ISSA has released a new analysis of data which strongly supports the position that cleaning is economically efficient and, thus, a relatively modest investment in improved cleaning produces substantial returns.
The following is an excerpt from the paper:
Work Ticket Resolution
In 1979, Phillip Crosby published his first business book, Quality Is Free (Crosby, 1979). This quality management book would become popular at the time because of the crisis in North American manufacturing quality. One of the key principles of his book was DIRFT: “Doing It Right the First Time.” During the late 1970s and into the 1980s, North American manufacturers were losing market share to Japanese products largely due to the superior quality of the Japanese manufactured goods.
The premise of Crosby’s work was that every product or service has a requirement: a description of what the customer needs. When a particular product or service meets that requirement, it has, by definition, achieved quality. Crosby estimated that poor quality can cost an organization 30 percent of revenue. He believed that quality management should include the following: quality planning, quality assurance, quality control, statistical gathering, and systems that place quality in its proper context.
Similarly, cleaning requires completing a series of tasks in multiple areas. As such, even a relatively small facility requires successfully completing literally hundreds of individual tasks. Thus, it is easy to see how errors can quickly mount up. Poor cleaning manifests itself in numerous corrective service requests. These service failures impose costs on both the customer and service provider.
It should also be noted that reductions in the scope of work typically produce corresponding increases in the number of work tickets generated. Ironically, the savings obtained by reducing the scope of work are often eclipsed by the costs of resolving service issues.
Service Provider Costs
Service failures are costly for service providers because additional labor is required to correct each deficiency. In addition, each failure involves not only a response, but also a customer interaction that consumes management resources to resolve the cleaning deficiency; the cost to correct the issue goes beyond the work ticket resolution cost. For example, the cost of refinishing a floor may double if not performed correctly or if there is damage to the substrate. Floor replacement costs can be in the thousands of dollars. The true savings associated with quality cleaning operations is the investment in reduced operating costs, asset preservation, and client satisfaction.
Customer Costs (Cost per Work Ticket)
Cost per Work Ticket (CPT) is a very effective metric to “monetize” the impact of an investment in quality cleaning operations. Cost per Ticket is obtained by dividing the total annual operating expense by the annual number of tickets handled. Operating expense includes all employee salaries, overtime pay, benefits, incentive compensation, time, and miscellaneous expenses required to address complaints about cleaning.
The cost of resolving an issue includes the cost to receive added work requests resulting from insufficient cleaning, time/cost to create a ticket, time/cost to schedule rework or remediate the situation, time/cost to complete the added task, time/cost to assess the rework to ensure satisfaction, and time/cost to communicate completion to the occupant originating the request.
While actual work ticket resolution costs vary from organization to organization, the costs are analogous to those required to process an invoice. According to the Institute for Supply Management (ISM, 2004), Aberdeen Group (Aberdeen, 2004) and Profit Planning Group (Bates, 2010), invoice processing costs may range anywhere from $13-49 each. This includes the cost of labor and multiple steps in order processing, order placement, management approval, and vendor interaction.
An average Cost per Ticket can be developed using the average of all work tickets over a representative period of time. It also can be segmented into specific work ticket activities for more detailed analysis of improvement when investing in a certain cleaning function, increased frequency in a specific facility area type, or changes in cleaning tactics.
Dan is also a noted "subject matter expert" on green cleaning and a sought after speaker on environmental preferability, sustainability and green operations and maintenance. He has served as an SME for the International Facility Management Association and IFMA Foundation and is a co-author of the Foundation's "Global Guide on Green Cleaning," as well as a primary contributor to the "Business of Green Cleaning" manual.
Dan is also the association's Director of Facility Service Legislative Affairs and in-house legal counsel, having received his Juris Doctor degree from DePaul University in 1998. He is also a licensed attorney in the State of Illinois; a member of the American Bar Association, the Illinois Bar Association, the American Society of Association Executives; and serves on the Board of Directors of the National Floor Safety Institute.
The leading trade association for the cleaning industry worldwide, ISSA has a membership that includes more than 6,100 distributors, manufacturers, building service contractors, in-house service providers, and others interested in the cleaning industry. ISSA helps its members and their employees make valuable contacts through the industry’s largest cleaning shows, produced in conjunction with Amsterdam RAI, under the brand name ISSA/INTERCLEAN®.
ISSA also helps increase professionalism and networking opportunities through its global Web site, ISSA.com, and by offering business tools, industry standards – including the popular CIMS/CIMS-GB program - and legislative and regulatory services. It is through these initiatives that ISSA increases awareness of the true value of clean and its impact on human health, the environment, and a better bottom line. The association is headquartered in Lincolnwood, IL, USA. For more information, visit www.issa.com.