Chemical Leasing Toolkit
Task 3: Pre-define units of payment
The third task is to identify possible units of payment based on the services rendered by the chemicals.
As previously noted, Chemical Leasing is based on a shift from a volume based payment (e.g. $/t of chemical) to a benefit oriented payment (e.g. $/m2 cleaned surface). Table 2 provides examples of possible units of payment in different industry sectors and processes.
Table 2. Possible units of payment for different processes
| Categories of chemicals | Processes | Possible unit of payment | Sectors/Subsectors |
|---|---|---|---|
| Adhesives | Packaging/Bonding | Number of bonded pieces Bonded square meters |
Food and beverage sector Construction of buildings (e.g. for bonding of windows) Manufacture of footwear Manufacture of wood products |
| Labeling | Packed (labeled) bottles Bonded square meters of label |
Food and beverage sector | |
| Detergents, disinfection materials | Cleaning/ Washing |
Occupied room | Accommodation (Tourism) sector Healthcare sector |
| Number of cleaned (disinfected) bottles | Food and beverage sector | ||
| Solvents and detergents | Cleaned pieces Cleaned area Working time /operations (see note below) |
Manufacture of fabricated metal products Automotive industry |
|
| Detergents, disinfection materials | Laundry | Kg of laundry | Accommodation (Tourism) Healthcare sector |
| Oils, greases | Lubrication | Working hours | Mining and quarrying |
| Other types of lubricants | Lubrication of packaging conveyor | Working hours of conveyor Packed product |
Food and beverage sector |
| Powder coatings, solvent- and water-based paints, chemicals for phosphating | Surface protection | Square meters of treated area Number of pre-treated/painted products |
Manufacture of fabricated metal products Manufacture of vehicles and machinery Manufacture of wood products Manufacture of electrical equipment Manufacture of rubber and plastic products |
| Inks | Printing | Printed copy | Publishing and printing |
| Coagulants, Flocculants, defoamers | Waste water treatment | Cubic meters of treated water | Different sectors |
| Bore hole chemicals (Calcium bromide, zinc bromide, caesium formate) | Oil drilling | Daily fee | Oil and gas field services |
| Catalysts | Chemical reactions | t of synthesized product | Manufacture of chemicals and chemical products |
As the table illustrates, in some cases the unit of payment may be based on the operating hours (working time) of equipment rather than on the direct services rendered by the chemicals. For example, in the production of metal parts, there are many parts with different shapes and sizes. It would be difficult to apply as a unit of payment the number or surface area of cleaned parts, and would make more sense to relate the unit of payment to operating/working hours.
Picture 2: Different sizes and shapes of metal parts
Once the chemicals and units of payments are pre-defined, it is essential to check which measurement devices, equipment, and/or information are required to measure, monitor and verify these units of payment. In some cases, several options are possible. The supplier should be able to check whether actual results/outputs correspond to reported figures.
For the lubrication process of a packaging conveyor, the unit of payment could be the number of working hours of the conveyer but also the number of packed bottles. To monitor the number of working hours, the supplier could install a counter on the packaging line (see Picture 3). To monitor the number of packed bottles, the supplier would need to have access to the production company’s database, to check how many bottles were produced.
Picture 3: A counter on the production line
▶ Continue with Step 2 - Development and implementation