ERA Canada - Laundry Services Case Study
By: Stephen Machin, CMA

This month’s case study focuses on the uniform and mat costs for a major distribution company located in the GTA.  This client recognized that they did not have the level of expertise, or the internal resources, to determine if the pricing they were being charged for their laundry services was in-line with the market.  They engage ERA Canada because we could provide the inside industry knowledge and had the resources to deliver the savings quickly.

Client Overview

An industrial products distributor of chemical products spent $40,000 annually on uniform and mat laundry services.

Our Client’s Goals

To better understand their current laundry usage patterns to identify options that would reduce their overall uniform and mat costs. 

The ERA Process

The ERA Expert employed our Intelligent Cost Reduction process to meet the needs of the client. ERA studied the client’s existing contract and reviewed invoices over the life of the contract to determine if any billing errors have occurred.  In addition, the current charges were compared to our knowledge base to determine if the existing pricing was in line with the market.

Our Expert studied several months of laundry services history and met with the direct users to understand the critical issues surrounding services levels and delivery.  It was determined that the service levels were deemed to be excellent, however, issues related to pricing were identified.  Given that there was almost 3 years left on the existing contract ERA Canada and the client agreed to focus on renegotiating with the incumbent.

The Result

ERA presented the client with a Recommendation Report that identified $27,000 in historical overcharges, 48% in price savings and 16% in usage savings (i.e. eliminating items that were deemed to be not required).  Over the life of the new 5-year agreement the total expected savings are approximately $139,000.