TOP 5 facility maintenance challenges

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1 TOP 5 facility maintenance challenges and a Formula for Success in Challenging Times

2

3 2010

4 #5 Vendor Management #4 Operational Visibility A major trend from previous surveys was the issue of outsourcing companies trying to figure out their strategy for the amount of work they self-perform versus the amount they manage through vendors. While this topic has not gone away, it is not the driver behind operational change. According to the Director of Facilities at one restaurant chain, Outsourcing work is a given we know we re always going to do it to some degree. It s dealing with the changing amount of work and the churn in our pool of vendors that s the challenge. The ability to evaluate vendor performance was an issue that was repeatedly raised as a major management challenge. Multiple survey respondents indicated that their most pressing need was tracking vendor performance and enforcing pricing agreements. Too often we just go with who we know, said one respondent. To make better decisions, we need to get feedback from the stores where the work is being done, and also from accounting where invoices are processed. The logistics of vendor management were also raised as an issue of concern, particularly with respect to the tracking of Certificates of Insurance and W-9 information. This issue was most challenging for those responsible for multi-site facilities across broad geographies. Having up-to-date, searchable data on your vendors that allows you to demonstrate regulatory compliance and that limits your liability can save a great deal of time and money. As one respondent commented, when it comes to proving compliance or dealing with litigation, the one with the most and the best documentation wins. Approximately 30% of survey respondents considered the capturing of reliable data as one of the top two pressing needs in their organization. This proved to be the case for both larger and smaller companies, although for somewhat different reasons. We spend millions on facility management a year. I know there s waste I just can t say for sure exactly where it all is. Facility managers and directors of the larger firms expressed the need to capture relevant historical data across all facilities and vendor types in order to make strategic decisions and to report out accurately on maintenance and repair spending. According to an individual at one national chain We spend millions on facility management a year. I know there s waste I just can t say for sure exactly where it all is. Medium sized and smaller firms, while caring about the strategic value of accurate archived data, were typically more interested in the operational value of real time data. We spend too much time reacting to repair situations that have already gone wrong, said one individual from a retail company. The brass ring for me would be being able to see the status of break/fix work as its happening see which contractors are responding fast to work requests, who is waiting on parts to finish a job, etc. Formula for Success - Vendor Management Improved vendor management increases the control you have over your operations, and by implementing price controls, can reduce your costs. Making vendor decisions based on accumulated performance feedback Recording and comparing information on vendor pricing Maintaining searchable records of vendor certifications Formula for Success Operational Visibility Capturing and then making use of the information associated with all your service and maintenance work equips you to make informed and effective business decisions. Comparing spending trends across their organization to target areas of waste Using historical repair data to inform new equipment and warranty purchase decisions Monitoring real time progress on important repair work

5 #3 Work Load #2 Asset Management Not a single company surveyed indicated that an increase in work load was the least of their concerns for nearly everyone, it was in the top three. Given these belt-tightening times, this comes as no surprise. One factor contributing to the increased burden on facility management teams is the reduction in their company s field technician staffing. This may seem counter-intuitive, but as budget cuts move more work to vendors, the burden of vendor recruitment, selection and management falls to the facility management organization. According to one property manager, My biggest worry is finding dependable vendors at reasonable prices. This sentiment was echoed in various ways by others. Many of our smaller contractors aren t around anymore. It s a lot of work finding new ones, and then the work is just beginning because you have a new relationship to manage, pricing agreements to set up, and a lot of paperwork to get straight, said a restaurant facility manager. My biggest worry is finding dependable vendors at reasonable prices. It s not just operational budgets that are being squeezed capital expenditures are down substantially, and that translates into keeping existing equipment and assets up and running longer. For nearly 60% of survey participants, this was the number one or number two concern for their organization. To address this challenge, many companies are continuing the trend toward more predictive and proactive maintenance programs, but the challenge is to decide how far down that road to go. By way of analogy, consider health care. One could submit to a daily series of full diagnostic lab and physical tests, and this would undoubtedly help identify potential health risks as soon as they occur - but at an untenable cost. The trick is to find the sweet spot of how much testing and tweaking you need to do, said one facility manager from the grocery industry. For example, do you need to pay to have your HVAC drive belts checked once a month to avoid a potential expensive repair? Once a quarter? Once a year? In addition to on-boarding new vendors, the task of ongoing communications with existing ones was identified as a big part of the dayto-day work load placed on the shoulders of facility managers. We work with literally hundreds of service providers, said a facility services director for a government organization, and on any given day, my team is not only dispatching them, but also tracking their work progress, making sure invoices for completed work match up with work orders it adds up to a lot of phone calls, s, and faxes. The way to answer these types of questions and make sure you are spending the right amount of time and money on proactive versus reactive work is to have accurate historic information on your equipment and asset maintenance. Comparing real repair histories by equipment and asset type, by geography, and by manufacturer allows you to make informed decisions. You ll have the data to support additional investment in preventative maintenance where and when it makes sense. Formula for Success Work Load Doing more with fewer resources is not a temporary situation in a competitive market, you ll always have pressure to keep operational costs as low as possible. To succeed in this environment, you need tools that extend your reach and productivity. Moving away from ad hoc communications by phone, fax and Sharing a common platform with their clients and vendors to process work requests electronically Automating vendor job routing via intelligent systems Formula for Success Asset Management Spending the right amount on preventative maintenance and being able to back up that decision with accurate data can turn a facility manager in to a cost saving hero. Comparing preventative vs. repair costs on all asset types and adjusting PM spending accordingly Using accumulated repair data to implement intelligent, predictive maintenance schedules Applying proactive maintenance on mission critical equipment

6 #1 Cost Savings Half of those surveyed indicated that priority #1 for this year was, without a doubt, saving money. When asked how they would like to accomplish this objective, the responses of facility managers tended to be grouped into one of three general categories: Call avoidance I m not sure how many unnecessary service calls we ve paid for this year, said one facility manager, but the number is greater than zero and that s too many. The logical first place to look for repair call savings is in avoiding them altogether or at least as much as possible. One way companies are doing this is through the implementation of self-help systems. Clients at remote facilities can access basic troubleshooting information before sending out a work request, and managers at central operations can intercept work requests that most likely can be dealt with internally. Our managers were always calling in with the compliant the ice machine is broken, said one facility manager for a large franchisee operation. It became just about a weekly I m not sure how many unnecessary service calls routine I would say hold the phone near the machine we ve paid for this year, but and when I didn t the number is greater than hear the compressor which I just zero and that s too many. about never did I told them politely OK now I need you to go behind the machine and plug it in While this doesn t represent an automated self-help system, that is the idea behind them, and it s a good idea! Warranty work management This category represents low-hanging fruit for the facility manager looking to save money do not pay for work that is under warranty. As simple as this sounds, tracking the warranty coverage on the large number of complex assets and equipment is a complex task. But the cost of a management system can often be returned to you several fold just by knowing what is covered by warranty and not paying for repairs when you don t have to. Price control While planned maintenance work, by definition, can be budgeted with some degree of accuracy, and prices can be prearranged for regularly scheduled services such as janitorial and landscaping, it is also possible and highly recommended that facility managers set pricing guidelines with their reactive repair vendors. Just because repair work is unpredictable and unscheduled does not mean that you don t have control over it. Establishing prearranged pricing with your all your vendors, including not-toexceed limits that require your authority to over-ride, gives you a level of control over the unpredictable nature of facility management. Formula for Success Cost Savings Facility Management may be considered a cost center, but it is also holds tremendous potential to impact a company s profitability. A dollar saved by a facility management team goes directly to the bottom line. Which is why cost savings is the bottom line concern for facility management professionals. Avoiding unnecessary repair costs through client self-help systems and knowledgebases Flagging all assets and equipment under warranty to prevent unnecessary payment Establishing and monitoring not-to-exceed pricing agreements with vendors

7 2011

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