Are You Comparing Chemical Costs Wrong?

On the other, the aged care industry is strapped for cash, and it’s your job to make savings for your facility.

You’ve got two conflicting needs:

• Management need to reduce operating costs 
• Staff members need better quality product

How do you solve for one problem without compromising the other?

One approach is to better understand what total cost involves.

The Total Cost of Hygiene Consumables

Costs are deceptive, hiding below the surface.

Saving on unit cost may not give you better value for money. There’s more to a product’s total cost than its price.

Our experience in aged care facilities has shown us the components of total cost. There are three main categories: 

• Product – including features and product quality. Not all are made equal.
• Setup – how well the facility is set up to enable efficient usage
• Practices – how efficiently the product is used

There’s a lot to cover, from factors of product cost to the practices and setup that affect usage. 

Today, we’ll focus on Product Quality – how active ingredients can affect the total cost of chemicals.

Let’s take the example of automatic dishwasher detergent.

Table 1: Cost comparison of Accent W35 and Product X (prices* as of December 2020)

By this analysis, the cheaper option is Product X, with 20L of detergent at $6.29 per litre.

There’s one key feature missing from Table 1 – the levels of active ingredient. 

In both products, the active ingredient is sodium hydroxide (NaOH).

Sodium hydroxide breaks down the proteins and fats on dishes and cutlery. It determines the effectiveness of the chemical.

Table 2: Levels of NaOH in Accent W35 and Product X, and adjusted costs*.

W35 has a triple concentrate of sodium hydroxide, delivering approximately 3 litres. 

Product X has only 4 litres of active ingredient in 20 litres of chemical.

Our formula divides the bottle price by this estimated amount of sodium hydroxide. This shows that the active ingredient costs nearly twice as much per litre in Product X, due to the lower concentrate.

Also, Product X’s lower level of sodium hydroxide will influence usage. 

An automatic dishwasher will dispense more chemical to compensate for the reduced effectiveness.

The increased usage produces:

• shorter buying cycles
• more product purchased
• a higher annual cost for Product X than Accent W35.

In case you’ve been skimming, there’s more to the cost of a chemical than list price. 

You should dig below the surface to ensure you are comparing apples with apples. 

An accurate chemical comparison will include active ingredient ratios, uncovering any usage costs.

*All details are estimated.

This article is the first of a series on the total cost of hygiene consumables.

Subscribe here so you don’t miss the next article. See our second post.