The market for facility management services is a multi-billion dollar industry in the U.S. alone. Facility management involves the integrated management of multiple and interdisciplinary technologies, personnel, systems, and processes. The ultimate goal of facility management is to promote an efficient and collaborative environment to meet and fulfill the key objectives and mission of an organization. However, this requires business owners to invest in strategies that are going to allow their facility management personnel to work with large sets log compliancy information, asset maintenance information, and every process through the facility management lifecycle. One of the primary challenges involved in facility management is that as more data points enter a facility, it becomes harder to ensure that accurate asset maintenance records are kept. Due to such factors, companies in the facility management industry are unable to reduce risks and increase operational control.
Key facility management challenges
Efficient facility management involves constantly tackling critical issues every day in the face of a host of obstacles. They are also responsible for bringing together a multitude of distinctive elements. Diligence and flexibility in handling facility management not only defines their success but also that of an entire company. Both large and small businesses must devote a considerable amount of their capital and energy to ensure their facilities are properly maintained and are prepared to meet the challenges of the future.
Every instance of demand placed in a facility management enterprise has a cost associated with it. This includes costs incurred on repairs and maintenance, hiring of staff, inventory and supplies, and safety and security. We at SpendEdge, help clients in facility management organizations track cost expenditures, including detailed historical analysis, to allow for proper administrative reporting and reduction of operational costs.
Another key facility management challenge is the need to rely on many resources to operate the facility efficiently. This includes both full and part-time staff. It also requires different types of service providers. Furthermore, due to limited budgets, facility management teams are expected to deliver more at lower costs. In this case, facility management companies are left with no choice than to identify their optimal staffing requirements and maintain a constant flow of communication between the team so that they are aware of how to increase the overall productivity and improve efficiency.
Meeting compliance guidelines
It is essential for companies to ensure the statutory regulations for managing their documents. This requires a process to ensure that data is stored correctly. In order to remain compliant, it is also important to stay updated on the legislative changes. Facility management professionals often face problems associated with inadequate record keeping that do not meet the expected compliance standards.
One of the best ways to resolve facility management challenges is to bring in a professional and competent solutions provider to help you carry your load. SpendEdge has been helping facility management professionals across the world to build strategies that increase their profits while staying within the budget. Contact us today!
Cutting facility management costs: What businesses must do
As businesses face the need to utilize state-of-the-art infrastructure to remain competitive, controlling facility management spend becomes more important than ever before. Strategic planning is critical to align capital spending with budgets and ensure proper allocation of resources in facility management. While budgets are typically controlled by individual departments within the organization, there are certain steps every facility management professionals can take to contain costs. Here are five ways facility management can control the overall spend:
- Purchase Pre-owned, Refurbished or Rental Equipment
- Preventative maintenance of existing equipment can help reduce operating expenses and create a safer work environment
- Research the supplier and the equipment through product reviews and testimonials for optimal prices and service.
- Organize data and analytics to gain better visibility of expenses across the organization and enable the allocation of resources in the most efficient manner
- Leverage spend analysis to get all the possible benefits from the company’s current spend cube
A leading food manufacturing company was looking at devising a strategic approach to minimize procurement costs. The client approached SpendEdge to understand the benefits of spend analysis when it comes to analyzing spend, decreasing procurement costs, and enhancing efficiency. A detailed quantitative analysis of various categories within the supply chain was carried out to categorize spend data and develop an effective spend analysis framework.
The client is a well-established food manufacturing firm with business units and operations spread across Europe.
The food manufacturing client’s operations were spread across Sweden, Denmark, Belgium, Germany, Netherlands, France, Finland, and other European countries. It consisted of 22 legal entities, each with a different procurement process and spend management framework.
The client realized the benefits of spend analysis and decided to centralize all their procurement functions and spend management systems by devising a robust spend analysis platform. Hence, they wanted to employ an effective approach to regain control of spend data generated across their business units.
Key questions answered in this spend analysis study include:
To gain in-depth insights into our spend analysis solutions
How did SpendEdge Help the Client?
With an increased corporate focus on spend management, the food manufacturing client invested in spend analysis to effectively manage their organizational spend.
- Step 1: Capture relevant spend data
The first step involved the process of identification and gathering spend data from across the client’s business units. It starts with the identification of key business areas that deal with sourcing such as finance, marketing, and other procurement areas. The collected data is then accumulated to form a single source.
- Step 2: Categorize spend data
Once the data is captured it is necessary to categorize it in order to begin the spend analysis process. Categorizing the captured spend data into meaningful groups helps identify areas of maximum and minimum spend. By doing so companies can identify and focus on the target spend category.
- Step 3: Detect the spend categories that can be optimized
The most essential step in spend analysis revolves around the identification of spend categories that are available for spend optimization. Since a few spend categories do not fall under the optimizable group, it is essential to segregate them into two i.e., addressable and non-addressable spend categories.
The identification and classification of addressable spend data reflect the true nature of supply markets and helps generate a link between the spend categories and the allied supply market.
- Step 4: Development of a personalized spend analysis platform
The spend analysis experts at SpendEdge devised a four-step comprehensive approach that helped the food manufacturing client to gain a holistic view of spend categories. A similar approach could be adopted by other food manufacturing companies to enhance spend visibility and drive profit margins.
Benefits of Spend Analysis
The solutions offered by SpendEdge’s spend analysis experts helped the food manufacturing client to increase managed spend by 80% across their business units. This spends analysis engagement also uncovered reasons for major issues of concern that affected the client’s overall profit margin.
The developed spend analysis framework played a key role in enhancing spend visibility which in turn helped them improve contract compliance. The associated benefits of spend analysis played a major role in improving the spend management capabilities of the firm, which, in turn, helped them drive savings.
Benefits of Spend Analysis for Food Manufacturing Companies
There are substantial savings opportunities hidden in the spend data generated by food manufacturing companies across the globe. Extracting valuable insights from raw spend data is now made easy with the help of our spend analysis solutions. SpendEdge’s spend analysis solutions are designed to offer greater spend visibility into the organizational spend data, thereby enabling food manufacturing companies to analyze their spend patterns across business segments.
A methodical approach to spend analysis tied with years of consulting expertise is what drives food manufacturing companies to approach us to help them devise an effective spend analysis platform.
In this spend analysis engagement, we helped a leading food manufacturing client to enhance their spend optimization capabilities by devising a spend analysis framework. Such an approach can also be adopted by other food manufacturing companies to increase managed spend and maximize the potential of their supply networks.
To know more about how spend analysis helps food manufacturing companies
- Supply Market Intelligence helps a Leading Frozen Food Manufacturer to Identify and Assess Factors Affecting Market Volatility – A Food Industry Engagement
- Strategic Sourcing Analysis helps an Anti Inflammatory Drugs Manufacturer Develop and Implement a Strategic Procurement Plan – A Pharmaceutical Industry Engagement
What the Client Wanted
The fast food industry client wanted to review how much they were spending on office products. The supplier of office products to the client also happened to be the co-sponsor of several annual, high-profile events. As a result, they wanted to device better negotiating terms with the supplier, while ensuring the supplier continued to sponsor these events.
Analyzed the office products supplier’s individual stock keeping units (SKUs), pricing, and which items were on-contract and off-contract. This helped the client achieve 17% savings with the supplier.
Fast Food Industry Overview
The global fast food industry is driven by the explosion of new concepts and menus, especially within the limited-service segment. Additionally, individuals today are increasingly seeking inexpensive and fast breakfasts from quick service restaurants. With lunch and dinner meals sales lagging for years, fast food chains are focused on winning over brunch fans. Furthermore, consumers have a growing number of options to get quality food served at their doorstep, which places great demands on fast food operators to offer the highest levels of food quality and service.
Fast Food Industry Challenges
Booming competition: There are several remunerative opportunities for the companies in the fast food industry. This has increased the number of new market players and most brands are now trying to overshadow their competitors by adopting various marketing strategies.
Shift to healthy food options: A healthy lifestyle is the need and demand of the hour. Moreover, there is a common belief that fast food has a lot of side effects and consequently, people generally consume such foods rarely or occasionally. As a result, companies in the fast food industry have been compelled to come up with ways to re-create their products.
About the Client
The client – is an American fast food company headquartered in Illinois, United States. The company’s annual revenue is over US$ 25 billion.
The client wanted to review how much they were spending on office products. The supplier of office products to the client also happened to be the co-sponsor of several annual, high-profile events. As a result, they wanted to device better negotiating terms with the supplier, while ensuring the supplier continued to sponsor these events.
Key questions answered in our spend analysis engagement
To gain in-depth insights into our spend analysis solutions
With the help of SpendEdge’s spend analysis engagement, the client analyzed the office products supplier’s individual stock keeping units (SKUs), pricing, and which items were on-contract and off-contract. This helped the client achieve 17% savings with the supplier. The client also tracked the usage of office products in all their business units every month.
Spend Analysis Solution Insights
Spend analysis is one of the key tools that procurement establishments must use to proactively manage risks, recognize savings opportunities, and enhance the organization’s buying power. Spend analysis is also often regarded as the fundamental foundation of sourcing. It is a tool that sourcing managers can utilize to engineer superior performance.
To know more about how spend analysis helps fast food industry players
A leading healthcare industry player, offering dental care services was looking at devising a strategic approach for effective capital management. The client approached SpendEdge to leverage their expertise in spend analysis in order to transform their bottom line and bolster a strategic vision across their dental care business units. A detailed quantitative analysis of various categories within the supply chain was carried out to analyze spend data and develop an effective spend analysis framework.
The client is a well-established dental care services provider.
The dental care services provider was facing an operating loss of over 7 million, which resulted in a negative operating margin of 2.3%. As a result, they were looking at employing an effective approach to regain internal control of spend data.
How did SpendEdge Help the Client?
- Step 1: Identification and collection of relevant spend data
The first step involved the process of identification and gathering of spend data from different business units. The gathered information included accounts payable, general ledger data, and data from e-procurement systems.
- Step 2: Classification of the gathered spend data
Classification of spend data is the step that follows data collection and it involves the grouping of the collected spend data to standard categories. Classification codes are used to separate data and to make them distinguishable. Regardless of the classification standards employed the main aim of this step was to develop a spend data file with each spend category linked to a unique group.
- Step 3: Detecting the non-addressable spend categories
Since all the spend categories will not be available for spend optimization, it is essential for a company to identify categories which can be optimized. Some of the spend categories of the client which did not fall under the optimizable category included governmental charges and taxes.
This step revolved around the identification and segregation of addressable and non-addressable spend categories. Also, identifying and clustering addressable spend data into categories reflect how individual supply markets function and help create a link between the related spend categories and the associated supply markets.
- Step 4: Development of a tailored spend analysis platform
The spend analysis experts at SpendEdge devised a comprehensive approach that helped the dental care client to gain a holistic view of spend categories. It also enhanced spend visibility and helped drive overall savings by a considerable percentage. It also enabled them to turn their negative operating margins into a positive scenario.
Key questions answered in this spend analysis study include:
Benefits of the Engagement:
The solutions offered by SpendEdge’s spend analysis experts helped the client identify the spend categories that have the most potential for delivering benefits to their organization. This spend analysis engagement also revealed major issues of concern that affected the client’s overall profit margin.
The developed spend analysis framework enabled the dental care services client to enhance spend visibility across different supply chain categories. Our spend analysis experts also assisted the healthcare industry client in improving their spend management capabilities which, in turn, helped them drive savings.
Why is spend analysis essential in the healthcare industry?
There are substantial opportunities hidden in the spend data generated by typical spend management systems and spend analysis which enables organizations to extract valuable insights from raw spend data. SpendEdge’s spend analysis solutions are designed to offer greater visibility into the organizational spend data; thereby, enabling market leaders to visualize their spend patterns across business segments.
Moreover, our methodical approach to spend analysis tied with years of consulting expertise and technical proficiency can help convert raw spend data into strategic sourcing opportunities to drive savings in any multifaceted industrial segment such as the healthcare industry.
In this spend analysis engagement we helped a dental care services provider enhance their spend management capabilities by devising a robust four-step spend analysis framework. Such an approach can also be adopted by other industry players to maximize the potential of their supply chain functions.
With healthcare industry leaders increasingly focusing on improving their spend management capabilities to maximize profits, it is also essential for them to redefine their strategies to sustain the competitive pressure. So, what are you waiting for! Turn your challenges into a competitive advantage by investing in spend analysis Today!