When Do Commercial Cleaning Cuts Create Liabilities?

In the last few years, just about all facility managers have been asked by senior management to take steps to save money with their commercial cleaning needs   whether it is reducing costs across the board,  cutting back on services, or deferring maintenance.

This white paper written by Steve Silen, director KPMG Advisory Services, addresses the liabilities of cost savings .   He points out that cutting costs too deeply may result in a long-term liability despite the short-term savings.

He uses the analogy of car maintenance and how expenditure decisions can have unintended consequences.  As an example, he states, “to save money I the short- term, you might choose to delay changing the oil, replacing a balding tire, or investigating a strange engine noise. But in the long run, these choices could result in major and costly car repairs, or an accident causing injury to yourself and others. “

The same holds true in decisions regarding facility maintenance.  Silen points out that a system failure can typically cost more than the cost of the maintenance that could have prevented the failure.  Some companies have benefitted from outsourcing some FM-related costs.  It is a particularly attractive option, as statistics show outsourcing can generate an annual savings of seven-to-20 percent.

> Read full white paper from KMPG: “When Do Cost Savings Become Liabilities?”