In 2024, facilities management (FM) leaders can no longer afford to ignore the parts and materials supply chain. As revealed in our recent whitepaper, unmanaged and fragmented supply chains have created major operational inefficiencies, increased waste, and higher costs for multi-site FM organizations.
The impact is staggering – on average, technicians spend 25-40% of their time simply waiting for or looking for parts needed for repairs and maintenance. This “wrench time” productivity drain is being exacerbated by the accelerating retirement of experienced baby boomer technicians, leading to a loss of vital intellectual property.
At the same time, parts and materials can account for 25-30% of a retailer’s total FM operating budget. Yet this significant spend has gone largely unmanaged, with limited visibility or optimization efforts. As the whitepaper states, “This is not a result of willful neglect or ignorance; rather, it stems from the challenges related to managing a geographically dispersed network of facilities through a fragmented base of in-house and third-party service providers and parts suppliers.”
The challenges don’t stop there. Supply chain disruptions have led to price increases of 12-15% on average, extended lead times of 30-50% for some commodities, and more unplanned downtime for revenue-generating assets due to stockouts. With operating margins in retail hovering around just 3%, these FM supply chain inefficiencies are becoming unsustainable.
Integrated Parts Management: The Path Forward
Fortunately, there is a better way – implementing an Integrated Parts Management (IPM) solution tailored for the unique needs of multi-site FM organizations. An IPM platform provides complete visibility and control over the parts supply chain through process digitization and advanced analytics capabilities.
The benefits are massive:
- 10%+ reduction in total supply chain costs
- 20% improvement in technician wrench time
- 30% increase in first call completion rates
- Optimized inventory levels across all sites
- Better demand forecasting and planning
- Improved uptime for critical assets
An IPM solution aligns the parts supply chain with the overall FM strategy and enterprise asset management goals. Processes are streamlined, inefficiencies are eliminated, and maintenance performance metrics see measurable improvement.
Key Technological Enablers
A variety of technological advances have enabled the rise of digital transformation solutions, making 2024 an ideal time for implementation:
- Mobile apps and smart devices for technicians
- Widespread eCommerce for industrial parts
- Adoption of AI/machine learning for supply chain analytics
- Industry 4.0 and the Industrial Internet of Things (IIoT)
- Integration capabilities through open APIs
- Emergence of specialist-managed service providers
With these enablers in place, multi-site FMs can finally gain the real-time visibility, advanced analytics, and vendor management capabilities needed to transform the parts supply chain from a cost center to a source of value creation.
Starting the Journey
While the shift to IPM may seem daunting, SDI’s philosophy of “Think Big, Start Small, Scale Fast” as a step-wise approach:
- Start with key categories like HVAC parts
- Focus first on critical assets or regions
- Bring on additional asset types and regions over time
- Facilitate organizational change management
The processes and technology involved can be complex, but the potential rewards in cost savings, productivity gains, and risk mitigation are well worth the effort. Digital transformation promises greater visibility and transparency but depends greatly on an organization’s willingness to be flexible and open to innovation.
For multi-site FM leaders, maintaining the status quo is no longer an option in 2024. The time to embrace Integrated Parts Management is now. By optimizing this underserved yet vital part of the FM supply chain, organizations can unlock immediate value, increase competitiveness, and propel their journey into a digital-first future.
Ready to begin your IPM journey? Contact SDI today to request a Supply Chain Risk Assessment and explore how our Integrated Parts Management solution can transform your multi-site FM operations.