Educate’s recent study shows that many schools are paying more than they need to.
At Educate Services, we believe there are many benefits of group purchasing. Not only does it allow us to wield greater purchasing power, it also promotes cost homogeneity across local groups of schools.Waste Management Services is one area where group purchasing can be particularly powerful. Although there are several suppliers within the marketplace, the service provided by each supplier is essentially the same. This means that school waste collection is very price sensitive, with schools’ purchasing decisions being determined by the rates on offer more than anything else.
The graph below shows the cost per bin per lift waste service for twelve different schools.
This graph highlights the variation of prices being paid for the same school waste collection by 12 schools within 10 miles of each other in a borough just outside of London. Despite each school having the same number and type of bins, there was a £20 difference in the lift rates being paid.
This demonstrates the importance of sharing cost information. If a school is aware of what other schools in the area are spending on a particular service they are in a better negotiation position. Furthermore, if the schools collaborate with each other and purchase as a group it is highly likely that savings will be achieved. These savings can soon add up to significant sums.
Why are some schools overcharged and how can Educate help?
There are several reasons why there may be a variation in prices being paid across local schools. These include: contract mismanagement, lack of transparency, imprecise specifications, and unchecked suppliers. We can work with your school to overcome these issues.
It is not in the suppliers interest to actively seek to lower the prices they charge, and therefore the impetus to push the price down rests with the customers. Due to the busy nature of schools, contracts are rarely re-evaluated after the initial contract has expired. Suppliers are usually aware of this and therefore may take advantage of this by increasing their price above the market rate.
Educate are able to monitor and maintain contracts to ensure that prices always remain at market levels. This pushes suppliers to offer schools the best prices available.
Lack of transparency:
A number of suppliers will present prices to schools in aggregate form without an itemised breakdown. Lift rates, rental costs and surcharges are all associated with waste management, but it is rare to see these on invoices. As a result, it is difficult for schools to identify where they are paying over the odds.
Educate has a wealth of experience with dealing with unclear invoices and will therefore be able to identify where you are paying too much.
High costs can sometimes be attributed to the number of bins on-site, or frequency of pick-ups. In order to achieve maximum price efficiency, bins should only be picked up when full. If your bins are picked up before they are full, it is an indication that you may be paying more than you need to.
Educate can help to ensure optimum efficiency and streamline the operations by making sure the specifications given to the suppliers are precise.
It is important that schools, as customers, maintain constant contact with suppliers. This will ensure that they are confident with the services being supplied and all costs involved. Sometimes, suppliers may attempt to deliver services below the expected standard, or attempt to overcharge. There have even been cases in waste management where suppliers pick-up more regularly than was originally agreed, and charge accordingly. It should be explicitly clear from the outset what is expected from the suppliers and what they will charge.
Educate can make sure that all agreements are explicit from the outset and will work to ensure that the original contracts are fully adhered to.