Reducing costs in retail FM

To deliver successfully to the retail sector, understand it!

In a nutshell, pretty much every retailer is facing increased competition, both online and offline. To compete with online, they need to be reducing costs. To compete with other bricks and mortar stores, they need to be the “best-looking” in their location.

The challenge for the FM provider is, do more, for less. Is this possible?

Absolutely. Funnily enough, the principles of LEAN, often applied to manufacturing, are just as appropriate in the FM sector. The focus of this is to reduce waste whilst improving the end result, best remembered by the acronym, TIMWOODS. Take a look at the questions below:
T = Transport – Do your engineers travel more than they have to?
I = Inventory – Do you waste materials through loss or damage or hold too much van stock?
M = Motion – Do you overuse your vehicles, people or equipment?
W = Waiting – Do your engineers spend time waiting for materials or jobs?
O = Over-processing – Do you do more than necessary to meet contract criteria?
O = Over-production – Do you purchase wrong parts or parts that are unnecessary?
D = Defects – Do engineers visit site without being able to complete the job in hand?
S = Skills – Are engineers with the wrong skill sets being deployed on the wrong jobs?

In the FM sector these wastes are common. Strangely, they aren’t too difficult to fix.

I know that sounds like a strong statement but it really is true. The secret is in working with your vendors as a team. Once you work together, leveraging their expertise and data, you can deliver a much more streamlined service, for less.

Let’s explore these wastes more closely:

Transport
It’s common knowledge that reactive maintenance for large portfolios is counter-productive. You end up with engineers travelling all over a region on a specific day, sometimes paying overtime or night pay, increasing mileage on vehicles and fuel usage and wasting time travelling. Reactive won’t be eliminated yet, but how can we maximise proactive maintenance and limit travelling through planned works?

Inventory
Some engineers carry no stock, others carry a warehouse-full. How can you find the ‘happy medium’? The critical thing is to carry as little as possible without detriment to your service offering. It’s not necessarily a good thing to carry nothing but can you be smart with what you carry, maybe even different from engineer to engineer, or region to region?

Motion
Closely linked with transport when discussing the FM sector, vehicle maintenance is a common waste. If one provider is smart with planning maintenance and engineers and another isn’t, there could be a difference of 15-20,000 miles per year, per van. Multiply the maintenance and servicing bills out by the number of vans. Less obvious is how your engineers maintain a large store. Some engineers will walk half as much on a visit than others just by being smarter on how they complete the job.

Waiting
Probably the most common waste, the biggest waste, and the easiest one to fix. Do your engineers go to site before goods are delivered (if you have them delivered direct-to-site)? Even worse, do your engineers collect materials and if so, how long do they wait at your vendor? This is common with reactive jobs. How can make sure the right materials are delivered to the right place, at the right time?

Over-processing
Some contracts might specify the number of store visits, jobs done or FTF (first time fix) rate. More common is probably results-based contracts such as a certain percentage of luminaires lit on the shop floor. If you hold a fully comprehensive contract, can you use reduced proactive visits to reduce reactive visits and do more per visit?

Over-production
It’s typical for the wrong parts to be ordered simply due to communication errors. Worse still, do you ever order the wrong quantity? Focus on how to ensure the right quantity of the right product are ordered first time.

Defects
In the FM sector, a product ‘defect’ could be classed as a visit that is not 100% successful in the goal of that visit. It may not yet be possible to achieve total success but how can you ensure that the engineer that goes can do the job required without having to leave site and waste more time, money and products.

Skills
Engineer teams are often split into skill sets doing different disciplines. Obviously, every FM provider will want to ensure that the right skill set is deployed to the right job but does this always happen? How can you be smarter in your planning to ensure the engineer with the greatest chance of completing the job successfully is deployed?

The following typical solutions might well be practises you already use but we find they are typical ways of reducing waste and streamlining service delivery.

a. Group jobs according to area. It seems so simple and no doubt you intend to do it, but how often does it happen? (Reduce Transport and Motion waste)

b. Deliver goods direct to site. You may be worried about goods being lost but working with your vendors, you can eliminate this issue (see below). (Reduce Transport, Inventory, Motion, Waiting and Defects waste).

c. Install SMART van stock. A proactive vendor should be able to work with you to recommend the best van stock to install on your engineers vans, even down to region or engineer, depending on the sites they maintain. The trick is to reduce this as much as possible so that the maximum materials are provided by direct-to-site delivery whilst there is sufficient stock to do the common items on the portfolio. (Reduce Inventory, Over-production and Defects waste)

d. Use technology appropriately. Most FM providers have highly complex IT systems. However, either by sharing this with vendors or utilising smart technology from vendors, you can improve communication, respond quicker, eliminate wrong parts being ordered and so on. In fact, the sharing of knowledge through technology can reduce waste in almost every area for both the vendor and FM provider whilst improving service delivery. (Reduce Transport, Inventory, Motion, Waiting, Over-production, Defects and Skills waste).

e. Allow direct communication between engineers and vendors. Often this is seen to be loss of control by management but by using technology and reporting effectively, it doesn’t have to be. In fact, it can sometimes improve control. Use of specific apps or requisition lists that go direct to the vendor can ensure wrong parts aren’t ordered and that they are delivered on time and in full undamaged. (Reduce Transport, Motion, Waiting and Over-production waste).

f. Report effectively to clients. If you work with proactive vendors, it shouldn’t be difficult to come up with a reporting system for both you as the FM provider and the client to keep them in the loop on how well their stores are maintained and why. A client that knows is a client that is happy. (Reduce Over-processing, Defects and Skills waste)

g. Train engineers on the best method of doing a visit. You’ll have good engineers and engineers who might need more training. Sharing the best ideas amongst engineers is often done in toolbox talks but how often is it implemented? Typically, the great engineers will have a structure to maintenance of stores which can reduce time waste tremendously. (Reduce Motion and Over-processing waste)

h. Ask for delivery notifications. It shouldn’t be difficult for your vendor to provide delivery notifications by text or email so that the engineer can be certain the goods have arrived, where they are and who they have been signed for by. (Reduce Transport, Motion, Waiting and Defects waste)

i. Label parcels. FM providers are worried about direct-to-site deliveries because of goods going missing. There are a few simple solutions to this but one is to simply label the parcel with the retailers and FM providers logo. The retailer then knows immediately it is for them. (Reduce Inventory, Waiting and Defects waste)

j. Deliver just-in-time. Another way of reducing goods going missing on site. By sharing knowledge with your vendors, they can delivery 24-48hrs before the job is due to be done limiting the amount of time it is on site. (Reduce Inventory and Waiting waste)

k. Reduce collections of materials. It’s simply a waste of time, energy, fuel and vehicles to spend time collecting materials. (Reduce Transport, Motion, Waiting and Over-production waste).
l. Can you change contracts to results-based? This is sometimes difficult but see if there are ways to limit the amount of visits required to site by being more proactive and doing more per visit. Agreeing to have a certain amount of the store left lit is an easy way of making sure the client is satisfied whilst you have more scope to limit store visits. (Reduce Transport, Motion, Over-processing and Skills waste)

m. Reduce proactive visits if possible. As above, if you have the scope to, look at ways of doing more on each proactive visit by being smarter with van stock and materials delivered direct-to-site. (Reduce Transport, Motion, Over-processing and Skills waste)

n. Work with vendors to plan visits effectively. Sharing planned visits with your vendors ahead of time can ensure that you have more control over which engineers go to which sites. This increases the chances of getting your job done. (Reduce Defects and Skills waste)

Vendors have a huge part to play in reducing waste, and therefore costs, to the FM sector. Interestingly, this works best when there is mutual trust in the relationship. Trusting each other to deliver reduces time for both companies as they both seek to work for the benefit for the end client. In any case, why buy from an organisation you don’t trust?

If you operate in the retail FM sector, reducing your costs now will put you ahead of the pack.

Working with your vendors, it’s not always too difficult.