How do we manage inflation in the FM and mobile engineer sector?

Costs are going up in the mobile engineer sector… period.

Pretty obvious, but not so obvious is the solution.  In fact, with inflation well over 10%, and availability of labour at an all time low, the facilities management sector is experiencing a rising cost base in both materials and labour.

The reality is, it’s harder than ever to try and control rising material costs, and they aren’t going to go back down as quick as they went up.  And the labour shortage isn’t going away any time soon, even with the new announcements by HM Government to try and resolve the issue.

So let’s take a step back.

Typically, 60-80% of service delivery is in labour cost, and 20-40% is in material cost.

It’s very easy to get heavily focused on the price of materials, with not so much focus on how to limit the cost of labour.  This is simply because in the current environment, labour costs are somewhat dictated by the market (if you want any mobile engineers).

However, not so often looked at is engineer productivity, at a very basic level.  Sure, most companies would have some IT system and measure engineer productivity and possibly make some tweaks around the edges on how productivity could be improved.

But again, let’s take a step back.

What could happen to service delivery cost if engineer productivity was boosted by 30%?

Let’s say that a typical contract is 70% labour cost.  If we reduce this cost by 30%, then overall service delivery cost comes down by 21%.

Let’s say that a typical contract is 30% material cost.  If we managed to reduce this by 10% (and in the current environment this is well-nigh impossible), then overall service delivery cost comes down by 3%.

It’s a big difference.

But how do you boost engineer productivity by 30%?

LEAN thinking can be applied to any industry.  When Toyota first coined the concept back in the 90s, they applied it to car manufacturing but the principle remains exactly the same.

Mobile engineers should not do anything that is not creating value.

Let’s put it another way.

Mobile engineers should not do anything that your clients don’t pay you for.

Mobile engineers should not do anything that your clients don’t pay you for!

Take a look at some examples of wasted time, fuel and resources below:

• How many mobile engineers still spend over 250 hours of time every year collecting materials from a wholesaler, plus additional time travelling to and from that wholesaler.
• How much time is spent on failed visits due to wrong materials, damaged materials or missing materials?
• Do mobile engineers get paid for removing waste, and how do they actually do this in a compliant way?
• How much time is spent by planning teams trying to find out when goods will be available on site, or even worse, to collect?

These are only some common wastes in the FM sector, but you can start to see the picture.

The reality is that suppliers of materials to the FM sector are conditioned to lowering the cost of the product, to the detriment of engineer productivity.

With over 15 years of experience in delivering to mobile engineers, RLT Onsite has developed the simplyonsite distribution system, specifically for the mobile engineer sector.  We use this system to distribute lighting, electrical and compliance materials to mobile engineers, as well as contract stocking specific parts for unique contracts.

No one contract is the same, but with a package of solutions to ensure engineers remain as productive as possible, planning teams have information they need at their fingertips, and management have 100% control of costs, specification and reports, RLT Onsite has brought service delivery cost reductions of significant value to some of the largest UK contracts including supermarkets, high street chains, public sector bodies and commercial sites.

The answer to inflation and cost control, especially in this environment lies in streamlined materials delivery that puts engineers back where they are best…

…on site.

Contact one of our consultants today to understand how we could dramatically reduce service delivery costs for you.