Friday, April 29, 2011

PPE WITH THE LOWEST PRICE MAY WIND UP COSTING THE MOST

Nothing causes more confusion, or contributes to more bad buying decisions, than the role purchase price should play in the PPE buying decision process. This post will try to clear up some of the confusion but a little common sense will do the same thing.

Begin with what PPE does. It is called on to save lives and protect from serious injuries. Because of that, it is no place to look for bargain basement prices. If you required major surgery to save your life, would you shop for the cheapest surgeon? Or would you want the surgeon with the most experience and a track record of success regardless of what he charged? PPE is no different.

There is hardly anything that someone can't make a little cheaper and charge a little less for. The problem is they often don't appear to be any different than higher quality products on the surface. But very often the purchase price is the first indicator of quality. A $10.00 hard hat is worth $10.00 and a $20.00 hard hat is worth $20.00. Don't be fooled into thinking they are the same and you are getting a great deal on the $10.00 version. PPE is priced where it is priced for a reason and the price is a reflection of its value.

Your price is only too high if you can get an identical product for a lower price. You must learn enough about the PPE you are considering to see the differences among brands, understand the value of the differences and put the purchase prices in context. "You only get what you pay for" is just as true in PPE as it is with any other type of product. At the base level, you must appreciate that a safety budget is not a savings account. Safety performance is not judged on how much under budget you are; it is judged on fewer injuries and lower accident costs which are only possible with quality PPE.

With PPE, there is a price for non-performance:

1. The most expensive are those products that are so poorly designed ill-fitting or uncomfortable that they are not worn.

2. The next most expensive are products that are stripped of performance features to lower the price and fail when needed.

A safety official or PPE buying decision maker soon forgets what they paid for PPE when it meets expectations. But the consequences are severe when PPE is bought from the lowest bidder and is ineffective.

Actually, a company cannot save enough on the purchase price of PPE to offset the cost of even one lost time injury. Do the math - a company with 500 employees buys cheap head protection to save $5.00 a cap. That is a $2,500 savings on the purchase price. But a lost time injury that might have been prevented with better PPE, costs $50,000. Even a non-lost time injury costs about $7,000 today. So where is the savings?

Looked at in a positive light, investing an additional $5.00 per employee in top quality head protection, could prevent a $50,000 LTI, or a $7,000 NLTI producing an ROI many times greater than the higher investment. Five dollars an employee works out to  $0.025 cents a day in additional head protection. Worth it?

The proper perspective on purchase price is that it is really an investment in protection with an upside and ROI many times greater than the investment expense. In a survey of PPE buying decision makers, purchase price placed 7th out of 10 in importance.  When evaluating PPE, do your homework, find out all you can about what is available, select the most appropriate for your hazards and working conditions, and then, and only then, talk about the purchase price.

No comments:

Post a Comment