J. Michael Hansen
Executive Vice President and Chief Financial Officer at Cintas
Sure, so I'll start with material cost, Andrew. Let me start with -- we source or direct sourcing of more than 90% of our volume and more than 90% of our items have more than one source, and that's really important to keep in mind so that when our vendors may have inflationary pressures on them, the thing to remember is we have choices. And so sometimes that means we do have to take increases, but many times it means we have -- we can flex and we can negotiate and we can -- again we have choices. And so we don't always have to accept every vendor price increase that comes our way when we direct sourcing ourselves and when we have multiple sources. That's really important.
The other thing is, obviously, the amortization of this bucket of expenses allows us to see ahead, to anticipate what's coming. So as you can imagine, when a vendor does come to us and has a price increase, that it takes a while to first of all, build the inventory and then it goes to our distribution centers and after a turn, it comes into our rental locations and that's where the amortization starts, and in month one we have 118th of that inflation for garments, for example, 148th of that for entrance mats.
And so you can kind of get a feel for. It takes a long-time for those inflationary pressures to come to us. That means, we can do lots of planning. We can think about initiatives that we have going on and we can accelerate some of those. We can think about process improvement and we can implement those. But we can also get in at least one annual price increase and maybe multiple price increases before that full inflation hits us, so we can really get ahead of that kind of cost.
So we have choices and we can really see ahead of that and that gives us really nice opportunity to plan the business without a lot of disruption. The other thing I'll say, Andrew, is we've got a lot of infrastructure. We've got a lot of facilities and trucks and things and rents, and those aren't quite as disrupted by inflation or at least immediately. And so again, we can get with our great growth. We can get to really nice leverage on that part of our cost structure.
And then when you think about labor that you touched on, Andrew. We certainly want to make sure that we are maintaining the absolute best partner engagement that we can and that means, we like to be at market or slightly above market rates. That's important for us in terms of the labor rates. But, we've talked about -- we've had a couple of things happen over the course of the last five or six years. One is, we had a lot of G&K synergies being realized over the course of the last six years and that allowed us to be a little bit more aggressive on raising rates. So we were never caught flat-footed in terms of when the labor challenges hit.
That was -- that's been important to us and it's been -- it's allowed us to kind of keep disruption down. But the other thing is, we've talked a lot about initiatives like smart truck, and we talked a lot about the technology impacts in our facilities that allow us to be more efficient. So that means as we are growing, we don't need to add as many resources within the plants or on the routes, and that allows us to leverage that labor environment even in this period of time where we've got raising labor rates.
