Top 5 Facilities Management Challenges, Part 1

Posted by TIm on September 8, 2009
Stored in Blog

I recently read an article published by Corrigo, Inc who specializes in work order and time tracking solutions. This article lists the Top 5 Facilities Management challenges based on a survey they conducted of over 1,200 companies.

For the sake of space, I will plan to divide their findings into 5 separate blog posts starting with the 5th challenge and work our way up to the top challenge (according to Coriggio). We will explore their findings in the commercial markets and then draw similarities to ministry facilities.

CHALLENGE #5 – Vendor Management:Allocating work to the right vendors repairman and tools

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.”

SUMMARY FROM SURVEY

Improved vendor management increases the control you have over your operations, and by implementing price controls, can reduce your costs.
What Facility Managers are Doing:
• Making vendor decisions based on accumulated performance feedback
• Recording and comparing information on vendor pricing
• Maintaining searchable records of vendor certifications

COOL CONVERSATIONS APPLICATIONS

1. Having the right vendors working on our facilities is important. Are they qualified? How do we qualify them? Where did you find them? The phone book? Do we know what their fee structures are? When was the last time you explored other vendors? These questions should be examined on a regular basis to ensure that we have the right people serving our facilities needs.

2. When was the last time you explored the “real” cost of your vendors? The real costs include not only the invoice from the vendor but also include the cost of locating a vendor, scheduling the work, coordinating the work with your facilities scheduled events, overseeing the work, inspecting the completed work, reviewing the invoice, paying the invoice, addressing “call-back” issues with the work, etc, etc, etc. In addition, do you know what the real costs are when you have on-site staff perform certain tasks? It may appear that it is cost effective to have an on-site staff member address certain repairs or tasks like painting or the like. Top 5 Facilities Management Challenges, Part 1 But is it really, or are you only making that leap based on just part of the information? What is the wage of that person? What is the cost of the labor burden/benefits? Do you also provide items such as a computer, vehicle, uniform, etc? How much does it cost to manage that person? Does the simplest of tasks take longer to get accomplished than if it was performed by a paid professional in that trade? It is critical to understand these real costs to determine if you are actually paying more that you realize.

3. Having insurance on all vendors on your site/facilities is critical. Not only is knowing that the vendor has insurance important, it is even more important to have a copy of the insurance certificate and track the expiration dates of each. It is recommended that you obtain a Certificate of Insurance on each and every vendor including General Sample Certificate of Insurance Liability, Workers Compensation, Vehicle as well as an Umbrella rider. This is for the church’s protection from significant expense in the case of a claim as well as potential legal action. Then, you should keep a file of all vendors along with a a log of expiration dates. It is recommended that you require vendors to give you a copy of an updated certificate prior to expiration

CONCLUSION: There are a lot of details to address when considering vendors and the real cost of using outside vendors as well as staff resources…and be vigilant about the insurance.

Stay tuned for Part 2.