, where respondents were invited to articulate their service and cost proposal fully.
- After that, leading structured and robust negotiations with a short list of providers.
- Lastly, concluding with the drafting of a detailed and robust contract for services, to ensure the expectations and interests of our client were protected.
The completion of our tender exercise saw a substantial and positive step change for our client, in both savings and service improvements. Our client appointed a new single-source provider for a period of two years.
Cost savings were significant – in the region of 27% through price reductions, the removal of wastage, the standardisation of cleaning consumables and specification optimisation across the locations where possible – but most importantly, our client now had a stable and reliable partner who could dramatically improve the standard of cleaning across their property estate.
- 27% cost reduction supported by two-year price fix.
- Significant supply chain consolidation.
- Significantly improved the level of service and degree of standardisation.
- Improved account management transparency through relevant MI reporting.