Janitorial Supplies

Commodity Group Description

The institutional and industrial cleaning industry provides essential products and services that are used to clean and maintain a healthy indoor environment for commercial establishments of all sizes and types, including schools, hospitals, day care centers, food service operations, office complexes, and other similar establishments. Although labor represents 95% of the dollars spent on housekeeping, for the purposes of this paper, we will focus on the product side of the equation. The products used in the janitorial industry is very broad and covers everything from hand soap, to floor cleaning chemicals; from toilet paper to scouring pads; from mops, buckets and brooms to heavy industrial floor scrubbers. The amount and type of cleaning supplies varies by industry - hospitals have very different requirements than factories, hotels, restaurants or schools. Ultimately, the proper application of these supplies helps protect us from germs, diseases and other hazards that can be present wherever large numbers of people gather.

In the world of housekeeping, suppliers often use benchmark data to help estimate usage of supplies at a given facility. Naturally, there is a high correlation between the number of people at a facility and the janitorial spend for that building, particularly in regard to bathroom supplies. As a benchmark, it is estimated that paper product usage is 1-1/2 cases per year, per person in office settings and 2-1/2 cases (which includes wipers) in manufacturing settings per person, per year. For Hand Soap, the benchmark is $16.00 per person per year irrespective of the setting. Making sure that the bathroom facilities are clean and have the necessary supplies is a key component to any housekeeping job. The basic janitorial duties are sweeping, mopping and maintaining the floors, cleaning windows, vacuuming, emptying trash, dusting, and cleaning and deodorizing bathrooms. To support these duties, basic supplies include vacuums, brooms, mops, buckets, carts for carrying cleaning products, trash bags, chemical cleaning products, cleaning wipes, absorbent towels, paper towels, soaps and deodorizers, etc.

Industry Analysis

2008 DISTRIBUTOR SALES BY PRODUCT CATEGORY
Product Category Sales Percentage of Total
Paper/Plastics $12,330,000,000 53.2%
Chemicals $ 6,155,000,000 26.5%
Chemicals $ 2,149,000,000 9.3%
Power Equipment $ 1,361,000,000 5.9%
Other Janitorial Products $ 1,186,000,000 5.1%
TOTAL SALES: $23,181,000,000


SALES BY MARKET SEGMENT
Market Segment Sales Percentage of Total
Industrial (manuf. plants/food proc./utilities/warehouses) $3,871,227,000 16.7%
Educational (schools/colleges/universities) $3,338,064,000 14.4%
Contract Cleaners $3,268,521,000 14.1%
Health Care (hospitals/nursing hms/clinics/med/dental) $2,526,729,000 10.9%
Commercial (office buildings/property management firms) $2,318,100,000 10.0%


2008 Chemical Sales $6,155,000,000
2008 Power Equipment Sales $1,361,000,000
2008 Supplies/Accessories Sales $2,149,000,000


2008 Paper/Plastic Sales
Products $2,281,050,000 18.5%
Industrial Wipers $357,570,000 2.9%
Liners & Bags (paper or synthetic/plastic) $2,083,770,000 16.9%
Packaging Products $2,145,420,000 17.4%
Towels/Facial Tissue/Toilet Tissue $5,018,310,000 40.7%
Other Paper/Plastics not listed above $443,880,000 3.6%
Total $12,330,000,000

Top Industry Users

  • Hotels
  • Hospitals, medical/dental clinics
  • Industrial, warehousing, food processing
  • Bars/Restaurants
  • Office buildings
  • Schools
  • Airports


Top Industry Business Leaders

  • Paper/Wipers
    • Georgia Pacific
    • Kimberly Clark
    • SCA
  • Chemicals
    • Heritage
    • Berry Plastics
  • Poly/Liners
    • Diversey (Johnson Wax)
    • 3M
    • Spartan
  • Accessories
    • Rubbermaid
    • Contico
    • Impact

Key Items in the Commodity

Bags & Can Liners, Floor & Carpet Care, Mops, Brooms & Brushes, Odor Control, Paper & Dispensers, Skin Care & Personal Hygiene, Waste Receptacles


Key Cost Drivers

Raw Material Costs (plastic, chemicals), Labor (low cost countries) and energy.


Strategic Sourcing Considerations

Product

As with any strategy, you have to begin with an analysis of your current buy. You need to determine what products are being purchased and then group them by sub-category: hand cleansers, toilet paper, paper towels, tissue, cleaners, etc. Within each sub-category you’ll need to work with your health and safety personnel to determine if it is possible to consolidate to fewer brands, sizes, or types. This is also the place where you can investigate the value of generic alternatives, and standardization opportunities. This will allow you to consolidate the supply base, increase buying leverage, and reduce inventory levels, whether at a single facility, or across multiple locations.


Labor

Given that 95% of the spend within housekeeping is direct labor, your sourcing strategy for the product purchases must take into account product applications/systems that help to reduce the labor component. Proportioning systems assist in the control of chemical usage and ensures proper mixing, as well as helping to reduce the waste and inconsistency associated with manual mixing. Standardization of processes for cleaning functions, the establishment of standards and benchmarks of cleanliness, and ensuring that janitorial personnel are receiving proper training on the application and use of certain products, is essential for your facilities to reduce labor.


Environment

Finally, as the world has grown increasingly more conscious of the environmental impact of choices that we make, the janitorial supply industry has been very active in developing products that are more environmentally friendly. Utilizing recycled paper products and less toxic chemicals has been a key trend in this industry. Be sure to consider the opportunity and potential savings of utilizing these alternative products.



References

i. "Janitorial Supplies For Building Custodians" hubpages.com/hub/Janitorial-Supplies-For-Building-Custodians Web. December 10, 2010.
ii. Contributions from Nichols Paper & Supply
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