Apartment Managers can become obsessive about saving money on maintenance supplies. Sometimes the efforts to justify pricing from supplier A over supplier B have grown to simply outweigh the savings that might have been achieved. When you evaluate the savings, you need to include the hours of surfing, researching and shopping. Only to find that mystery supplier that you fought so diligently to have approved by your organization only achieved a 5% savings.
Managers are very protective of their budgets. They work diligently to make sure expenses don’t exceed their budgets. But there are some expenses that are sneaking their way into our expense management that have a much deeper impact than we might realize.
How often is your team purchasing supplies from a local provider instead of purchasing through an account that delivers the supplies?
While there are benefits to supporting local businesses, but here are a few points that should be considered.
Saving with National Discounts
First the local store does not offer your community the discounts in pricing that are negotiated through national contracts. Occasionally, there is usually a compelling reason for that quick trip. We need one little part to finish a repair, or there’s an emergency leak that needs a special supply line or fitting. Its easy to justify this expense. This represents a situation that is an exception not the primary source of maintenance supplies.
Saving Time and Mileage
Whenever we make a local purchase, we need to understand; the cost of this item, is not the total cost of the item. Its not that we’re spending seventy-five cents for a package of washers. That purchase might costsless than a dollar at the store register, is costing your community time and mileage. Depending on location, ranging from one to five miles you could be adding as much as $3.00 in mileage reimbursement to that purchase price. Now, for the big piece, you’ve probably invested at least an hour in time for making that purchase. So now depending on the rate of pay for your technician you have just added another $15 to $20 into the cost of the items purchased on this quick trip to the hardware.
Again, there are reasons and justifications for emergency purchases. But when we review the monthly expenses, comparing source and providers for our purchases can identify the balance between expense types. Without guidance, we could see daily purchases. Accounting for hours of productivity, and travel time that impacts the maintenance budget.
If we’re going to cost compare to justify the value of the local expense, again; we need to consider the national product (within most guidelines) includes the shipping cost. When someone on your team is leaving the property to pick up supplies, you have to add in that time away, and the mileage expense if you truly want to create an apples to apples comparison.
For some reason, properties seem to fall into habits, believing its easier to make the quick trip to the store instead of having a sufficient supply at the beginning of a repair.
Then we start to see three and four occasions per week where the hardware has been the resource. The added impact of mileage and time lost becomes a concern. In addition, we’re often faced with the not enough time to handle resident service requests, completing turns and preventive maintenance. If we add back in two, three four hours a week that were dedicated to obtaining supplies what does that enable us to accomplish with that additional time, with 4.3 weeks in a month..or 52 weeks in a year. We can create a maintenance savings of over a hundred hours a year. With average maintenance wages increasing, we can see how the maintenance savings add up.
We all seem to be quick to disparage individuals who pay too much for a product, or a service. But if we aren’t paying attention to the disruption of the work day schedule with a trip to the hardware, we could easily be the victim that’s paying $20 for a package of drywall screws.