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Articles
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CENTRALIZING OPERATIONS
Retail management systems are now providing support from central headquarters.
Kevin Dent
It has become a necessity for most businesses to create an environment driven by real-time
operations and an increased sensitivity to activities in the global marketplace. Companies
are reaching beyond their former geographic limitations to explore new challenges and
opportunities. After many years of revising a 1980s regional operations formula, large
retail stores and facilities have made the leap to centralized operations. This decision
allows enterprise-wide management systems to provide support to divisional field levels
from central headquarters.
Centralizing Operations
During a recent session at the PRSM! 2002 Annual Meeting at Disney's Contemporary Resort
in Orlando, I discussed theories on the centralization process for national retail
stores and facilities.
After working for more than 25 years in the exterior facility and property management
business, I have noticed corporations beginning to centralize their operations and
services. With the economy changing, technology, budgeting and methods of accountability
are more significant to the management of these services. Internet and hardware
advancements have delivered automated accounting software and real-time Web-enabled
portfolio management that includes digital cameras and signature collection as a way
to Big Brother your entire system for quality assurance.
Although most companies utilize some of these advancements, they still do not effectively
lower costs and cut budgets according to a plan. Unlike the 1980s, there are now fewer
corporations that permit regional managers to handle facility management and purchasing
duties. Even so, there is no single source approach available within large corporations
that address invoicing or a way to set quality assurance standards for literally
hundreds of properties. These services are for the most part contracted locally and
billed nationally. This creates a snowstorm of invoices and problems monitoring quality
assurance.
Centralized Support
Today, some large retail stores have a centralized system that creates facility information
from multiple remote sites readily. However, each regional territory is responsible for its
own area. When disasters hit other parts of the country, many regions end up supporting the
one where the disaster occurs. Thus, when an Atlanta office is asked to help with a storm
in Missouri, they can respond more quickly because they know the resources are available
for all exterior services maintenance (ESM) endeavors. The support advantage is not only
useful for severe storms and disasters, but for many occasions. For example, grand openings,
special sporting events and presidential visits often require maximum centralized support in
brief bursts of time.
Centralizing = Cost Containment
Traditionally, the exterior maintenance industry prices each project by the amount of time a
crew will be on the site performing services. The longer a service company can spend on a
site the less travel time is incurred and better production per crew member can be achieved.
The larger the project the less expensive it is to purchase services. If the project is large
enough, then only the large service companies can accomplish the service to the customer's
expectations. Through the scope of ESM, in any given part of the city there may be several
sites under contract.
ESM companies combine the buying power of all sites and offer this leverage to qualified
contractor partners. If this much combined square footage is all one project, then it may
require the larger contractor and reduce the competitive nature which helps drive down the
costs for all portfolio managers. ESM companies, in effect, combine the buying power of all
customers in purchasing exterior services. This is cost containment and is an ongoing process,
which ESMs utilize to guarantee cost reduction to facility management.
Providing Savings
The future of how retail stores deal with their exterior services, especially those
responsible for multiple locations crossing state lines, indicates a growing interest
in centralization. The cost savings, efficiencies of management, issues of quality and
consistency and, finally, dependability, all indicate that working with centralized
operations and industry-specific professional providers as opposed to local contractors
is the wave of the future. Breakdowns in service over the past 25 years have, for the most
part, been blamed on regionalized operations that lack quality assurance, contractor
communication and real-time maintenance results. With new methods of enterprise-wide
technology, an ESM can enable centralized operations 10 surefire methods of saving
time and money:
- One contract
- One invoice
- One call center
- One insurance certificate
- One emergency contact number
- One online store watcher
- One database
- One relationship
- One way to ensure quality assurance
- One way to ensure your overall spending
Other savings an ESM can provide for a centralized corporation can include consolidating
management of sales and marketing, much of the insurance and legal, even invoicing and
invoice justification. By undertaking these services for numerous contractors at a centralized
base, ESM companies can lower management costs and pass those savings on to the customer.
National facility managers may monitor store locations from a centralized office by utilizing
Web-enabled portfolio management coupled with a guarantee on quality assurance. Contractors
enjoy this relationship because their focus is on completion of the task, which makes up their
core business. So, the customer receives lower cost services, the ESM profits by managing
numerous locations and the contractor stays busy without having to be concerned with management
issues. In essence, centralization combined with an ESM platform creates a win-win situation
for everyone.
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