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Supply Chain: Why FM Leaders Can No Longer Afford to Ignore Parts & Supplies

Why FM Leaders Can No Longer Afford to Ignore Parts & Supplies
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While there may not be any willful neglect of parts and supplies the pandemic has caused a huge disruption for all of us. At SDI, we believe it’s an inflection point and a great opportunity for the FM community to come together, pause and reset the way we view and manage the parts supply chain.

Given what the global supply chain has experienced during the pandemic and continues to experience with continuous local supply chain disruptions, it is essential to deepen our understanding of the challenges, uncover root causes,  and share value adding practices that you can take back your organization and put into practice immediately.

The Changing Landscape of FM

Two years ago most people did not really understand the importance or relevance of the term supply chain. Everything has changed, now all we hear and see in the news and media is the latest supply chain disruption. It’s on the front page of the newspaper, it’s trending in social media and being covered regularly on television as people can’t get the products they order in a timely fashion. The supply chain has become front of mind for everyone in one way or another, and a very real issue that people are facing even at the consumer level. Currently there are many different and unique factors causing disruption, but the start of it all was the shutdowns resulting from the pandemic. From 2020 we have and continue to see new drivers and forces of disruption. For example the energy crisis in China, port congestion, port labor issues, truck driver and warehouse worker availability and even natural disaster and extreme weather – all of these things continue to drive problems and just like whack a mole as soon as we get one under control the next one pops up. Individuals are feeling the pain in the consumer based supply chain, but as the effects of disruption deepen the impacts will become exponential if facilities managers fail to keep pace and be aware of what is happening on the supply side of the chain and take the necessary steps to respond and future proof their organizations. Timing is critical and the landscape of FM is changing rapidly.  To keep up, organizations must drive improvements or another round of shutdowns will come, not from a pandemic, but rather as a result of poor building maintenance leading to failures of critical systems preventing organizations from remaining open.

Experts agree that the current supply chain issues are now expected to extend well into 2023. However right now shortages and stock outs are common across almost every industry category including, HVAC, refrigeration, electrical, electronics, and even paint. Lead times in general have been extended and with each new disruption fulfillment times are reset. This is causing very little reliability as too when parts, supplies and materials arrive to allow services to be rendered on maintenance and repair work orders. The backlog has and will continue to grow and small nominally priced parts are suddenly not available and preventing jobs from being completed. Organizations cannot afford to have their revenue generating assets experience long extended downtimes.  Even worse, consider the domino effect of lawsuits and damage to brands when assets that are essential for the health and safety of their workers and customers go down or essential PPE is out of supply.

In general parts and materials make up the largest cost for an organization’s facility maintenance budget. Traditionally strategy is in place for services around janitorial, HVAC, refrigeration, plumbing and contracting out services to maintain facilities but the parts, materials and supplies themselves that the service providers purchase on behalf of the organization are unmanaged. The strategic management of parts can reduce waste and performance inefficiency. It is estimated that over 30% of a mechanic or technician’s day is lost and spent looking, shopping or traveling to find parts. 70% of missed first call fixes are attributed to a parts related issue. Without a plan in place, standardization and quality control across regions for large multisite organizations becomes nearly impossible. Without visibility and control parts spend is never leveraged across the organization and consequently is marked up per work order.

Disruptive Technologies are Enabling Transformation

In the FM space emerging technology can no longer be ignored. In the past we may have viewed it as a threat but in today’s supply chain environment it’s no longer a choice.  Ecommerce, online pickup, in-store or apps,  and delivery trackers are tools we leverage everyday as consumers and we have grown to expect a seamless, real time digital experience. Then why do we accept anything less in our professional environment? In facilities management things today aren’t much different then the way it was done 25 years ago. Today’s supply chain crisis must become the inciting factor and inflection point that FM leaders rally behind and begin to demand change for themselves and for their organizations.

It starts by connecting your technology and systems together to form a digital supply chain. API’s, punchouts and other integration enablers are not new, yet in the FM space you’d be hard pressed to find an organization with these capabilities in place. Freight visibility dashboards, spend analytics and source to pay platforms can form a digital ecosystem that brings immediate benefits in asset uptime, safety, efficiency, cost, productivity and occupant experience.

FM leaders are held accountable to various KPI’s, but in reality most of the variables are outside the control of the leader or the mechanic. Consider first call completion for instance – the critical success factors involved would require a complete scope of work validations, a skilled trained technician, relevant tools for repair and the right parts and supplies. This technician would not only need great technology to support their success but accurate data to enable the technology  to function properly. So how can technology help? Let’s give our technician a tablet with OEM manuals, a bill of materials, engineering drawings, R&M SOP, and a list of critical spares loaded on it. Include an asset repair history so the technician can know what kind of maintenance has been performed previously before he even heads to the site. Let’s also link it to a mobile application where he can view the work order management system, order through an ecommerce environment and view his truck stock or nearby warehouse inventory online. In this case our technician has the technology in place to maintain the right parts and supplies and knows exactly what he needs, where it is, and how to get it so the job can be completed the first time. Like this, a strategic approach to parts supported by a digital supply chain technology can transform operations and help leaders take back control over their FM instead of letting supply chain disruptions dictate what they can and can’t do.

How to start – Think big, start small, scale fast.

The goal is to create a vision for change and a consensus to go forward. Start by establishing a baseline and conduct an end to end supply chain assessment. Next benchmark and estimate the total cost of ownership so that you can properly evaluate which types of technology are best for you to invest in based on an ROI. Identify your biggest problems and challenges and optimize a solution one by one. Move from reactive to preventive. Assess and reinvest in the next project to move from preventive to predictive. TCO will continue to reduce and improve so you can streamline and finally move from predictive to prescriptive. Making a business case for change is the true first step, which requires understanding your current challenges and having a vision of where you want to be. 

As a supply chain solution services company, SDI, focuses exclusively on the management of maintenance, repair, and operating supplies or MRO for short. Our customers are typically large multi-site organizations like national retailers, education systems – both k12 and universities, industrial and chemical manufactures, airports, healthcare institutions and many others across a diverse array of industry verticals.

We are a solutions and services company. We don’t sell parts and materials, rather we help our customers manage and optimize their supply chains so they buy smarter and get better outcomes with regard to their maintenance perspective. We are problem solvers. People generally call us after some sort of event, for example a health and safety event, or they have excessive asset downtime or a spike in costs that are attributable to parts. However, the recent disruptions have created great alarm and we are seeing more organizations trying to get a handle on their parts, and the systems that manage them seeking for a way that mitigate risk before disruption happens.

Request to Take the MRO Supply Chain Assessment Today

We craft solutions that drive FM performance improvement on KPI’s like asset uptime time or mechanical productivity or maintenance effectiveness and efficiency. Our approach is less about the parts themselves as it focuses on the connectivity of an organization’s supply chain. What amazes people is that by adding value adding practices and technology to the MRO parts supply chain, other things fall into place and as a result the cost of parts drops dramatically.

Our team of seasoned experts will take a holistic approach in examining your entire MRO supply chain. SDI’s supply chain analysis can help organizations realize massive indirect spend savings, process improvements to save labor hours, companywide organization and interdepartmental communication, and downtime reduction.

The supply chain assessment will allow SDI to map out a strategy using a combination of our services and technology offerings to completely overhaul your company’s maintenance, repair, and operations.

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