Facilities management (FM) service providers need thousands of different spare parts at any one time to resolve the thousands of different problems buildings face every day. From simple washers, batteries, lamps or air filters to far more complex expansion valves or pumps; FMs often manage considerable inventories to ensure buildings are kept up and running.
And most FMs feel they run a ‘tight ship’ when it comes to keeping inventory to a minimum. ByBox’s research of the UK’s top FM service providers and consultants shows an average satisfaction level of 7.8/10 in this critical area. Most FM companies operate just-in-time procurement of spares where possible, largely down to tight margins, they can’t afford for spares to be sitting around unused.
This is essential with client-specific spares – unusual spare parts which are only relevant to that particular client – which are often expensive. If the client ends the contract, the FM service provider could lose that investment. Client organisations are similarly reluctant to tie up capital in M&E assets.
FM is a fast-moving sector and there is a constant drive to develop new technology to solve problems; leading to a large volume of new products and suppliers entering the market. This changing technology culminates in high SKU churn. The lighting industry, for example, is moving from incandescent lamps to CFLs and LEDs, resulting in obsolete spare parts. This churn makes service providers even more reluctant to maintain stock levels as they can use new innovations as a competitive advantage.
What’s more, several supply chain specialists that we spoke to during the research, raised the thorny issue of what engineers hold in their vans – which seem to be off-limits to everyone but the engineer themselves.
When it came to the visibility of spare part inventory, the research revealed even more complications to managing stock. Just as the procurement and distribution of spares is managed on a site-by-site, part-by-part basis, the management of stock levels is very much a local affair. While all FM firms have a CAFM system which has the functionality to manage inventory at site, client, regional and national level, many opt to use a site-by-site method to record this data. This varies from a physical checklist to a spreadsheet.
There were lots of complaints about the lack of accuracy. Engineers tend to take parts out of the store and not record what has been taken. There were also questions raised about how the overall CAFM system did – or didn’t – talk to sites on the ground. For example, it could be useful if a local site had a comprehensive picture, through the CAFM system, of which parts were stored where, in case they are needed in the event of an emergency.
The greater effect of these maverick methods of managing stock, means that trends aren’t spotted in the data and repeat offenders that keep breaking aren’t identified. If the data could be accurately analysed, procurement could act more accordingly and mass purchase stock for delivery over night to location; direct from the supplier.
This decentralised approach to inventory management led to FM firms awarding a satisfaction level of 6.7/10 for the visibility of inventory in the field.
So how can the FM sector improve the way it maintains its spare parts inventory? The FM firms we spoke to for the report want to see better inventory management at site and company level. When an engineer uses a part, this should automatically inform the CAFM system at a local and company level and the appropriate action (re-ordering etc) take place. The current manual system doesn’t work and is leading to duplication and overstocking.