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Analyzing landscape costs.

Analyzing Landscape Costs

Whether you use your own in-house landscape maintenance staff or an outside landscape maintenance contractor, analyzing your facility's landscape maintenance operations may sharpen your program, lead to better results, and increase cost-effectiveness.

The three most common causes of inefficiency in landscaping and grounds maintenance are equipment failures, lack of supplies, and the wrong people. Here is what to look for in each of these areas.

Equipment failures

Equipment failures can escalate costs in three ways: by the expense of repairs or replacement, by loss of production while equipment is being repaired or replaced, and by management time involved in making adjustments to meet the crisis. Whether you have backup equipment to take care of emergencies or buy replacement equipment, you are tying up capital that might be used more effectively in other parts of your facility.

Even if you have a fast-acting mechanical staff of your own to make repairs or can call on a local distributor or dealer to give you quick service, you are still losing productivity and must reassign personnel while repairs are being made. Do not wait for a breakdown, however, before taking action. Winter is a good time to evaluate the condition of your equipment and get it ready for spring.

Take time to do whatever maintenance is needed. If any equipment requires specialized maintenance, send it out immediately to avoid being caught in the rush of early spring repairs. The winter season is a good time to take inventory and order the parts you will need for routine maintenance during landscape season. This will help to reduce downtime.

Determine if it is worthwhile to continue repairing equipment in the face of more frequent breakdowns. Additional preventive maintenance may reduce equipment failures, but at what cost? The equipment may be so old or in such bad condition that even with better maintenance you may be better off replacing it. Most equipment manufacturers have life expectancy charts to help you decide whether a piece of machinery is worth replacing.

In considering whether to repair or replace machinery, remember that repairs are tax-deductible expenses in the current year, while most new equipment must be capitalized and depreciated over several years. Determine which alternative is best for you.

Also remember that when you replace equipment, you will probably pay more for a similar item. On the other hand, new equipment may save on future repairs, downtime, and lost productivity. New equipment may also have refinements and newer features that make it more productive.

If you are considering buying new equipment, ask yourself if you really need it. You may be better off contracting for the service if you use the equipment infrequently.

Determine if you are buying the right mode for the job. The cheapest model may not be the least expensive. Analyze your purchase on the basis of price, efficiency of operation, operating costs, and anticipated downtime. For example, compare an inexpensively priced, two-speed mower with another higher-priced model with a hydrostatic drive for infinite speeds. The latter costs more, but is more adjustable to different grass textures and does the job faster.

Determine the effect of the equipment on other maintenance operations. A lawn tractor may mow just as fast as a front-running mower with a zero turning radius, but the frontrunner will cut right up to trees and poles, thus significantly reducing hand trimming.

Find out how good the service is. Check the dealer's capabilities. See if parts and service are readily available. One machine may cost more than the other, but the higher-priced one may have better service that will save on downtime and lost productivity.

If you know exactly the type of equipment you want and plan to use it throughout its practical life, you may be able to save by buying last year's model. A few telephone calls to local suppliers may reveal older models in stock that the dealer is willing to move at last year's prices.

If you are planning on new equipment, remember that most manufacturers face order backlogs, as much as 14 to 16 weeks on some types of equipment. You can order substitutes, but make sure they are as efficient and cost effective.

When equipment malfunctions, be sure to account for lost production, administrative time, and the cost of repairs and/or replacements. A large contractor with back-up equipment and available parts in inventory can help keep these costs to a minimum.

Lack of supplies

Not having supplies (such as fertilizers, herbicides, insecticides, belts, blades, pulleys, spark plugs, and caster wheels) on hand when you need them disrupts your schedule, cuts your efficiency, and adds to your management time. More time and money is lost if you must send someone to get the needed materials.

In addition, lack of a herbicide or insecticide at a critical time might encourage the spread of a disease or insect that could cost you additional money to control. The wise maintenance manager projects the total supply requirements before the season begins and keeps close tabs on the situation throughout the year.

Consider the many cost factors. Most suppliers of seed, fertilizer, insecticide, and other landscape goods offer substantial discounts for products ordered in bulk. Few in-house maintenance departments, however, order in quantities large enough to qualify for these discounts. Contractors may order for many customers at once and pay less per item, a savings passed along to the customer.

It may be possible to save money by placing a blanket order in advance and taking delivery of supplies as you need them. If you have the space, you may want to store everything at once. Should you choose this route, check what inventory and pilferage controls are available. Also find out what materials, like liquids, need to be stored in a warm area for the winter. Be sure you are not heating an entire building to take care of a few liquid chemicals.

Remember, too, that insurance premiums will rise when you store hazardous chemicals. (This is also true if you operate certain pieces of equipment or have crew members climb trees.) Using an outside contractor can often keep a lid on insurance costs.

Storage space to house tools and equipment is another overhead expense you can eliminate when you hire an outside contractor. Because the costs of the contractor's facilities are spread out among all its customers, storage is usually far more cost effective than if each customer constructs and maintains separate facilities.

Instead of tying up money in materials, supplies, and storage space, you may decide it is more prudent to subcontract some aspects of maintenance operations. Fertilizing and tree spraying materials, for example, also require equipment that sits idle most of the time. Weed control chemicals and pre-emergent herbicides are other items a subcontractor can apply, saving you the cost of buying and storing them.

The wrong people

The peaks and valleys of the maintenance schedule make it difficult to assign people precisely from week to week, or to reassign them when problems crop up.

"No-shows" can be critical at certain times, especially during a drought when you need extra hands to water. Reassigning in-house personnel, on the other hand, can be tricky. A high-production mower operator may bridle at being assigned to repair turf, while someone who works well under one crew supervisor may not work as well under another.

Sickness and absenteeism are universal problems, but have less impact on a contractor with 100 or more workers than on an in-house operation with a crew of only four or five. Because large contractors have many employees, they can shift people as needed to keep all jobs running smoothly.

Instead of keeping a crew of four or five on a site full-time, the outside contractor normally has the option of putting a larger crew on the job for only a few days each week. By concentrating the crew's efforts, the contractor can put a site into tip-top condition in a short time instead of doing the work over a longer period and creating a situation in which the total job is never completely done.

A contractor usually has individuals on staff who also can detect and prescribe treatment for disease, insect infestation, and other problems that can lead to significant damage if left unchecked. These people generally also are experts on fertilization, turf building, pruning techniques, and chemical application. Remember that in certain states, people who apply chemicals must be licensed and certified.

The truth is, often by the time the in-house crew discovers a disease or insect problem, it has usually gone far beyond the point where simple, ecocal solutions can be applied. This is why horticultural experts, who are trained to catch these problems in their initial stages, can be so valuable.

Do not forget the indirect costs of hiring and training new personnel. Other intangible costs are productivity and the quality of the work. What is the in-house crew's motivation? They will get paid regardless of the kind of job they do. Besides, the in-house staff often is not profit-oriented; the contractor is and builds in efficiencies to ensure a profit.

In addition, most in-house crews have little flexibility. If it rains on Monday, the day grass is always cut, it likely will not be mowed until the following Monday. Or if equipment breaks, there may not be a back-up plan.

Furthermore, the in-house maintenance departments usually must pay substantial wage increases as individual crew members acquire seniority. Independent contractors, on the other hand, usually promote experienced workers to higher levels of responsibility and recruit new personnel to replace them.

Choosing an outside landscape

maintenance contractor

Once you complete an analysis of your property, you will be in a better position to decide whether your in-house staff is meeting your landscape maintenance needs efficiently and cost effectively, or if an outside landscape contracting organization should handle all or part of your maintenance.

The landscape contractor may be a better way to cope with the problems of equipment, supplies, and staff. It generally has the staff to meet peak maintenance needs, can make landscape maintenance needs, can make landscape maintenance more cost effective by freeing funds you would tie up in equipment and supplies, and can free the on-site manager for other tasks.

There are several ways to find a landscape maintenance contractor. Drive around and find out the contractors of other sites you admire. Query similar businesses or trade associations, or ask your suppliers for recommendations. You can also contact your local landscape associations or your local university extension service.

If you decide to use an independent contractor for all or part of your landscape maintenance, here are some other things to consider.

Select the right size contractor for your job. One may be too small, unable to provide large enough crews to keep up with your needs. For example, if your mowing operation needs a five-man crew for four days and that is all the personnel the contractor has, the company will be strapped to do your work. On the other hand, if the contractor is too large, you will wind up paying for costs you do not need. For example, if the contractor's crews are normally five or six people and your job requires only three or four, you may pay for two people unnecessarily.

Another route to selecting a contractor is negotiation. If your landscape maintenance requirements cost more than your budget allows, work with the contractor to find ways to reduce costs. Ask if equipment can be stored on your site to minimize travel, or get the contractor another customer nearby so they can do more work in the same location.

When it comes to selecting an outside contractor, your choice should be based on how good a job the company does for others; its ability to develop a program that meets your budget; and how well it keeps you and your staff informed of maintenance needs.

Spending a little more for a maintenance organization with superior depth, skills, experience, and sensitivities may produce results that more than justify the additional investment.

The landscape maintenance contractor should remind you of seasonal maintenance needs such as fertilizing and spraying. The contractor should also keep you posted on current insect and disease problems and give you useful tips on budgeting, equipment maintenance, and purchasing. In other words, the landscape maintenance contractor you select should be as concerned as you are with preserving the investment you have made in good landscape design.

PHOTO : Look to other attractive properties when choosing an outside landscape maintenance staff.

Russell E. Tolle is district manager for Brickman Industries Inc., the commercial landscape maintenance and contracting subsidiary of The Brickman Group Ltd., Love Grove, Illinois, one of the nation's leading design-build landscape architecture companies. Founded in 1939, the Brickman company has won more than 100 national, state, and local awards for its design and maintenance work across the country.
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Title Annotation:Operating Techniques & Products Bulletin 396
Author:Tolle, Russell E.
Publication:Journal of Property Management
Date:May 1, 1989
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