FACILITIES MANAGEMENT IN A SERVICE SUPPLY CHAIN PERSPECTIVE

Transcription

1 FACILITIES MANAGEMENT IN A SERVICE SUPPLY CHAIN PERSPECTIVE Henning de Haas * Anders Peder Hansen ** *) Department of Entrepreneurship and Relationship Management, University of Southern Denmark, 6000, Kolding, Denmark hdh@sam.sdu.dk, Tel: ; Fax: **) Department of Entrepreneurship and Relationship Management, University of Southern Denmark, 6000, Kolding, Denmark apha@sam.sdu.dk, Tel: ; Fax: Paper is published as: Haas, d.h. and Hansen, A.P. (2010), Facilities Management in a service supply chain perspective, in: Arlbjørn, J.S. (ed.) (2010) Logistics and Supply Chain Management in a Globalised Economy, Proceedings of the 22nd Annual NOFOMA Conference, June 10-11, Department of Entrepreneurship and Relationship Management, University of Southern Denmark, Kolding, pp

2 ABSTRACT Purpose of this paper The focus of the paper is the operation of buildings and supply of facilities (FM) services. The purpose of the paper is to analyse the concept of FM in a service supply chain (S-SCM) perspective by making a comparison of FM and S-SCM. This leads to the identification of managerial processes that can contribute to the development of FM as a service function. Design/methodology/approach The literature review focuses on Service, FM and S-SCM and is supported by two illustrative case examples of FM from different FM organizations. The cases are based on semi structured interviews with people responsible for the FM services of the particular organization. Findings The findings of this paper are twofold. First, it was uncovered through a literature review that only a few contributions were found dealing with the combinations of FM and SCM, FM and S-SCM. However, FM definitions are actually containing elements of S-SCM. On the basis of this FM in an S-SCM context could lead to a new role for FM and support the positioning of the FM function from primarily being reactive to proactively contributing to improving return on investment in a facility. Research limitations/implications (if applicable) This research can be seen as conceptual with the aim of analytical generalizations. Although the empirical cases are used to increase the trustworthiness of the theoretical analysis, further discussion and testing of the implications of FM and S-SCM are needed. In the analysis will focus on the FM areas space, operations and service as these are seen to encompass the continuous flow of services between FM and the users of the facility. Practical implications (if applicable) The operation and optimization of facilities resources is a complex task often affecting several user groups. This indicates that the FM function needs new competences to be able to better support the business development. What is original/value of paper So far, no research has explicitly focused on FM and S-SCM, outlining the similarities and differences. The conceptualization of FM in an S-SCM perspective is an attempt to support the positioning of FM as a service function. Keywords: Facilities Management, Service supply chain. 1

3 1. INTRODUCTION The concept of Supply Chain Management (SCM) has traditionally been focused on manufacturing, the flow of physical products and the related information flow and business processes. Over time the area of service supply chain (S-SCM) has obtained increased awareness in SCM research, and the concept has evolved and is now also covering services (intangible products) (Ellram et al., 2004). Similar to SCM in general, SCM in a service context is concerned with designing and managing supply chains and controlling its assets and uncertainties in order to meet the needs of the customers in a cost-effective manner (Ellram et al., 2004). SCM in a service context has its main focus on the twin-objectives of both creating service improvements and cost reductions (Slack et al., 2004). A parallel development is found in Facilities Management (FM) research (Alexander, 1992, 2008; Jensen, 2008), where the focus is on the ability of FM to add value to the customer. However, the focus of the research contributions seems to be mainly in the area of optimization of sourcing and procurement (Ventovuori, 2007), (Ventovuori and Lehtonen, 2006), and in the construction of buildings. Green et al., (2005) argues that the traditional industry perception of SCM must be altered to fit in construction. Another element hindering the use of SCM is the perception of the industry as having a high degree of fragmentation (Cheng et al, 2010). Green et al., 2005 point at one of the key elements of traditional SCM, the trust element, as the key challenge in implementing SCM practices in construction. The responsibility of the FM function in the operation of buildings can be described as the supply of services that support customer, client and user needs (Grimshaw, 1999; Jensen, 2008). However the FM discipline is in a state of flux, as it is trying to claim a position as a strategic discipline that can support and develop the core business by optimizing and developing the use of the facility (Barrett, 2000). This is supported by a growing tendency towards outsourcing of FM services, following the formation of FM as a field and professional FM companies supplying complete facilities services. In the UK more than 50% of non-core services are outsourced and in Denmark the equivalent number is estimated to be 62% (Davis, 2004; Jensen, 2008). A rising technological development in intelligent building solutions has increased the task complexity of facilities services and increased the dependency on expert knowledge (McEntee, 2000; Salonen, 2004). The operation and of these building systems and facilities services may therefore include several supplier s with various degrees of complexity. Operation and must be done in accordance with both owner and user objectives. Facilities owners often focus on cost cutting in FM services, but at the same time critical service level expectations from users and customers must be satisfied, and furthermore these groups may not always be the same. It can be argued that the and organization of facilities services is a complex task requiring competencies related to different organizational functions at operational as well as strategic levels Therefore this paper proposes supply chain as a managerial framework for managing FM service delivery. The paper is organized in four sections. The following section provides a theoretical frame of reference through a literature review of FM, the service concept and service supply chain (S-SCM). Then follows a section on the research methodology used. Based on this theoretical analysis and comparison of FM services and S-SCM are made in the third section. In the fourth section the two illustrative case studies are analyzed and discussed according to the framework. The final section presents discussions, implications and conclusions of the paper. 2

4 2. LITERATURE REVIEW The overall theme of the paper is service in the context of SCM and FM. Therefore the literature review is organized with an introduction and definition of FM and FM in a service perspective and finally a section on S-SCM Facilities Management The discipline of facilities has evolved from traditional operations and maintenance (O&M) and was used for the first time in 1980 in Michigan (Willis, 1992). FM takes a broad perspective on the of facilities, where traditional O&M tasks such as supply, maintenance and cleaning are part of a broader scope of tasks (Jensen, 2001). However, the literature contains several definitions of FM. The table below (Table 2.3) presents the most common FM definitions. Table 2.1 Definitions of FM Definition...an integrated approach to operating, maintaining, improving and adapting the buildings and infrastructure of an organisation in order to create an environment that strongly supports the primary objectives of that organisation (Then, 1999). Alexander (1996) defined FM as:.. the process by which an organization ensures that its buildings, systems and services support core operations and processes as well as contribute to achieving its strategic objectives in changing conditions... (Alexander, 1996) Facility is a profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, process and technology (IFMA, 2010)... as the integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of primary activities EuroFM definition (Alexander, 2008). Management focus Operation and maintenance New building and renovations Understanding business objectives All aspects of property, space, environmental control, health and safety and support services Supporting strategic business objectives FM as multidisciplinary Integration of people, process and place Supporting and connecting to primary business processes Common for most FM definitions is that they have a focus on the workplace environment and the service processes that support and enhance the core activities of the organization. FM areas can be divided into hard and soft FM, and Jensen (2008) uses the European FM standard (see Table 2.1) and divides FM into the following areas. Investment Financial Space Operation Service. Thus FM is often seen as a support function, but according to Jensen (2001) it must be seen in connection with the primary business. However, the fact that FM is often seen as a support function does indicate that it often is viewed upon as peripheral and therefore is subject to a typical cost focus. As this paper is interested in identifying the processes of FM 3

5 services, some of the contributions in this area will now be identified. There have been several attempts at positioning FM in a context, and several attempts of giving FM a distinct knowledge base, as FM is seen to be discipline borrowing from other disciplines (Yiu, 2008; Price, 2002; Tay and Ooi, 2001). Yiu (2008) argues that roles and tasks should only be carried out by FM, when FM has the best knowledge to undertake this role. Yiu (2008) positions FM between intra-firm strategic and inter-firm project with four strategic roles including: Sourcing of supporting services; Sourcing of workspaces; Sourcing of funds from infrastructure facilities and Assessment of quality and performance of facilities. Then (1999) takes a similar perspective, though taking a broader perspective through an integration of FM dimensions in business planning based on strategic facilities planning; strategic asset ; asset maintenance and facilities services. According to Barrett (2000) FM tends to be technically oriented and reactive. A model identifying the linkages within the FM unit and between FM and the core business environment is proposed. Thus this approach focuses on establishing the necessary s between FM and the core business organization. Then (1999) describes a requirement for processes for monitoring strategic facilities provision and operational requirements and their performance as well as a requirement for appropriate skills within the FM function to handle these processes. In this context Noor and Pitt (2009) are some of the first to apply SCM in facilities suggesting that the application of SCM can help organizations establish a more sustainable purchasing strategy for FM services as well as a more effective organizational supply chain for service delivery. This would also require stronger s between internal client functions and between client and service suppliers as mentioned by Barrett (2000). McLennan (2004) also find that the lack of conceptual or theoretical framework is perhaps in part the reason why facilities remains misunderstood in the general business sector. The author views FM as a service function, by presenting service operations as a conceptual framework for FM. This framework puts the customer in the centre of the delivery of FM services, but does not elaborate the managerial processes supporting this. It is however interesting in a supply chain perspective and supports the idea of viewing services in a supply chain perspective. Before placing FM in a SCM perspective it is found relevant to clarify how services can be characterized and what constitutes services Defining services In general services are characterized by a moment of truth, as where the customer experiences and evaluates the quality of the service delivered by the service provider (Normann, 2002). This indicates some kind of interaction between customer and service provider. Therefore Normann (2002) claim that services should be classified in terms of personality intensity, as the quality level provided is dependent on factors such as skills and motivation of the service provider. This may be backed up by more or less capital intensive equipment such as advanced technology. However not all services include any direct interaction between customer and service provider, as is the case of some FM services, which will be discussed later. Thus services may be delivered with more or less human interaction and may be more or less dependent on technology, but as mentioned the skills and motivation of the services provider are important for the experienced service level. As this paper focuses on the concept of FM in a S-SCM context it is relevant first to define how a service can be 4

6 understood in general. Table 2.2 shows the differences between physical goods and services as depicted in the service literature (Grönroos, 2000, p47). Table 2.2: Differences between services and physical goods Physical goods Services Tangible Intangible Homogeneous Heterogeneous Production and distribution separated from Production, distribution and consumption consumption simultaneous processes A thing An activity or process Core value produced in factory Core value produced in buyer-seller interactions Customers do not (normally) participate in the Customers participate in production production process Can be kept in stock Transfer of ownership Source: (Grönroos, 2000, p.47). Cannot be kept in stock No transfer of ownership However, the definition of the service concept in table 2.2 presents a rather static view on services. Services can be classified according to a number of dimensions, as seen in table 2.3. The table presents a summary of various dimensions which can characterize services (Grönroos, 2000; Normann, 2002). Table 2.3: Service classification parameters Generic parameter Description Frequency - Continuous - Discrete Relation to core product - Core - Peripheral Customer contact - High - Low Tangibility of service act - Tangible - Intangible Complexity - Simple - Complex People/equipment dependency - People intensive - Equipment intensive Adaptability - Customized - Standardized Place of service encounter - Service provider - Customer A service process may take place several times giving multiple moments of truth, or it may be a rare event. This may influence development both towards customers and suppliers. To what extent the service is part of the core product or service. This may influence the perceived importance of the delivered service. Extent of customer contact required in service delivery. Influences how involved customers are in the service process and the service quality delivered. This indicates how well the service is understood and quality is evaluated by the customer. In cases where end-user and customer is not the same the service may be perceived differently by the parties. The complexity of the service process in terms of skills requirements and specialized equipment. Simple does not equal standardized and complex does not equal non-standardized. Services can either be high-touch or high-tech services. High-touch services are dependent on people in the service process, whereas high-tech services are more dependent physical resources, such as automated systems, in the service process. However person-based services often involve some kind of physical resource in the service process, and technology based services at some point involve people, e.g. if the service process fails. To which extent the service is adapted to individual needs. This customization can both be applied by service provider and customer/end user. The person dimension of services leaves room for more customization than with physical products. The number of user groups also influence requirements for adaption of service processes. Whether the service process and service consumption takes place at the service provider or at the customer. This also includes distinguishing between single and multi site delivery. Another influencing factor is the number of different customer/user groups, as a distinction can be made between end 5

7 Service target - People - Things users and people involved in the service delivery process. Services can be directed at things such as property, systems or at people such as healthcare or education. The perception of the service is also influenced by the tangibility of the service act. Source: based on Axelsson and Wynstra (2002), Grönroos (2000), Normann (2002) and Lovelock (1983). FM services also have different characteristics based on the above listed service classification parameters, which influence the way the FM function can manage the service and the processes involved in delivering the service Service supply chain The concept of a service supply chain covers businesses such as supply of spare parts, third party providers, finance, insurance, retail, and governmental services (Ellram et al., 2004). A limited number of contributions have been found dealing with service SCM, and a general trend is that they are calling on more research to be done in the area (Sengupta et al., 2006). This must also be seen in the light of the growth of the service sector over the last fifty years and the acknowledgement of its importance (Chesbrough and Spohrer, 2006). The literature seems to be focused on health service (Fernie and Rees, 1995), purchasing practices in municipalities (de Boer and Telgen, 1998), extensions of the concept of factorybased services to global supply chains (Youngdahl and Loomba, 2000), customer-supplier duality in service businesses (Sampson, 2000), service SCM frameworks (Ellram et al., 2004 and Johnson and Mena, 2008), comparisons of the performance of manufacturing and service supply chains (Sengupta et al., 2006), service SCM and e-government operations (Michaelides and Kehoe, 2006). Service supply chain has been defined in a way that differentiates it from a traditional SCM manufacturing centric focus. An important message in SCM is that a differentiation of tasks should take place. Such a differentiation can, for example, be practiced through different types of s with customers as well as suppliers (e.g. based on segmentation). Traditional tasks seen as service SCM tasks are distribution, repacking, labelling, inventory handling, transportation and track&trace systems. The service SCM framework, suggested by Ellram et al. (2004), is defined as Supply chain is the of information, processes, capacity, service performance and funds from the earliest supplier to the ultimate customer. The term service performance is chosen rather than just services or service delivery. Ellram et al. (2004) defines seven service processes: Information flow (e.g. demand estimation and information sharing) Capacity and skills (e.g. investments in organizational processes, assets and staff) Customer (CRM) (e.g. customer segmentation and ) Supplier (SRM) (e.g. supplier identification, supplier selection, supplier segmentation and ) Service delivery (e.g. making promises to customers, enabling service providers) Cash flow (e.g. flow of payments between parties) Demand (e.g. forecasting customer requirements) SCM is also relevant for Facilities Management (FM), which for a large part is delivering services to users of buildings. Services differ from physical products in several ways, as described in section 2.2. Pure services are intangible, labour intensive, difficult to resell, 6

8 difficult to automate, heterogeneous, not able to be stored and transported due to production and consumption at the same time, has a risk of perishability (unused capacity is capacity lost forever) and have a quality dimension that is difficult to evaluate (Nie and Kellogg, 1999; Akkermans and Vos, 2003). 3. METHODOLOGY The paper is based on a literature review and empirically collected data. The literature review is focused on Service, FM and Service Supply Chain Management. The literature review has been completed based on different sources, through specific searches in the scientific library database EBSCO Host Research Database (business search premier). Searches took place in the field all text (TX) with search terms service, FM and SCM. However, only a limited number of papers are actually dealing with the combined issue of service, FM and SCM. Also the theoretical part is based on the findings in an ongoing Danish research project on FM (Damgaard and Erichsen, 2009). The empirical part is two illustrative case examples of FM and FM services from different FM organisations. The two cases were qualified through a Danish research project on FM, as representing two different examples of how the FM tasks handled by an FM organization and the organization around the FM operations and services. The sample criteria for the two case studies have been to distinguish between public- and private companies, and the content and complexity of the FM tasks. The empirical data was obtained via semi structured interviews with key people in the FM organisations. In case A, a public building administration, the respondent was a district manager being responsible for the operational services in a large number of buildings, more than 300 leases, and at the same time responsible for the FM services in the building of the public administration. In this case the FM function has two different tasks, one of doing FM services in the building of the administration and one of handling outsourced FM services through a single partnership handling 100 leases. Case B, is a union office, the respondent was the operations manager (FM). The case describes FM services at the head office of a union. In this case the FM services are all delivered inside this one building. However, as the case describes FM services in this case involves more than heat and water supply. The two cases should not be viewed as elements in theory testing. They serve the function of illustrative case studies to show examples of the FM services and to help identify the similarities and differences between FM and S-SCM. Furthermore, through interviews with key-staff and a workshop on FM and FM services, they allow the researchers to let the involved persons reflect upon on what constitutes FM, services in FM and perspectives on service supply chain and FM. The limitations in this research can be found in the limited knowledge of SCM in the cases and therefore the risk of over interpretation of the data gathered through the case interviews. 4. ANALYSIS AND DISCUSSION An overall view of the FM tasks and services indicate that they range from pure service tasks to more complex tasks. These more complex tasks also have interfaces with other internal organization departments as well as external service providers, implying that the FM function in this broad perspective spans professional skills and functions (Tai and Ooi, 2001). Common for FM services is that they are delivered on site and consumed by the customer or user in the facility. Here a distinction can be made as to whether end customers are met in the facility, which is typical to service businesses, or outside the facility which is 7

9 typical to production companies (McLennan, 2004). The scope of FM services in this paper will be limited to space, operation and services as these are seen as the core service processes of FM. We therefore delimit the areas of investment and financial. Investment is seen mainly to focus on property strategy and new building and financial is not seen as a core FM activity, although the other areas will naturally include the of cash flows and benchmarking of costs. Space This FM area can be classified by service tasks such as analysis of space requirements, adaptation and allocation of space (Jensen, 2008). This area is closely connected with property strategy and strategic planning such as investment in new buildings or refurbishment projects. But the of space is about the most effective use of space and only includes minor adaptations of existing buildings. The services in space play an important supportive role to the core business as they provide the workspace, where core business processes take place. The activities can be classified as discrete with an increasing complexity as working environments are becoming more individualized and technology driven, which also leaves room for increased customization of FM services both within workplace design and supply in different workplace environments (Vos and van der Voordt, 2001). Yet customer contact in this service category is relatively low, as long as FM is not well positioned in the organization. The services or tasks in space can be seen as tangible and directed at the users. These characteristics give the FM function requirements such as (Ellram et al, 2004; Jensen, 2008): Interaction and understanding of customer needs as well as client wishes Knowledge and access to information for planning, allocation and utilization of space Relationship building with key stakeholders to identify needs and propose efficiency improvements Operational services The operational services are characterized by both continuous service processes such as supply of electricity, heating and water, as well as discrete service processes such as maintenance, general operation and environment control (Jensen, 2008). However, development towards intelligent building installations has made this service process more complex. The service process both includes monitoring the automatic control systems (CTSsystems) as well as service and maintenance of e.g. HVAC (Heating, Ventilation and Air Conditioning) systems. Maintenance services are more discrete service processes that are very people dependent and with low customization towards end users, but instead the service is directed at the FM function and facility owners. Finally environmental services are a very complex, but discrete process securing and developing the environmental profile of the facility. A key stakeholder here is the facility owner. Some of the requirements and challenges for the FM function regarding operational services (Ellram et al, 2004; Jensen, 2008): Setting service level standards and monitoring the service performance Skills requirements among FM staff and sourcing of FM service competences Balancing costs vs. value of support service Service The service area of FM is probable where the greatest focus is on outsourcing of FM service processes. These services are seen as the processes supporting the core business processes, e.g. IT, catering, reception and cleaning (Jensen, 2008). IT is probably the most complex area, 8

10 and may often be handled by a separate organizational unit. An area such as cleaning is characterized by low complexity as well as low customer contact with customers. It is also tangible and directed at things and is most often seen as a peripheral service that is not very visible to the users of a building. The same can be said about supplies. Some of the FM requirements within the service area are (Ellram et al, 2004; Jensen, 2008): Sourcing of services Service level standards and performance measurement Balancing costs vs. value of support services 4.1. Comparison of S-SCM and FM From the description of FM and S-SCM there seems to be areas where FM could gain advantages from S-SCM. Both areas are dealing with a non physical product, a service. And both areas are focused on customer demand, service levels and performance measures. However, FM are in many cases delivering services as a support function, and is considered a necessary function but not as a function supporting the strategic development of an organisation (company). The following Table 4.1 compares the three selected service areas of FM; Space, Operational services and Service, with the seven business processes of S-SCM, with the purpose of identifying how FM handles the S-SCM processes (Ellram et al., 2004). As table (Table 4.1) shows it is possible to find elements of S-SCM processes in FM, for example the use of performance metrics and service level standards. Also the capacity and skills is found to be part of both the FM area of operational service and S-SCM. Table 4.1 Comparing S-SCM and the three selected FM service areas Service SCM process Information flow Capacity and skills Customer (CRM) Supplier (SRM) Content demand estimation and information sharing investments in organizational processes, assets and staff customer segmentation and supplier identification, supplier selection, supplier segmentation and making promises to customers, enabling service providers 9 FM service area Space Operational services Service Knowledge and Setting service level access to information standards and for planning, monitoring the service allocation and performance utilization of space Building competences in space. Relationship building with key stakeholders to identify needs and propose efficiency improvements Relationship building with key stakeholders to identify needs and propose efficiency improvements Skills requirements among FM staff and sourcing of FM service Improve resource efficiency (e.g. Energy) Setting service level standards and monitoring the service performance Service level standards and performance measurement Education and training of service personnel. Optimizing work processes. Investigate customer needs, and wants. Set up routines for service evaluation. Sourcing of services Service level standards and performance measurement Service delivery Interaction and understanding of customer needs as Setting service level standards and monitoring the service Service level standards and performance well as client wishes performance measurement Cash flow flow of payments Rental fees Usage cost, e.g. Balancing costs vs.

11 Demand between parties forecasting customer requirements Interaction and understanding of customer needs as well as client wishes energy consumption (Electricity, water, gas) Overview and monitoring of building utilization value of support services Secure the right capacity to deliver the requested service As table 4.1 show there are differences in the application of the S-SCM processes in the different FM areas. The process of demand, forecasting the requirements of the customer could be an area of opportunity as the tasks in the areas of Operational services and Services also have capacity constraints and therefore need to plan the demand. The focus on the customer is also found to be different, in S-SCM there is a focus on the ultimate customer (Ellram et al., 2004), where FM seems to be more focused on the facility owner than the actual end customer/consumer (McLennan, 2004). Another area where similarities can be found is the trends in FM towards outsourcing of services, and the focus on using technology to drive improvements. Using performance metrics are also found in both S-SCM and FM, outlining the service levels and setting up service level agreements seems to be a common process Illustrative cases In this section, the data from the case interviews are analyzed and discussed against the topic of the paper, using S-SCM processes in FM. Case A illustrates two different situations of FM. In this case the FM function is servicing a large number of public buildings. In this case the FM function has two different tasks, one of doing FM services in the building of the administration and one of handling outsourced FM services through a partnership. The outsourced FM tasks are handling all operation services connected with 100 leases across different buildings. The coordination and planning of the service is done through monthly meetings with the outsourcing partner. However, not until recently the customers, the users of the buildings have not been involved in the coordination. To gain insights in the wishes of the users (ultimate customers), the building owner and the outsourcing partner have held the first dialogue meeting with the users. The result was very positive and future meetings are planned. The other part of the tasks in case A is the FM services in the building of the administration. Here an FM function of 5 people is servicing 800 employees with the operational services, heating, water, light, ventilation and cleaning. The FM function has been in operation for around a year and is considered a success. The reason for this is the drive of the manager of the FM function, who has done every ting possible to service the customers in the building it is characterized as over servicing which have given the success. Case B describes FM services at the head office of a union. In this case the FM services are all delivered inside this one building. In this case the tasks of the Operations function (FM function) is covering more than just securing heat and water suppliers. In this case the operations function also handles mail, cleaning, canteen, sourcing of office supplies, participates in projects, for example as resources to participate at an exhibition in parallel with people from other departments in the union. The tasks of the Operations service function have changed over the years from being mostly operations services (heat and water) to being mostly project based, being external projects for the union or internal projects, for example restructuring an office area. There are around 500 employees working in the building every day. 10

12 In Table 2.4 the two areas of S-SCM and FM was compared from a theoretical point of view. The two cases should serve as examples of the FM services and to help identify the similarities and differences between FM and S-SCM. Table 4.1 shows a summary of the two cases and the seven S-SCM processes. Table 4.1 A summary of the two cases compared with the seven S-SCM processes. S-SCM Process Information flow Capacity and skills Customer (CRM) Supplier (SRM) Service delivery Cash flow Demand Content Case A Case B demand estimation and information sharing investments in organizational processes, assets and staff customer segmentation and supplier identification, supplier selection, supplier segmentation and making promises to customers, enabling service providers flow of payments between parties forecasting customer requirements Together with the outsourcing partner demand for operational services are estimated Building a new function around FM. Investing time and resource in handling outsourced partner setup First step towards CRM, imitating dialogue meetings with the uses (customers) of the buildings. A monthly review process is established to develop the to the outsourcing partner. For the outsourced FM services, planning is made and communicated to users. For the internal FM function, a set-up is made where the manager of the FM function is giving every customer (user) a feedback about expected solution and time. The internal FM function is considered a cost centre. The outsourced FM tasks are handled in a partnership with agreed payment conditions. This is not yet implemented and is considered a very complex task. The manager of the operations function (FM function) is part of the team of the union. Developing capacity and skills is part of the overall developments of the Union, not a separate area. The customers are the users of the building. The users (customer) of the building are in a structured way involved in the processes of defining the needs and solutions. Suppliers are segmented and handled accordingly. Some suppliers are handled as arm s length s others are partnership like s. For some services standard delivery times are defined and communicated. In other cases delivery times are given at order. The operations services (FM) are considered as a cost centre, regarding the basic services like cleaning, heating etc. However, the user ordering office supplies will be invoiced for the particular department. Demand is coordinated with the overall planning of the union, for example the planning of events where operations need to support. In contrast to the theoretical comparison of S-SCM and FM (Table 4.1), the cases show that all S-SCM processes can be applied in FM. Both cases are working with CRM and SRM activities. Case A are in the beginning phases of CRM where Case B, have a more structured approach to handling the relations to the customers (users) of the building. The capacity and skills is also present at both cases, where case A have established a new function to handle the FM services internally and appointed a manager to the function, case B have positioned the FM function as the function handling all the operational service functions in the building. In case B an organisational development program has focused on getting the 11

13 janitor out of the basement the purpose was to motivate the FM service employees to get involved with the users of the building, the customers of the FM services. Also in case B, they changed the time for cleaning from doing it in the night invisible cleaning to doing it in the day time visible cleaning this change resulted in an improved dialogue with the users of the building, the customers of the FM services. Another important S-SCM process is Service delivery, where the service provider is promising a service and delivery to the customer, this is a classical SCM process in delivering to the customer. The two cases both show activities in this area, again case A are beginning to use the processes where case B have experience in using the process. 5. CONCLUSION and IMPLICATIONS The purpose of this paper was to view FM in a service supply chain perspective (S-SCM) by making a theoretical comparison of the two areas and through two illustrative case examples. We propose that the adoption of a Service Supply Chain perspective in FM could lead to a new role for FM and new perspectives for developing the facilities and the businesses using the facilities. The literature review revealed only a few contributions dealing with service supply chain and the combinations of FM and SCM as well as FM and S-SCM. However, it was found that FM definitions are actually containing elements of S-SCM. Also the comparison of FM and S-SCM (Table 2.4) showed that there are similarities between the two areas. Through the literature review and the two illustrative case examples it is illustrated that adoption of a Service Supply Chain perspective in FM could lead to a new role for FM and new perspectives for developing the facilities and the businesses using the facilities. Also the opportunities for utilising the S-SCM business processes in FM implies the need for new competences, the FM employee should be a service worker rather than the groundskeeper. Using S-SCM processes could help defining core business processes in FM, and the relations to core business functions internally and externally FM can gain a more customer oriented focus through service supply chain by putting the customer in centre of the delivery of services. This includes implementing a CRM approach, and like vice in the sourcing area, the SRM processes contains possibilities for developing the FM area both internally and externally when sourcing services. Demand planning could be seen as one of the areas where a potential for improvement can be found. Forecasting and doing capacity planning based on insights from the customers, would give FM advantages in handling the capacity. As this research can be seen as conceptual with the aim of analytical generalizations, there is a need for more theory building in this area with the purpose of testing the implications proposed. Areas for future research are the similarities between FM and S-SCM and how FM can contribute to utilize the capacity of a facility in this case. The findings of this paper indicate that the FM area could benefit from adopting S-SCM practises. REFERENCES Akkermans, H. and Vos, B. (2003), Amplification in service supply chains: an exploratory case study from the telecom industry, Production and Operations Management, Vol. 12, No. 2, pp Alexander, K. (1992), Facilities Value Management, Facilities, Vol. 10 No 3, pp

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