Typically, at the outset, there is a discussion generated either by the facility management organization itself or senior executives to consider externally provided services as a means to enhance or improve the quality of facility management services. In fact, looking back over facility management outsourcing history underscores the quality rationale as one of the most compelling reasons why companies elected to move to an outsource relationship. Over time, however, priorities have changed as corporate motives shifted to cost control and reduction as a driver for outsourcing.
Successful Supply Chain Cost Reduction and Management Sep 27, Cost Saving 8 comments If you were to tell me that your company had never looked at its supply chain costs and sought to deliver reductions, I would be mightily surprised.
Most companies start out with the best intentions to achieve successful and sustainable supply chain cost management, but somehow seem to lose momentum, only to see costs increase again in fairly short order.
The following five mini case studies explore a few high-profile companies that have Facilities management outsourcing case studies to sustain their supply chain cost reduction efforts and keep expenses under control.
The challenges faced by these organisations and the steps they took, may provide some inspiration for successful long-term cost management within your own organisation.
Supply Chain Cost Reduction Challenges: Deere and company has a complex product range, which includes a mix of heavy machinery for the consumer market and industrial equipment, which is made to order.
Retail activity is extremely seasonal, with the majority of sales made between March and July. The Path to Cost Reduction: The company also increased its use of third-party logistics providers and effectively created a network that could be tactically optimized at any given point in time.
Supply Chain Cost Management Results: Somehow Intel had to reduce the supply chain costs for the Atom chip, but had only one area of leverage—inventory.
The chip had to work, so there were no service trade-offs that could be made. Being a single component, there was also no way to pay less in the way of duties. The only option was to try to reduce levels of inventory, which, up to that point, had been kept very high in order to support a nine-week order cycle.
The only way Intel could find to make supply chain cost reductions was to bring this cycle time down and therefore reduce inventory. Intel decided to try what was considered an unlikely supply chain strategy for the semiconductor industry: The company began with a pilot operation using a manufacturer in Malaysia.
Through a process of iteration, they gradually sought out and eliminated supply chain inefficiencies to incrementally reduce order cycle time. Further improvement initiatives included: Through its incremental approach to cycle time improvement, Intel eventually drove the order cycle time for the Atom chip down from nine weeks to just two.
Like Intel, Starbucks is pretty much a household name. But like many of the most successful worldwide brands, the coffee shop giant has been through its periods of supply chain pain. As in most commercial sectors at that time, sales were falling. When the supply chain executive team began investigating the rising costs and supply chain performance issues, they found that service was indeed falling short of expectations.
It also opened a new production facility, bringing the total number of U.Welcome to Fullcircle, a trading name of Three Nations Ltd is a national provider of drinks dispense and facilities management services in the UK.
We offer a comprehensive and integrated range of services to fulfill our clients’ property maintenance requirements. Where FMs get Maintenance & Operations news, releases, education and can find out how other facility professionals addressed similar challenges in their buildings. Thanks for visiting!
Sign up to receive our free weekly enewsletter, and gain access all our FREE articles, tools, and resources.
Facilities Management - A 2-Day Comprehensive Course Learn the techniques used by leading facility managers to create a safe, cost-effective and employee-friendly environment. Leader in CAD Drafting & BIM Services. Hi-Tech is a fast-growing CAD services company with a workforce of + CAD drafters, engineers and architects and a global client base of high-end engineering design firms, manufacturers and construction companies.
CONCLUSION The study on the comparison between outsourcing and in-house facilities management concludes that outsourcing in facilities management defined as contracting out to obtain the services or products from an outside provider instead of having them provided by in-house resources.