An effective cleanroom garment program is a vital component of any successful cleanroom operation, but it can often seem like a necessary evil; an expense item that seems to be forever trending upwards over budget. The good news is that the costs of cleanroom garments can be reduced to reasonable levels, in many cases by thirty percent or more. The starting point must be with understanding and negotiating the best pricing for your unique requirements.
There are many ways that pricing for cleanroom garment service can be structured, and just as many ways price quotes can be misconstrued. Your company may not be able to negotiate the lowest unit prices. Or, perhaps you managed to secure great pricing, but your costs still remain high. Whatever the circumstances, in order to successfully negotiate and make accurate comparisons, it’s necessary to understand the many pricing factors in a cleanroom garment contract, beyond unit prices. Here are six critical issues to address:
1. Choose the right systemDecide whether to purchase your garments, or to lease or rent them. When considering purchasing garments, remember that the size distribution of the population wearing the garments will shift over time, and you could be left with a large quantity of unneeded garments. Leasing or renting garments comes at a higher price, but should include the ability to return unneeded garments and change the size distribution of the inventory.
What’s the difference between “renting” and “leasing” cleanroom garments? Traditionally, “renting” implies a comprehensive service and a single price that covers the cost of the garment and it’s processing. Rental charges are often levied week-in, week-out whether or not the garment is used. “Leasing” or “Lease-clean” normally breaks out the cost of garments (lease) as a line item that is constant regardless of use, and cleaning charges as a separate variable line item. However, these terms are often used interchangeably, so ensure that you are talking about the same type of program with your suppliers!
2. Establish Inventory and Billing LevelsIn the cleanroom laundry industry, inventories drive pricing. If you rent or lease cleanroom garments, understand that the “inventory” is all items that are assigned to your account. Inventory levels dictate your billing charges, so regularly reviewing and adjusting inventory levels to reflect current needs can be your single largest cost-saving step.
Here’s how to determine if inventory levels are appropriate:
The number of people actually wearing garments.
The frequency with which wearers are required to change garments.
The frequency on which clean garments are delivered. Typically weekly, but may be longer if laundry is not local, or if special processing such as sterilization is required.
For example, a component assembly plant with 50 garment wearers requires that they change garments once per week. A local laundry delivers weekly, and there are no special processing requirements. The recommended inventory is per worker is 3 garments: one being worn, one in process, and one delivered clean, for a total inventory of 150 garments.
If you have 200 or more wearers, evaluate inventories every month. With fewer wearers, a quarterly evaluation maybe adequate. Your laundry service vendor should be able to provide a slow-moving inventory report, which will highlight any garments that can be returned to the laundry to reduce inventory levels.
3. Select the best billing formatIn the above example of an inventory of three garments per worker at an assembly plant, if the garments were being rented the charge would typically be levied on one garment per week; if they were leased typically there would be a lease charge for each of the three garments per week and wash charges for any garments laundered in a given week.
If you choose to rent garments, determine if the billing is based upon the total inventory of garments in service, or on a percentage of that number. If leasing garments, with the billing divided between the cost of providing the garments and the cost of laundering them, understand on what the billing quantities for each are based. Choose and compare quotes based upon the billing format that will most closely match your actual garment use.4. Minimize Secondary ChargesLost or damaged garment charges can add 8-10% to the cost of a cleanroom garment program, so take internal steps to prevent these potentially expensive liabilities. Address the causes that damage garments, the three most common are equipment snags, inappropriate use (e.g. in sub floors) and poor de-gowning habits.
Further, control the repair process by educating wearers on what constitutes damage and what doesn’t. Garments incorrectly rejected as damaged are often re-laundered multiple times without ever being segregated for repair! Make it easy to segregate damaged garments, and check that they get repaired!
Define repair processes, costs, and turnaround times with the laundry. Investigate any major fluctuations in repair charges. Repair charges should trend within a stable range over time. A major change in repair charges typically signals a new issue that requires your attention.Be alert for miscellaneous charges, such as “waste water” “environmental” and “delivery” charges, which can all add a further 5% to your invoice total. If necessary, explicitly define the types of charges that will not be paid.
5. Limit Price IncreasesHave you been caught off guard by unannounced price increases? They may seem arbitrary, but you can put yourself in a position to limit their impact. Carefully review price increase language in agreements; it can range from automatic annual increases to increases on an irregular frequency. The rate of increase can similarly vary, from a fixed percentage to an increase tied to an economic indicator. Negotiate what you believe to be a fair and reasonable resolution that meets both parties’ needs.
6. Avoid Long-term LiabilitiesCleanroom laundries depreciate the value of any garments they rent or lease over a set time horizon that typically ranges from three to five years. Ensure that the terms of any agreement and the depreciation schedule for garments are compatible. For example, a one-year agreement may appear to maintain flexibility for the customer, but if the laundry expects to depreciate the garments over several years, at the end of the first year there will be a large un-depreciated (residual) value in the garments for which the customer will still be responsible.
This residual value is also important in the event that an agreement is prematurely terminated or if a garment is destroyed. The laundry will calculate the remaining garment value and charge that back to the customer. In the event of replacing a destroyed garment, the depreciation schedule will begin again on the new garment, often extending beyond the expiration date of a current agreement and creating a future potential liability.
Ensure that you understand and document the garments’ initial starting values, the time period over which they are to be depreciated, and the arrangements for replacing garments. If you wish not to have residual value remaining in garments at the end of an agreement term, ask your laundry to “front-load” the depreciation on replacement garments so that their depreciation schedule matches those of garments already in service.
Address these six crucial issues within your cleanroom garment program and you should see the cost of this particular “necessary evil” contained and stable for years to come.Tony Rutt and D.J. Netz
About the authors: Tony Rutt and D.J. Netz operate CleanFit Systems LLC in Portland, Oregon. www.CleanFitSystems.com. They have a combined twenty years experience in the cleanroom garment industry. CleanFit Systems audits cleanroom garment systems and implements efficient, hassle-free gowning programs that are simple and straightforward to manage, for wearers to comply with and for laundries to service.