Using Spend Avoidance to Control FRC Costs
This is the final post in a five-part series exploring common examples of ineffective FRC practices that have real costs—and practical solutions. We started by reviewing common scenarios that signify opportunity for savings, and reducing costs by transitioning out of rental or lease, eliminating retail spending, and streamlining procurement. In this last post, we examine spend avoidance as a cost-saving strategy.
As your company looks to streamline flame resistant clothing (FRC) procurement – as part of an industry downturn, or to ensure your company is receiving the best possible value – a logical first step is to identify and eliminate unnecessary spending.
Chances are, your company can save money by avoiding purchasing FRC products your workers don’t want – or need. For example,
- Do employees really need 5-7 new coveralls every year?
- Do they need a full set of outerwear annually? A new jacket, insulated bib and coverall every year?
How many of these items do your employees have in their closets, unused? As Stallion Oilfield Services learned, moving to a dollar-based FRC allowance program empowers employees to buy what they need, want – and will actually wear – while limiting total spend by employee. Stallion’s direct purchase allowance program with Tyndale allowed the company to put a hard cap on spending per employee, space pricing out over the first year to help manage employee turnover, and recapture unused FRC funds:
Tyndale’s Cost-Saving Allowance Program
Tyndale’s core cost saving solution employs an employee-based managed direct-sale FRC program currently utilized by dozens of leading oil and gas companies and electric utilities alike.
- The direct-buy approach eliminates the high cost of rental laundry programs.
- A negotiated contract ensures the lowest possible unit pricing.
- Employees order directly from Tyndale, eliminating significant inefficiency and indirect costs.
- The allowance program places a hard cap on dollars spent!
- Unspent allowance funds can be ‘rolled’ into the next year’s spend for the employee or recouped as savings by the company.
Register for our complimentary webinar to learn how one company successfully saved over 50% annually on FRC purchases.
Why an FRC Allowance Program?
Allowance FRC programs have many benefits:
- Employees purchase the items they need, and never purchase unnecessary items.
- Hard cap cost controls are in place to ensure that budgets are always met.
- Employees deal directly with Tyndale for all issue resolution, saving significant unproductive time.
- Employees can “buy-up” for higher quality or premium-priced items using their own money.
- Employees are empowered to own their PPE, thereby caring for it more closely.
- Poor fitting or undesirable FRC items are returned to the vendor for credit, rather than wasted.
Allowance Programs and Employee Choice
This is because workers who are uncomfortable in their FRC are more likely to compromise their protection by rolling up sleeves, opening shirt fronts, shedding protective layers, or even violating company safety policy in favor of clothing that provides increased comfort. This type of employee behavior may open the door to costly compliance issues for your company or legal costs in the unthinkable event of an employee injury.
On the other hand, since garment characteristics are subjective and perception varies from person to person, allowance programs allow employees to personally select the garments they prefer to wear – leading to greater satisfaction and compliance on the job. Allowance programs also provide a straightforward approach for employers to track exactly what clothing was provided to every employee, in the event of an OSHA audit.
Case Study: Stallion Oilfield Services
Originally in a rental program supplemented with retail purchases, Stallion Oilfield Services transitioned to a Tyndale Allowance Program. By employing an annual $400 maintenance allowance, Stallion has placed a hard cap on per-employee FRC spend.
It’s Tyndale’s responsibility to ensure that no Stallion employee spend beyond their company-funded allowance; our automated allowance management system records details for all employee transactions, ensuring all employee purchases are tracked and reported and all allowance limits are strictly enforced.
The direct purchase program now in place has also delivered savings by helping Stallion manage high turnover in its workforce. Tyndale’s program allows the company to space spending out over the first year of employment; if an employee is only with the company for a few months, the company’s spend on FRC to that point is minimized.
Similarly, employee allowances can be increased or decreased as Stallion responds to marketplace.
Plus, in 2015 alone, more than $100,000 of available allowance dollars were not spent by employees – with the company’s option to ‘roll-over’ funding for employees or recoup a significant cost savings!
Sign up for Tyndale’s webinar series to learn more and leverage the experience of others – and hear directly from Todd Mucha, QHSE of Stallion Oilfield Services – who have gone through the process of streamlining FRC procurement.
Ready to unlock savings with an allowance-based managed apparel program?
Contact Tyndale today at 800-356-3433 x679, or request a complimentary consultation to help identify opportunities to streamline your current FRC procurement practices.