Many national retailers started small and grew their store’s footprint over time. However, as portfolios grow and locations age, the need for managed maintenance becomes exponential. Over time, this growth and aging exceeds a retailer’s ability to keep up, so they add a head count and consolidate vendors. In this situation, we see that the growth pace outruns the ability to hire, which creates new problems.
As these problems arise, facilities’ teams transform into reactive fire stomping crews while sacrificing strategy, data analysis and service quality. Thus, maintenance expenses go up, oversight deteriorates and store appearance along with functionality suffers.
Fortunately, facility maintenance solutions and technology has emerged to offer a comprehensive and integrated process that protects retail clients from uncontrolled maintenance spending while maximizing the clients’ internal resources. In the last few years, we have seen the trend of retailers adopting these technology solutions.
Here are some reasons for this trend.
Economies of scale
Third-party facility management companies leverage a network of service technicians or providers across not only one client, but also all nationwide clients. This creates opportunities to buy down labor or material costs, as well as travel and other charges. The primary benefit of economies of scale in facilities maintenance is cost savings and improved operational efficiency. Here are some key benefits:
Cost reduction: As you manage a larger portfolio of properties or facilities, you can spread your fixed costs (like overhead, technology, and administrative expenses) over a greater number of units. This results in lower costs per unit, saving money in the long run.
Bulk purchasing: With a larger portfolio, you have more purchasing power. This allows you to negotiate better deals with suppliers for materials, equipment, and services. Bulk purchasing often leads to significant cost savings.
Resource optimization: Managing multiple facilities allows you to use resources more efficiently. You can allocate labor, equipment, and materials based on the specific needs of each facility. This avoids underutilization and waste, leading to savings.
Standardization: Standardizing maintenance procedures, equipment, and technologies across multiple facilities streamlines operations. It reduces training costs, improves consistency, and enhances overall quality.
Negotiating leverage: Vendors and service providers are often willing to offer more competitive rates to clients with larger portfolios. This provides an opportunity to negotiate favorable service contracts.
Access to specialized expertise: Larger facilities maintenance providers often have in-house experts or access to specialized resources that smaller operators may not. This can lead to better service quality and cost-efficient solutions.
Technology investment: Investing in advanced maintenance management software and technologies is more feasible at a larger scale. These technologies enhance operational efficiency, reduce downtime, and lower costs.
Risk mitigation: Facilities maintenance for a large portfolio allows for better risk diversification. If one facility experiences a problem, resources and expertise from other facilities can help address the issue swiftly.
Improved reporting and analytics: Managing a larger portfolio often involves sophisticated reporting and analytics tools. These tools provide insights into maintenance performance, helping to identify areas for further cost savings and efficiency improvements.
Facility management companies have invested heavily in work order platform technology that provides great insight into a client’s facility maintenance operation, which allows the client to have the right-size maintenance and allocate capital budgets in a more informed manner. Managed maintenance services can significantly improve visibility in a retail location by providing a structured and organized approach to facility and equipment management. Here's how managed maintenance achieves this:
Centralized data and reporting: Managed maintenance platforms often centralize data related to all maintenance activities across multiple retail locations. This centralized repository allows for easy access to information such as work orders, asset status, maintenance history, and compliance records.
Real-time monitoring: Many managed maintenance solutions incorporate real-time monitoring and alerting features. This means that maintenance issues can be detected and addressed as soon as they occur, preventing them from escalating into larger problems.
Maintenance dashboards: Retail managers can access maintenance dashboards that provide an at-a-glance view of the maintenance status in each location. Key performance indicators (KPIs), metrics, and analytics are often included to help with decision-making.
Predictive analytics: Some managed maintenance systems use predictive analytics to forecast maintenance needs. By analyzing historical data, they can identify patterns and predict when specific equipment or assets are likely to require maintenance. This proactive approach improves visibility into future maintenance demands.
Inventory management: Inventory management is crucial for retail locations. Managed maintenance platforms often include tools to track spare parts and inventory levels. This helps retail managers ensure that they have the right parts on hand when needed, reducing downtime.
Compliance and regulatory tracking: Retail locations are subject to various regulations and compliance requirements. Managed maintenance systems can help track compliance and generate reports to prove that the retail location is adhering to these requirements.
Task scheduling: Managed maintenance allows for efficient task scheduling. This includes scheduling routine maintenance, preventive maintenance, and emergency repairs. Clear schedules improve visibility into when maintenance is planned and when it has been completed.
Supplier and vendor management: Managed maintenance platforms often include features for managing suppliers and vendors. This allows retail managers to monitor the performance and reliability of these service providers, further enhancing visibility into the quality of service.
Document management: Managed maintenance often includes a document management system for organizing maintenance records, manuals, warranties, and service agreements. This centralizes important information and makes it easily accessible.
Mobile accessibility: Many systems offer mobile apps that provide real-time access to maintenance data and reporting. This is particularly valuable for managers who need to oversee multiple retail locations remotely.
Facility management providers typically focus on providing value to their clients, through service enhancement, savings potential, or resources to better manage a client’s store footprint. By doing so, the provider takes on more risk and is held accountable for a cost-effective and high-quality outcome.
Specialized expertise: Facilities maintenance providers are typically experts in their field. They have trained and experienced personnel who understand best practices, regulations, and safety standards. By outsourcing to them, you are entrusting your maintenance needs to professionals who are more likely to perform tasks correctly and safely.
Clear service level agreements (SLAs): When you partner with a maintenance provider, you establish clear SLAs that outline the scope of work, response times, and performance expectations. These SLAs create a contractual obligation, ensuring that the provider is held accountable for meeting agreed-upon standards.
Performance metrics: Facilities maintenance providers often use key performance indicators (KPIs) to measure their performance. These metrics might include response times, resolution times, customer satisfaction scores, and more. By tracking these metrics, you can hold the provider accountable for meeting or exceeding performance benchmarks.
Regular reporting: Most maintenance providers offer regular reporting on their activities. These reports detail the work performed, issues identified, repairs made, and other relevant information. This transparency helps maintain accountability by providing visibility into the provider's actions and results.
Compliance and regulation: Many industries, including facilities management, are subject to regulations and compliance requirements. Outsourcing to a professional provider helps ensure that your maintenance activities are in compliance with these regulations, reducing your legal and regulatory risks.
Cost controls: Outsourcing can also lead to improved cost control. Providers are incentivized to manage costs efficiently, as this can impact their profitability and competitiveness. This means that they are more likely to make cost-effective decisions, which is especially important for your budget and financial accountability.
Resource allocation: With a provider, you can allocate your internal resources more strategically. This allows your in-house team to focus on core activities, while the provider handles maintenance responsibilities, improving overall resource allocation and accountability.
Risk mitigation: By outsourcing, you transfer some of the risks associated with facilities maintenance to the provider. This includes risks related to worker safety, accidents, and equipment failure. The provider's accountability extends to risk management, reducing your exposure to liabilities.
Standardized consistent service quality
By managing the client’s entire real estate portfolio with a consistent approach, all the locations will encounter a similar service experience from the provider, which facilitates benchmarking, program management, and capital investment plans.
Best practices and industry standards: Professional maintenance providers have expertise in best practices and industry standards. They implement these practices consistently to ensure that all facilities receive high-quality maintenance services.
Training and certification: Maintenance providers typically invest in training and certifying their technicians. This ensures that personnel are knowledgeable, skilled, and able to perform their duties to the same standard, regardless of the location.
Consistent procedures: Maintenance providers often have standardized procedures for common maintenance tasks. This consistency ensures that similar issues are addressed with the same level of expertise and adherence to best practices.
Quality control and audits: Maintenance providers often have quality control measures in place. These can include regular inspections, audits, and peer reviews to maintain consistent quality and compliance with standards.
Use of technology: Many maintenance providers leverage technology, such as computerized maintenance management systems (CMMS), to standardize processes, track work orders, and ensure that maintenance activities are performed consistently across locations.
Unified reporting and transparency: Outsourced maintenance providers often offer unified reporting systems that provide real-time insights into maintenance activities. These reports help maintain consistency by providing visibility into work performed, issues identified, and resolutions.
Regulatory compliance: Facilities maintenance often involves compliance with industry-specific regulations and standards. Maintenance providers are responsible for ensuring that all services adhere to these regulations, which contributes to consistent compliance across your facilities.
Equipment and tools: Maintenance providers typically use standardized equipment, tools, and materials. This ensures that the same quality and type of resources are used across all locations, contributing to consistent service quality.
Centralized communication: With outsourcing, communication channels are often centralized. This means that requests, issues, and updates can be coordinated and addressed consistently through a single point of contact.
Vendor network management: If your maintenance provider uses a network of vendors or contractors, they will manage these relationships consistently, ensuring that vendor performance aligns with your standards and expectations.
Besides the value derived from economies of scale, data can be used to better forecast future spend, identify anomalies and predict failure for preventive maintenance and many other benefits. Even on the invoicing and payment side, valuable back-office costs and resources can be reduced with a third-party administrator while the provider’s technology yields timesaving benefits to field personnel.
Retailers benefit from relationships with solution providers that align with the objectives of reducing the overall work order cost, not merely the lowest labor rate. Besides cost reduction, FM technology will provide retailers with complete visibility and control into their maintenance program overall. This type of visibility is something that in-house technicians, facility managers, and even some work order platforms, alone, cannot effectively address.
Industry trends indicate the days of input-based maintenance are ending. Facility maintenance has evolved significantly over the past ten years. More and more retailers are moving to outcome-based delivery that align their objectives with the broader financial and operational goals of their organization.
A well-functioning maintenance strategy is essential to the success of any modern-day facilities portfolio. To make sure your facilities maintenance strategy is meeting your needs, request a demo to learn more about how our programs can help you.