High-quality products lead to lower total cost
William Atkinson -- Purchasing, 3/4/2004 2:00:00 AM
When it comes to computers and other high-tech equipment, buyers expect to hear about new products on a regular basis. After all, with advances in technology, what's state-of-the-art today can be out of date in three months. When it comes to buying industrial safety and health equipment, though, most buyers expect to see the same things year after year, with maybe nothing new except a higher price tag. This is not the case. Safety product manufacturers are keeping up with the times just like anyone else, and many of the new products feature some innovative technology.
"While the sales of traditional, commodity-type safety products remain steady, we have seen a consistent increase in the sale of technical products," says James Webster, vice president of marketing and vendor relations for DXP Enterprises (Houston, Texas). One reason for the upsurge in the sale of technical products is that the technology is moving along so quickly, (for example new uses for computer chips), that new advancements in products are being announced on a regular basis. "As such, a lot of our customers are wanting to upgrade many of their existing products, which have become outdated," reports Webster.
One example is safety mat controllers. These products contain switches that, when a person steps on the mat, the pressure triggers a switch, which automatically turns off hazardous machinery when the person is getting too close to the machinery.
While the technology has been around for a number of years, a new product, called SureStep, manufactured by Larco (Brainerd, Minn.), makes the technology more accessible to certain users. The mat surface is similar to the grit surfaces that are sometimes in place on steps or around swimming pools to prevent slips. This makes it a lot safer for use in work environments where slipping could be a problem, such as where oil and grease may end up on the floor.
"In these types of environments, companies have typically used light curtains in place of mat controllers," explains Joseph Schultz, sales manager. "One problem with light curtains in oily, dirty and greasy environments, though, is that the lenses can get coated with residue, causing them to shut off, and thus stopping the machinery." With SureStep, companies can now replace light curtains with slip-proof mat technology.
Procurement strategies
Despite advances in technology, many buyers still like to consider safety and health equipment as commodities that can be purchased without a lot of research other than determining the least expensive purchase price. However, for at least four reasons, cheapest price often ends up equating to most expensive total cost. In other words, by buying on total cost, rather than on initial purchase price, you can end up saving a substantial amount of money.
The first reason is quality. Richard Rivkin, president of Saf- T-Gard International (Northbrook, Ill.), recalls a cartoon he saw several years ago with two astronauts in space, one of them being asked by Mission Control something along the lines of, "Do you feel safe?" to which the astronaut replied, "How safe would you feel knowing that everything up here was built by the lowest bidder?"
"We like to resist the commoditization of our product line, because we don't believe that safety products should be lumped together with other commodities like paper, pallets, and shipping supplies," points out Rivkin. "These products provide personal safety to workers, and, as such, quality and reliability are extremely important."
Fred Ryan, vice president of sales and marketing for Moldex Metric, Inc. (Culver City, Calif.) agrees wholeheartedly. "In many cases, the better buy is not the cheapest product," he emphasizes. "If you pay more for a quality product, it will last longer and provide the employee with more comfort, which translates into better compliance."
While quality and reliability in safety and health products are important virtually all the time, they are critically important when it comes to equipment that is used to save lives. That is, while there are some safety products that workers will use on a regular basis for protection from minor injuries, there are others that are in place only for emergencies and must be depended on as life-saving devices.
Quality and reliability can also affect productivity levels due to reduced downtime, which, in some organizations, can translate into thousands of dollars a minute. "We are considered the top-of-the-line in the industry," says Larco's Schultz. "Our products are the most expensive in terms of purchase price. However, when you look over the life of ownership, they are the least expensive to own, because of the lack of maintenance, lack of failures, and long life."
The second reason for selecting total cost over purchase price is comfort of health and safety products, especially PPE (personal protective equipment). Comfort translates into usage by employees. That is, buying based on total cost of ownership rather than price is especially important with safety/health equipment, because the goal is to protect the safety and health of workers. As such, you want products that they will use properly and the most often. "Usage tends to be based on ease of use and comfort," notes Webster. "The safer your employees are, the lower your insurance rates are, and there are other cost savings associated with a safer work environment."
Saf-T-Guard's Rivkin agrees. "If products aren't comfortable, workers won't wear them." His company is seeing new products coming out with much more comfortable features, such as softer earplugs that protect better and safety glasses with dual polymer pads that make them more comfortable against the brow and temples.
He adds that hand protection product manufacturers continue to strive for the "ultimate goal" of affording sufficient protection, lasting longer, and still maintaining dexterity and flexibility. "No one has achieved this goal perfectly yet, but one of the more successful strategies involves seamless knitting with high-strength yarns, plus a variety of coatings, such as polyurethane, PVC or rubber," he adds.
A third reason for selecting total cost over price is the opportunity to streamline supply chain costs. "Cost control continues to be an issue." explains Rivkin. "Astute buyers enter into partnerships with distributors and manufacturers to achieve a long-term goal of continual cost reduction." They work together to make sure that every step of the process works as efficiently and cost-effectively as possible. This means making commitments for maintaining stock levels, delivery times, etc.
"A total cost reduction program will look at unit price, but will also look at things like product standardization, duplicate product elimination, optimum inventory levels at user and distributor locations, and the true cost of worker lost time injuries," he notes.
He admits that these arrangements are not always easy to create. Some managers, supervisors and employees have personal preferences based on years of use of certain products, and it can be difficult to convince them that a standardized product which is different from the one they prefer actually performs just as well, or maybe even better, and ends up costing less in the long run.
The fourth reason for focusing on total cost over price is that certain distributors and manufacturers can offer additional services that, while they do ratchet up the purchase price of their products, end up saving money in the long run.
Example: "Make sure you select a distributor that can properly maintain and repair your equipment," suggests Webster. "We provide maintenance and repair service on equipment. In fact, we are certified by most of the manufacturers we represent to maintain and repair their equipment."
Select a distributor that has experienced people on staff to provide training and other product information. "Also be sure the distributor has good relationship with the best manufacturers, who may also need to be involved in some of the training," continues Webster. "We offer support programs and training materials on how to set up a respiratory protection program," adds Moldex's Ryan.
Also look for a supplier that knows the most current safety standards, both OSHA (which are required by law) and others like ANSI (which, although not required by law, helps provide safer work environments). "It is very difficult for customers to stay abreast of all of the standards and the changes in these standards," emphasizes Larco's Schultz. "This is why you need to be able to turn to your suppliers for this information."
In addition, OSHA will often refer to ANSI standards when conducting inspections, especially in areas where OSHA's standards are weaker or less comprehensive than ANSI standards. "While OSHA can't cite workplaces for failure to comply with ANSI standards, I think there is a move underway in OSHA to begin to embrace many of the ANSI safety standards," adds Schultz.
Many suppliers also offer creative money-saving programs. One such program involves buying back unused safety and health equipment. "We see so much material sitting on customer shelves that is not being used and never will be, because it's out of date or no longer necessary," reports Scott Tipton, vice president of operations for Industrial Mill & Maintenance Supply (Texarkana, Texas). As such, when you negotiate a contract, have a requirement in the contract that the supplier will accept returns on old products and replace them with newer, up-to-date products as necessary. "It may cost you a little more on the front end for this, but you'll save money in the long run by not having product sit on the shelf from which you are getting no use at all," he continues.
Tipton has met very few buyers who consider the idea of returns on safety equipment or even realize that it can be an option. "If you don't want to keep track of obsolete products yourself, find a supplier that has a program for doing so," he suggests. "For example, we have a database that tells when each product was last sold into each customer location. We recommend reviewing the status of unused products at the six-month timeframe."
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