Articles by "Facility Management"
Showing posts with label Facility Management. Show all posts

on Friday, September 17, 2021 0



As offices across the country begin reopening, many organizations have begun the process of reengaging former facility service providers to reactivate programs that were disrupted as a result of temporary facility shutdowns.  Some examples of categories impacted by facility closures includes services such as water & coffee, food & beverage, security, and janitorial services.  While there is a lot to gain by establishing a go-to-market sourcing strategy for each of these categories, this blog will specifically focus on how to successfully source best-in-class janitorial and cleaning services. 


Identify current state vs desired future state

Before going to market it’s important to understand what’s working and not working with your current janitorial services provider.  Take the time to run an internal review and score the supplier based on factors that are important to your company, some examples may include: Is facility cleanliness acceptable, are staffing levels adequate, are response times for emergencies acceptable?  Understanding the pain-points with your current supplier will help naturally pivot the next crucial step which is updating and/or creating a Scope of Work to align with your desired future state.  The Scope of Work (SOW) should be created and included in your janitorial services contract to ensure supplier expectations are clearly established.  Any concerns regarding the requirements established in the SOW should be aligned on between both parties prior to contract execution to ensure your desired future state is fully understood.   


Request for Proposal (RFP) development

Prior to building your RFP to receive supplier pricing, it’s important to ensure you have the correct janitorial service providers invited to this sourcing event.  I highly suggest starting this process off with a Request for Information (RFI) with detailed questions submitted to a wide range of potential suitors to help identify suppliers that fit the needs and requirements within your newly updated SOW.  Once this list of potential janitorial services providers has been properly vetted, the RFP construction process can begin

When building your RFP, it’s important to arm bidders with the proper metrics to ensure an accurate bid can be delivered to help meet the requirements established within your SOW.  Some examples of metrics that will lead to a successful RFP may include: total locations in scope, cleanable sq/ft per location, supplier’s forecasted full-time employee (FTE) bid count per location, and FTE hourly rate per location.  While there are many other metrics that could also be included, these selected inputs shared by bidders will enable you to accurately understand costs by location as well as the total cost to service your janitorial services portfolio.


Holding awarded supplier accountable

Congratulations, you’ve successfully gone to market and identified your suitable janitorial services provider through a successful sourcing initiative.  While you’ve confirmed that the supplier’s price is acceptable, now is not the time to let up!  It’s important to establish processes during the contracting phase to help manage expectations of the supplier, and to ensure they are held accountable.  For instance, if you wish to establish a required cleanliness score minimum across your entire portfolio, apply language within the agreement that applies penalties associated with facility scores below a certain threshold.  Quarterly check-ins should also be a goal to ensure continuity is in place, this can be achieved by including language in the contract requiring Quarterly Business Reviews (QBRs) to be conducted.  While these suggestions may not seem like much, they can often mean the difference between a good program and a great program.  


Going out to market can be a daunting task at times, I hope this blog helps guide you and your organization along the way to successfully source best-in class janitorial and cleaning services.  


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on Wednesday, June 09, 2021 0

How a digital supply chain can help transform the future of logistics

The world is moving from physical to digital, from wasteful to sustainable, from delayed to instantaneous, and from manual to automated. This faster pace of commerce and the disruptions force us to re-think how we do business. As a result, this
innovation provides an opportunity in disruption. It creates fertile ground for innovation and partnerships that deliver new products, services, and business models to an industry that is in dire need of re-inventing itself to keep pace.

The future of logistics benefits from the data provided by multiple systems, advanced analytics, and the automation of intelligence. As information is provided through the many different sources, the digital supply chain connects technologies, assets, systems, and locations to enable real-time analysis, smarter decision making, and informed actions inside the supply chain.

The data provides predictive analytics that helps shape new strategies for transportation and logistics. It takes into account all variables inside the supply chain, as well as traffic, weather, and social trends, to create an accurate plan. It also allows for flexibility. For example, instead of creating monthly plans, strategies are set weekly or daily to meet inventory volatility and customer demand.

While this breaks the traditional steps between fixed processes, it opens the door for continuous improvement. It allows for better placement of inventory in warehouses that drives quicker order fulfillment. The data, connectivity, and analytics provides the foundation for automation and smart warehouses.

Robotics such as autonomous forklifts, transporters, and assembly line vehicles provide a safe, efficient, and reliable solution for the movement of goods in a warehouse, while improving productivity, visibility, and customer service levels.

Wearable technology gives managers and employees the capability to exchange data between devices and the network. Wearables support core processes such as shipping, receiving, routing, inventory management, picking, and replenishment.

Outside of the walls of warehouses and distribution centers, advanced vehicle technology that includes everything from in-cab systems to engine and trailer diagnostics, and from electric and hydrogen fuel systems to autonomy is transforming the supply chain. Connected trucks have the ability to provide a plethora of data that translates into business intelligence and key predictive analytics with the right people utilizing it.

Having all these pieces in place – technology, data, analytics, warehouse automation, advanced vehicles, and infrastructure – a connected digital supply chain can be adaptive and responsive to the demands of consumers. It gets products to assembly lines quicker and when needed. It strategically maps warehouses and distribution centers for inventory placement, and eliminates waste inside the supply chain. It drives accurate, efficient, and accelerated e-commerce fulfillment and last mile delivery.

The digital supply chain connects everyone involved from suppliers to the consumer. Products can be seen moving through the supply chain, fleets can maximize uptime, and consumers can better predict the delivery of their products they purchased. Companies can meet sustainability regulations, digitize records, and forecast better.

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on Monday, November 30, 2020 0

Many organizations in the manufacturing and industrial field often find themselves working tirelessly to ensure employee safety is practiced through the utilization and procurement of a wide variety of PPE equipment.  The immediate threat of COVID-19 to the workforce has also created greater visibility within the safety category to ensure employees are properly protected.  The purpose of this blog is to help establish a roadmap related to the processes and procedures that will help your organization improve its safety program while also establishing significant cost savings. 

Well before the process of aligning on safety SKUs should be made, the first critical step is understanding and agreeing on the key decision makers within your organization regarding anything safety related.  If an Environmental Health & Safety (EH&S) department is not established within your organization, now is the time to do so.  A reporting hierarchy within your EH&S department should also be clearly established.  For instance, an EH&S Director should be the final decision maker for safety compliance and SKU standardization at all facilities across the organization, while an EH&S Coordinator should be responsible for compliance and enforcement at the local level.  This reporting structure is a critical piece of your overall safety strategy not only to ensure compliance across the organization but to also guarantee significant cost savings.  

Once your EH&S team hierarchy is built and properly aligned, the next step is to understand the “need to have” vs “nice to have” safety SKUs for your organization.  Any “need to have” SKUs should be rather clear – these would include OSHA (Occupational Safety and Health Administration) required equipment related to your specific field or any gear that is paramount for employee safety that should be identified and clearly defined (hardhats, fire retardant coveralls, COVID facemasks, etc.).  Working to solve for the “nice to have” category is often times a very difficult to define gray area between comfort and cost.  For instance, if your team works outdoors often, consider investing in the “nice to have” option of weatherproofing materials to ensure rapid moisture evaporation and rain proofing to help drive efficiency.  When addressing the “nice to have” category, there are usually significant cost ramifications that need to be properly evaluated before making any significant decisions.

Once the need vs nice to have discussion has been aligned on, the next step is to begin understanding and developing a SKU consolidation strategy.  This critical step is what often separates a good safety program from a great safety program.  The goal here is to fully understand what PPE categories need to be utilized by your employees, and to establish EH&S approved only SKUs within each specific category.  This process will lead to a custom internal catalog between your employees and awarded safety supplier to ensure ease of purchasing and compliance.  In addition, this custom catalog will protect your organization from “off-catalog” non-compliant PPE gear that would create additional costs while also putting your employees at risk for potential injury.

When identifying the SKUs that will qualify for purchase in your custom safety purchasing catalog, it is important to do your due diligence and full evaluation of each SKU in the running.  For instance, when aligning on an item such as safety gloves, performing on-site testing and a comparison of cut-sheets for each product under consideration will help provide tangible data to help influence your decision.  The EH&S team can oversee this process by distributing the PPE gear under evaluation with accompanying surveys to select employees in the field, while also internally reviewing the safety standards and specs identified in each cut-sheet.  This process will establish both a qualitative and quantitative analysis of each pending SKU, which will prove to be tremendously helpful in guiding the EH&S team towards a final decision in establishing cost savings within an improved safety program. 


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on Thursday, September 10, 2020 0

Each week, we will go into details on how to address project and change management now to create a resilient and robust organization for tomorrow.

If you missed last week’s blog on Employee Training, you can check it out here.

This week, we will look at the 6th and final way a company can use downtime to impact the greater good of the organization and position themselves to be a better, stronger company when the work picks back up.

Optimize, Organize, and Design

When companies expand over time, it’s easy to just add on piecemeal to handle that growth. Those adjustments may work in the moment but as growth continues and operations begin to change or shift, how many times are those added processes and procedures revisited? An organization may not want to look at ways to become more efficient or effective because what they have in place still works. Those companies are in jeopardy of quickly falling behind the competition. However, if a growing company is willing to peel back the layers of the onion periodically and look at ways to optimize, organize, and design their entire operation as growth occurs, it becomes much easier to make adjustments along the way.

Specific Example: Reorganize the Warehouse

Deciding how to design a warehouse layout is a step of vital importance—it can make or break the productivity, safety, and overall success of a warehouse. The layout of your warehouse needs to maximize available space, allow for limited travel time, provide easy access to product, and create a safe work environment. While it can be challenging to design a layout that fits all needs, proper analysis of business objectives and practices, as well as a dedication to safety and a cultivation of productive procedures, can help you come up with a design that is optimal for success.

From receiving to storing to shipping, the layout and flow of your warehouse will determine in large part how well your business operates.

Following are 5 warehouse organization tips to get your warehouse in order and improve the speed and efficiency of your employees:

1. Re-evaluate your warehouse layout design

  • Keep the following design elements in mind when planning (or updating) your warehouse layout:
  • Flow – meaning the uninterrupted movement of materials, people, and traffic within your building
  • Accessibility – meaning every product and all products on pallets should be accessible by everyone, usually without the need to move one product to get to another
  • Space – meaning the maximum warehouse space you can afford, taking into consideration storage, stock, offices, working areas, empty pallet storage, battery charging, etc.

2. Use warehouse racking organization

Warehouse racking organization is a method of storing your inventory vertically instead of horizontally, such as on pallet racks. This is a cost-effective way to maximize your warehouse space if you carry a lot of inventory or if you have a small warehouse and can’t afford to buy more space.

3. Use ABC Analysis to set up warehouse inventory

ABC Analysis of inventory is a method of sorting your inventory into three categories according to how well they sell and how much they cost to hold:

  • A-Items – best-selling items that don’t take up all your warehouse space or cost
  • B-Items – mid-range items that sell regularly but may cost more than A-items to hold
  • C-Items – the rest of your inventory that makes up the bulk of your inventory costs while contributing the least to your bottom line

4. Label warehouse inventory

Your employees shouldn’t have to rely on memory when searching for items in your warehouse. Every SKU in your inventory should be clearly labeled for easy identification.

Keep your labeling consistent for every item (i.e., always label the bottom right corner of boxes) and include all the necessary information on every label, such as:

  • Product name
  • SKU
  • Color
  • Size
  • Date

5. Make receiving inventory easy

Receiving inventory effectively is one of the key warehouse management tips because it sets the tone for the rest of your warehouse and inventory processes.

Here are a few ways you can improve inventory receiving:

  • Optimize your receiving space by providing the proper tools and enough space to allow your employees to sort and store incoming inventory.
  • Keep your receiving space clean and organized by removing clutter and putting every tool away after using it.
  • Track inventory in real-time by implementing a perpetual inventory system, in order to reduce miscounts, missing inventory, and incorrect shipments.
  • Monitor quality control by hiring a quality control manager to watch for mistakes, point out problematic procedures, and reduce the instances of inventory damage.
  • Unload received inventory quickly and safely by using the appropriate machines (i.e., forklifts and conveyor belts) and following clear safety procedures.
  • Avoid shipping the wrong items to your customers by verifying the goods received using metrics, such as the description of goods, product code, batch tracking number, etc.

A well-run and well-organized warehouse is a critical function within a company’s sourcing and procurement management efforts. While there is a direct relationship between procurement and supply chain management, the two functions are not interchangeable.

Procurement is the process of getting the goods and materials your company needs, while supply chain management is the process of transforming those goods into products and distributing them to customers as efficiently as possible. Warehouse operations are often where these two practices cross paths, so this pivotal business operation requires the most efficient and well-run systems.

Series Conclusion

It’s easy to become complacent in the way your company does business. If the company is turning a profit, employees are perceived to be happy, and suppliers and clients are limited in their complaints, then why spend the time to self-evaluate and make potentially disruptive changes? Times will change. Industry will change. The world will change. Preparing your company to have the structure in place to withstand economic downturns or extreme cases like global pandemics will allow for a quicker rebound when those crises are over. More importantly, a company’s ability to find ways to improve and evolve, no matter what the global economy indicates, will be a critical measure for your company’s future.

If you would like to download a free white paper from the Corcentric website where all 6 parts of this series of blogs are organized into one single document, please visit our library here.

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on Friday, August 14, 2020 0

Each week, we will go into details on how to address project and change management now to create a resilient and robust organization for tomorrow.

If you missed last week’s blog on Cultivating Supplier Relationships, you can check it out here.

This week, we will look at the 2nd of 6 ways a company can use downtime to impact the greater good of the organization and position themselves to be a better, stronger company when the work picks back up.

Assess Inventory Management

Manufacturing companies often look for the best time of year to perform in-depth inventory counting and reconciliation. For most, the holidays are the best time to do so. For others, whatever slow season makes the most sense will often get utilized. Performing a full inventory check is time-consuming, but necessary. Ensuring the accuracy of the inventory management system is critical when planning production for the future. When a count is off, the risk of not meeting a customer’s needs increases. It’s critical to identify the best time to review minimum stock levels, simplify the reordering process, and look at ways to automate processes. In the future, this downtime filler could be a thing of the past. Businesses utilizing automatic identification and data capture (AIDC) asset tracking processes are able to reduce the frequency of manual inventory counts and save substantial labor hours. That will help free up time to tackle some of the other projects suggested here. Essentially, the next time inventory is conducted, use it as a benchmark and then utilize process improvements in order to track enhanced efficiencies.

Specific Example: ABC Analysis or the “The Pareto Principle” (The 80/20 Rule)

When it comes to stock or inventory management, ABC analysis typically segregates inventory into three categories, based on its revenue and control measures required:

·       A is 20% of items with 80% of total revenue and requires tight control

·       B is 30% items with 15% revenue

·       C is 50% of the things with least 5% revenue and indicates more most liberal treatment

The numbers of any particular company may be different but have a similar distinguishable pattern. An ABC analysis aims to draw managers’ attention to the critical few (A-items) and not on the trivial many (C-items) and focus inventory control efforts on those particular items where management will have the most significant effect.

Once an ABC Analysis is complete, companies can use this data in supplier negotiations. When it’s all about getting the category A products sourced, it is understood that 70 percent to 80 percent of the money is about to be invested in those suppliers. Negotiation is a must. There are chances when a supplier might make a nod to your offer, but do not back off. You can still make offers like reducing the down payment, providing free shipping, etc. Your goal should be a win-win for both yourself and the supplier.

Please check back next week for a look at part 3 of this series where we will discuss ‘Supply Chain Reconfiguration’.

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on Thursday, April 09, 2020 0


When undertaking a holistic spend review in order to identify opportunities for cost reduction it is important to deploy all the tools in your toolbox in the right way. If you don’t deploy the correct tools or strategies you may be selling yourself short or investing too much time and effort into an area that is not warranted. Everything should always be looked at from a time to value perspective. Today I’d like to discuss when it makes sense to conduct Request for Proposals (RFPs), Request for Quotes (RFQs), Direct Negotiations and Group Purchasing Organization (GPO) implementation. Or in a nutshell building a strategic roadmap.

Generally speaking, RFPs should be utilized for categories that are more strategic to the organization and are more than just price focused. You want to identify additional elements and value adds that may be available in the market plus validate that the supplier meets your minimum criteria. There needs to be a wide enough supply base to ensure an element of competition and perceived threat.

But when do you decide that the category should be strategically sourced vs. working to implement a GPO solution? Do you have enough spend to leverage within the category? Often times, you may feel like you have a lot of spend in a given category, but how much does it actually mean to the supplier? The advantage of a GPO is that they are leveraging all of their members spend to drive lower pricing. Also how much time are you going to invest in the sourcing process and how much additional value do you think you may achieve if you are to conduct a full scale sourcing process? These are things that should be considered prior to blindly just applying a strategic sourcing strategy since strategic sourcing requires the highest level of engagement and utilizes the highest level of resource time.

RFQs are a modified version of a RFP where you are still soliciting responses from the market. However, RFQs are 100% price focused and are generally applied to more tactical categories where the suppliers are providing very similar to exact same products or services across the market. There isn’t much to it as far as service levels and value adds go and you are purely interested in reducing cost. But again you need to consider that although not as labor intensive as a RFP, RFQs still have very similar touchpoints. You also need to ask yourself, are you confident that you have enough spend to leverage to beat what you could have gotten going through a GPO program?

Unlike traditional RFP and RFQ categories, direct negotiation type strategies are typically applied in the following situations; there is an extremely limited supply base, the business has no incentive to move from the incumbent supplier and they highly value the relationship, you have a high level of market intelligence and do not need to solicit the market. Negotiating is a skill but having market intelligence is extremely helpful although not necessary.

So when should you assess a GPO and what are the benefits? The most obvious benefit is that the GPO program leverages all the spend across the entirety of their member base to ensure they are providing continuous cost savings and value for all their members. The GPO also manages the supplier relationship and overarching contract for you. But what does that really mean? It means that on an ongoing basis they are ensuring the supplier is meeting performance objectives, hitting KPIs, maintaining SLAs and of course modifying their pricing according the changing environment of purchases made by their member base. That being said if it is very important to you that you are managing the contract and maintaining the entirety of the end to end supply relationship management, utilizing a GPO is most likely not for you for the given category. However, if it’s a category that in the grand scheme of things is a lower to mid-level spend category and you are looking for low touch, immediate savings, it 100% make sense to look towards a GPO solution.

Corcentric applies a multifaceted approach, making the appropriate recommendations for the given category situation. We recognize there is no one size fits all approach. Thing should be looked at strategically and holistically in order to ensure that the right approach is being applied to a given category. In today’s environment not only is finding cost savings paramount but the speed to realizing savings is just as important.

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on Thursday, February 20, 2020 0

For many organizations, Indirect spend is a challenge to understand, as much as manage. The spend is often substantial and easier left alone. On top of that, you may not have the resources to dive in and get the many categories under control. If you are beginning to dig into into your Indirect categories, or you have been with dismal results, here a 5 issues that may be beneficial to correct first.

1. Your Procurement Managers do not KNOW the categories they manage.


It is important to at least have a working knowledge of the categories you are working within. If you do not know the ins and outs, that is fine, but being able to speak the language is necessary. Not understanding a category opens you up to tougher negotiations, worse contract terms, unnecessary spending, and a negative view of Procurement from stakeholders. It is important for Procurement to be involved in any negotiation early, however, coworkers and suppliers will not demand your involvement if you slow them down.

If you are thrown into a category, be upfront and honest with stakeholders who can show you the ropes internally. This way you are taught with the bias of your company in mind. If the supplier is your source of information, you may be taught dishonestly in some, but rare, cases. For example, if once monthly HVAC maintenance is acceptable, a supplier could instruct you that twice monthly service is necessary to get double the business. With stronger category knowledge, you could avoid doubling the required maintenance expense. The same situation could apply to contract negotiations. If a supplier is aware of your lack of knowledge, you could end up with terms that do not benefit your company’s goals. Most importantly, the respect from suppliers and stakeholders to require you be present in negotiations is paramount. As the Procurement representative, you may not be a category expert, but you more than likely are a negotiating and contracting process expert. This is where you will shine, so garnering the respect to be present is extremely important.

Source One Corcentric Gears and Belts MRO Indirect Spend2. Your data tells the wrong story.


How much trust can you put in your internal reporting? How well do you know what this data represents?

Procurement Managers often believe the exact story that their reports are telling them. They choose a category, run a report, and take the total of the spend column as the exact amount of spend in that category for a time frame. However, this is often not the case. Understanding the data allows you to understand the category much better. If your company has a large amount of spend without corresponding purchase orders, be sure to understand whether you are seeing this data or not. Know whether you are looking at spend that has been received against a purchase order or matched and paid against a purchase order. If you do not know exactly what the data you are seeing is telling you, your ability to find cost saving opportunities is greatly diminished. You also risk working within a category that has little addressable spend.

3. You have too many old contracts with too many suppliers.


Contracts are one of the most relevant pieces of information for the Procurement department’s success. Many companies rely on contracts to lock in pricing, payment terms, and other legally binding agreements between the company and supplier. However, contract management is often forgot about as business goes on as usual. The clear line of communication between the supplier and company is lost as the contract renews over and over for years. The benefits the company was getting when the contract was signed are now outdated. Procurement could potentially negotiate a much stronger contract, but no longer knows the contract exists.

This is common among conglomerates and large companies with decentralized purchasing, especially when standards for contract management are not a documented company procedure. Once Procurement begins to analyze the category, it is extremely difficult to get a hold of all the contracts with all the suppliers. The easiest way to avoid this is to consolidate contracts and suppliers. This can be a great opportunity for cost savings, as well! The consolidated spend will make your contract negotiation much stronger as you drive spend to less suppliers. Finally, be careful about evergreen clauses that automatically renew contracts. Once communication breaks down between Procurement and the suppliers, the contracts become a nuisance that will not go away. If necessary, use short term evergreen clauses that renew for a year or two at the most.

4. You are concentrating on the wrong categories that are too difficult, or have too little addressable spend.


For multiple reasons, Procurement managers can have their focus on the completely wrong categories to drive cost savings. If you solely consider spend, it can mean focusing on a category with a small amount of addressable spend. Be sure the large numbers are in fact addressable. For example, freight is a high spend category for certain companies. However, the cost is often high no matter what carrier you use. A better situation could potentially be negotiated, but there is a ceiling to the savings.

Procurement should also be considering when the last time the category was taken to market. If your resources are limited, addressing a category that has not been analyzed for years may be the better decision. Finally, reflecting on whether you are addressing a category because it is one you know well may be another opportunity for improvement. I have seen this multiple times. A Procurement manager is comfortable with stakeholders in one category of spend and continues to look for savings to work with the same department. This often leads to unproductive analysis from the manager that is continued down the chain to the analyst level.

5. You are overdoing due-diligence and not “getting in and getting out”.


Perhaps the most unproductive way to handle Procurement is to overdo due diligence without making any decisions. What I mean by this is looking into spend, analyzing, meeting with suppliers, running RFP’s (Request For Proposal) or RFQ’s (Request For Quote), negotiating contracts, and then doing it over and over without making any changes. At some point, a change will need to be made to actually render savings. If you are not making any decisions, you are not affecting the organization in a positive way. Be careful not to sit in the supplier sourcing function of Procurement for too long. This can cause Procurement managers to be viewed as wasting stakeholders’ and suppliers’ time. Not everything needs multiple meetings, and everyone on the organizations’ and suppliers’ end does not have to be present to have a quick conversation.

Finally, remember what the function of Procurement is. We are here for sourcing, contract management and negotiation, and supplier management. Good Procurement is simply getting as much of your organization’s spend under control. We are not Finance, we are not Accounts Payable, and we are not IT. This is what I mean by get in and get out. Too many times, Procurement gets stuck with processes that handcuff the department from doing what it is there to do. To be effective, take on as few non-Procurement functions as possible. Since we are so hands-on in the beginning stages of a supplier relationship, we often are the ones used as a fall back for tasks other departments do not want to handle. So, when possible, get in and get out, and find the next category to get under control!
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