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05/26/2022

Houchens Industries Finds Cost Savings Around Uniform Rental & Waste Disposal

Results are based on a 10-year relationship with Fine Tune.
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BOWLING GREEN, Ky. Convenience store and grocery operator Houchens Industries Inc. and Fine Tune, a provider of indirect expense management services, identified opportunities to immediately improve the company's national waste disposal agreements, which have resulted in large immediate cost savings.

These results stemmed from a transition from a simple consolidated broad-based and broker-modeled program to a more focused approach, utilizing four strategically selected vendors that own the hauling assets and landfills near each Houchens store. With Fine Tune acting as the single point of contact for negotiation and transition, this approach eliminated many of the pricing pitfalls and subcontracting "upcharges," according to Fine Tune.

In addition to such optimization benefits and contract negotiations, Fine Tune handles many waste disposal issues that inevitably and consistently spring up with haulers.

When the need for event-driven, non-contract services arises — such as location remodels that require temporary services like extra roll-off dumpsters and pick-ups — Fine Tune ensures Houchens Industries receives the most competitive pricing, the company stated.

More than 10 years after their partnership with Fine Tune began in 2011, Houchens Industries is spending approximately 22 percent less on waste disposal than prior to the partnership.

Similar to that of waste disposal, Houchens Industries’ uniform rental agreement was in a supplier-friendly state when Fine Tune was brought in. In addition to negotiating a more competitive rate structure, an upfront and considerable improvement was made when Fine Tune addressed the "archaic and muddled" billing practices of Houchens Industries' uniform supplier and moved it to a more current and transparent billing methodology.

Post-implementation of the Fine Tune-negotiated uniform rental agreement, Fine Tune worked to get pricing on invoices corrected to the new rates and collect credits for overcharges.

Furthermore, Fine Tune implemented a review process for new stores appearing in the invoicing to avoid Houchens Industries paying for non-Houchens Industries-owned stores. Also put in place were a series of protocols to ensure new, unnegotiated products are not added to the invoicing.

"Given the fluidity of our business, remaining agile is of utmost importance. Fine Tune being in the background to take care of Houchens Industries' uniform rental and waste disposal expenses — taking care of the simplest to the most complicated of issues — has proven indispensable so that we can focus on the everyday complexities involved in our business, which endlessly demand our attention," said Tim Rich, director of property and store development, Houchens Industries.

Fine Tune's efforts in these areas effectively changed the uniform supplier's behavior, resulting in fewer and fewer instances of erroneous billing, and in turn ensuring Houchens Industries obtains its forecasted savings.

"Working with the team at Houchens Industries has been a great experience. It's the classic 'get them to rock bottom and keep it there' scenario we see with many long-standing clients," said Rich Ham, CEO of Fine Tune. "Not only did Fine Tune get the supplier agreements compliant, pricing hasn't gone astray since day one which we are extremely happy about. The suppliers lost the 'price joust' while continuing to deliver top-notch service to the family of Houchens Industries brands."

Bowling Green-based Houchens Industries Inc. is recognized as a successful and diversified 100-percent employee-owned company. Houchens currently owns more than 25 operating companies in various industries, including retail, manufacturing, construction and insurance. Houchens Industries and its affiliates generate annual revenue of more than $3 billion.

Chicago-based Fine Tune partners with companies to source, negotiate, manage and audit certain 'nuisance expense' programs. Fine Tune has also developed proprietary auditing software which monitors client invoices to ensure adherence with the implemented agreements.