Owning vs. leasing cleanroom garments
Why direct ownership may not be the most cost-effective solution.
By Bradford H. Whitsel
Cintas Cleanroom Resources
When implementing a cleanroom apparel program, organizations must carefully consider a number of issues, including the costs of garments, laundering, repair, storage, replacement and upgrades. The biggest up-front expense is the cost of the garments. In a rental situation, the initial cost is borne by a service company and passed on to users incrementally. Alternatively, a user may purchase the garments directly. There are valid reasons for both options.
It is logical to assume that purchasing garments would be less expensive than renting them from a service company. This is widely believed to be a principal advantage of direct ownership. The economics of direct ownership, however, are severely impacted by two important factors: the initial cost of the garments and the length of time they will be in service.
Table 1 presents the costs of some typical cleanroom apparel. The garment inventory needed to fulfill the weekly change requirements is shown in Table 2. For the same garments, a user rarely pays the discounted wholesale rate available to an industrial launderer. Except in cases of very large negotiated orders, a user will pay an average of 55 percent more — even when purchasing garments at less than list price. A service company will return to a manufacturer to purchase large quantities of garments year after year in the course of serving many customers, whereas individual companies may make a significant purchase only once every three to five years.
It is simply a matter of buying power. A service company, in calculating its rental price, will attempt to recover the cost of the merchandise and make a profit during the life of the contract. Surprisingly, by the end of the rental period, very often the total amount of money invested by a garment renter is very close to the total investment had the garments been purchased directly. Indeed, in some cases it`s less. For example, as shown in Table 3, a company wanting to purchase high-end, static-dissipative apparel that allows 35 people to change three times per week would invest approximately $35,500. During a three-year period (a common rental agreement term), this sum of money, if invested at an interest rate of 10 percent, would have grown to $47,250.
Figure 1 represents the cost of the initial investment only, and does not include the additional costs of labeling, repairs and replacements during the three-year period. A cleanroom laundry, on the other hand, would probably charge about $12,000 per year to rent the same garments or a total of $36,000 over three years — slightly more than a user`s initial investment but $11,250 less than the total cost of a user`s initial investment after three years. The data in Table 3 is plotted in Figure 1. Although the cost of processing the apparel is not reflected in the figures, it would very likely be the same whether a user purchased or rented. Table 4 presents typical costs of cleaning various items of cleanroom apparel. Garments recommended for use in various classes of cleanrooms and the corresponding frequency of change can be found in the IES-RP-CC003.2 entitled “Garment system considerations for cleanrooms and other controlled environments.” This document is available from the Institute of Environmental Sciences and Technology by calling (708) 255-1561.
Garment service life
The second major factor to influence the costs of owning garments — i.e., the length of time they will be kept in service — is subject in large part to the dynamics of the growing microcontamination control industry. The technologies that define the need for specialty apparel are changing rapidly. New demands for tighter weaves, better moisture-vapor transmission rates, antimicrobial characteristics and improved static dissipation characteristics have prompted fabric mills to introduce, on an almost constant basis, tempting new materials to better meet these needs. Moreover, new construction features have been introduced, and garment styles are as numerous as opinions and ideas.
The point to be taken here is that, because microcontamination control is still an evolving science, there is a very high probability that a particular current production application, which is served by a specific garmenting approach, will be better served by a different approach in the future. The approach could become less demanding just as readily as it might become more demanding. Indeed, the winning or losing of contracts, new
product developments, new manufacturing processes and the general health of the economy all contribute to the high probability that some change in cleanroom garment requirements will be desired. What is more, the need for such garments could even be eliminated entirely.
Therefore, when exploring the impact that garment service life has on the costs of owning garments, the issue is not the life of the garments, but rather, the length of time that they will be kept in service.
The longer garments can be kept in service, the less expensive they are to own when compared to the costs of leasing. It has already been shown that, under normal circumstances during a three-year period, leasing will be more economical. At what point then, if it is desired that the same garments remain in use after three years, does the advantage shift to ownership? If we were to follow through with our example, at the end of the fourth year the interest earnings would bring the initial investment sum to nearly $52,000 — still more than if the garments were leased. In general, it takes about five years for the costs of leasing to equal or exceed the real costs of owning. Unfortunately, this coincides with the approximate end of the useful life of the garment.
There are other factors that contribute significantly to the cost of owning garments. The initial purchase of garments is seldom the final purchase. On average, cleanroom apparel service companies find it necessary, for various reasons, to purchase from 5 to 10 percent more inventory annually to service an account. This is necessary to accommodate additions in personnel, size changes, damaged garments and lost garments.
When a user owns garments, this becomes a direct additional expense that is further aggravated by the need to purchase, receive and integrate the new garments. Professional garment service companies tend to be more flexible in this area for several reasons. First, a broad customer base means that stained or damaged garments can often be used in less critical applications, assuring continued revenue from a garment. Second, because garments are ordered almost daily, the effort required is minimal.
Another major consideration is the lack of flexibility that garment ownership imposes on an owner. A professional service company can shift garments among various accounts to make effective use of used, damaged, discontinued, replaced or obsolete apparel items. Those who own garments, however, are forced to live with them or bear the high cost of replacement should an upgrade be desired.
The same problem exists if, for whatever reason, the need for garments decreases or disappears. Although professional service companies can put used garments to use, it is highly unlikely that they would be amenable to purchasing additional used inventory.
Another aspect of owning garments that should not be overlooked is maintenance. This includes re-marking and re-labeling used garments to accommodate additions, deletions and size changes as they arise, as well as marking and labeling all new garments. A record-keeping system must be developed and maintained to track inventory and assure that adequate spares exist and to control inventory shrinkage.
Garments requiring repair must be removed from the system and temporarily replaced. Because repairs must be made with special equipment and materials in strict accordance with industry guidelines, garments needing repair are sent out. Usually, a company hired to clean garments can be instructed to repair them as required and submit an invoice for the work performed. On the other hand, when renting garments from a cleanroom laundry, since the cost of minor repairs is normally included in the rental price, this additional expense is avoided.
One final factor that contributes to the true costs of owning garments is the value of the floor space dedicated to holding any back-up inventory needed to support additions, deletions, repairs and size changes. The area needed varies, of course, with the size and type of application. In general, the space available is probably better suited for some aspect of production than for garment storage. With a garment lease arrangement, however, inventory storage and control are part of the rental service and, except in unusual cases, occur at a service company`s facility.
It is possible that in certain applications requiring very special apparel, or perhaps in situations involving a great number of employees, direct purchase of apparel might be appropriate. However, for the average application, a rental program usually affords the greatest convenience and flexibility, and will almost certainly be the most cost-effective arrangement.
Brad Whitsel is director of technical marketing at Cintas Cleanroom Resources, formerly Micron-Clean Uniform Service. He is a graduate of Penn State University. He has been involved in many aspects of microcontamination control since 1978 and has held engineering, training and management positions with a variety of cleanroom service companies. He is an active member of several industry trade associations and is on the editorial advisory board of the Journal of the Institute of Environmental Sciences and Technology. For more information, contact him at (717) 267-1740 or [email protected].
Figure 1. Cumulative cost as a function of time for renting and owning cleanroom apparel to serve 35 people changing three times weekly. (Data of Table 3.) Owning cleanroom apparel generally becomes less expensive than renting after about 4.5 years. This is, however, about the same time that the garments should be replaced.
A professional cleanroom garment service company is generally best equipped to manage a cleanroom apparel program.
Maintaining a cleanroom laundry can be very demanding. Cleanroom operators who own their garments will usually find it necessary to assign a person to this task.