Gilchrist Enterprises owns and operates multiple McDonald’s franchise restaurants in Central Florida. Food, supply and facility costs are tightly controlled and supported by sophisticated systems and the buying power of the McDonald’s organization. One expense area where the McDonald’s name provides little benefit is costs associated with waste removal. Waste and recycling services are generally provided by local or regional vendors, leaving franchisees to procure services and negotiate contracts individually.
Waste and recycling services represent a complex expense category for these three reasons.
Cass Information Systems is a national leader in helping organizations control their waste costs. Multi-location organizations outsource all tasks and business processes related to waste and recycling services to Cass, allowing us to deploy a proactive approach to service and cost efficiencies. With dedicated technology, thousands of clients and over 20 years’ experience developing deep domain expertise Cass is saving its clients millions in waste removal costs and assuming the unwanted burden of waste service management.
When presented with the Cass solution, Howard Hughes, Director of Operations, was admittedly skeptical that Cass could find substantial savings. Only five stores were in open markets, with the ability to negotiate contracts with vendors. The other six locations were in areas in which the municipality selected and controlled waste removal costs. An experienced negotiator, Hughes felt he had secured competitive pricing, but had no way of validating his costs compared to others in his market. The opportunity to gain tighter controls while outsourcing distracting administrative tasks and vendor management was appealing. After meeting with Cass Waste Expense Management experts who were able to provide Hughes with a comparative analysis, he decided to outsource waste & recycling to Cass Waste Expense Management.
Transitioning to Cass was simple. Gilchrist provided their dedicated client manager with copies of waste and recycling contracts, a general service structure overview and recent invoices. The client profile was created in our WasteVisionTM platform detailing waste removal services, contract terms and conditions, location information and specific rate structures.
Using our knowledge-based procurement methodology, Cass conducted detailed analysis for each of Gilchrist’s hauler contracts. Based on prior negotiations within the same region, analyst quickly identified cost concerns and the need for renegotiation. As a managed service provider acting on behalf of Gilchrist, Cass was able to assume negotiations with the vendors. Industry knowledge and relationships added bargaining power, even with months left on some contracts.
As Gilchrist, I don’t think we could have gotten them to budge, but Cass had the volume buying power to get the vendors to the table and commit to lower rates.
Gilchrist Director of Operations
In open market stores, Cass was highly successful in negotiating deep savings. Cost reduction ranged from 20%-27% per restaurant, with a total savings of 23%. For the majority of its closed market stores (where waste services vendors are designated by the local municipality), Cass still found opportunity, negotiating lower recycling rates or the removal of administrative fees. For these closed market stores, Gilchrist achieved average savings of 6.1%.
The other side of the coin for achieving hard-dollar, measurable savings is the monthly invoice audit. Organizations are overbilled every month for waste and recycling services. These overages typically are the result of data entry errors, phantom containers, but more commonly they are across-the-board price increases or hidden fees. Gilchrist was no exception to this occurrence. Within the first eight months of service, Cass prevented 26 non-contracted rate increases and overcharges. Without Cass’ precise auditing capabilities, these non-contracted rate increases, and other charges would have escalated annual spend by 13.37% and counting.
The Cass WasteVisionTM platform calculates an expected amount for every waste invoice before it ever arrives. Enabling a truly closed-loop expense management process, WasteVisionTM identifies in real time, statements that are out of compliance with contract terms or that do not match usage data, prompting quick resolution. Cass sends approved invoices to Gilchrist accounts payable group for payment, working with vendors when necessary to ensure that credits are applied for overcharges.
Gilchrist now has a best-practice process for controlling this expense category. Thanks to this, Hughes now feels confident that they:
As an extension of the Gilchrist team, Cass proactively controls costs and supports the administrative elements of managing waste removal services. Gilchrist employees enjoy a centralized service with first-class, one-stop support for all their waste-related problems and requests. Routine, but time-consuming tasks, such as rescheduling or special service requests can be assumed by the Cass Customer Support team available 24/7.
In addition to an eased workload, multiple benefits will be derived by entrusting Cass with Waste & Recycling Expense management. Service orders, changes and invoice audits are documented within the same system. allowing checks and balances to ensure compliance with negotiated rates.
Cass will proactively monitor market costs and aggregate pricing levels to identify additional opportunities for cost-saving negotiations. Cass also keeps a close, system-driven eye on contract expiration dates and renewal windows. Gilchrist’s contract details are now in a data-driven environment and electronically archived as well.
Through regular reporting from Cass, Hughes now has a clear picture of the company’s waste expenses, contracts and cost drivers.
Additionally, Cass reports on key performance indicators – the savings achieved for Gilchrist – along with what they are spending with waste service providers. Regular reporting allows clients to evaluate performance, adjust services and realize the ongoing value of outsourcing to Cass.
Hughes is clearly satisfied with the results his organization has achieved with Cass. When asked what advice he would give to other organizations, it was simple:
You can’t lose. If Cass accepts your business, they negotiate with your vendors. If they find savings, both you and Cass share the results.
Gilchrist Director of Operations
Hughes and his staff – including store managers – have found Cass responsive and communicative. “The transition to Cass’ management of our waste services was invisible from the point of view of our restaurant staff.” The only visible change was a welcomed one: Gilchrist now has centralized service management. When a waste service is needed, they simply call Cass, and it is handled. “I believe we have greater accountability this way.” states Hughes.
Gilchrist receives approved hauler statements ready to be processed by billing, verified by Cass. Accounts payable teams can respond quickly and confidently, knowing bills are error-free.
We would never have known if there were billing errors or not. Now I know that we only pay what we’re supposed to pay. Now we have a process we trust.
Gilchrist Director of Operations
Without specific expertise and customized technology, truly controlling waste expenses is nearly impossible. Having Cass provide a true waste expense management solution has been a win all around for Gilchrist. “Cass works as an advocate for its clients. They’ve been an excellent vendor partner for us.”
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