VP Facilities & Utilities for Retailer X
“We were basically fire fighting, and knew we needed a better solution. We had no good metrics and hence, no way to make informed decisions. The challenges were tremendous and there was an immediate need to centralize the management of the facilities and become smarter in our approach.”
Background
Retailer X is a mall-based specialty retailer with six major retail brands operating more than 4,000 specialty stores across the continental United States. All of the stores are corporately owned and together have annual sales of approximately $9.4 Billion.
Opportunity/Challenge
Getting a true handle on maintenance costs and finding cost-effective, quality services for multi-unit, geographically dispersed retail stores has always plagued the retail industry. Solutions are typically fragmented and limited in their ability to truly capture useful data. Retailer X had long struggled with finding a comprehensive and effective solution.
The company had no visibility to the true cost of maintaining their stores. They lacked accurate data with which to make decisions, and each brand within the portfolio had a different capital/expense guideline and would defer costs in their own way. Each brand competed against each other and there was no sharing of best practices or combining of spending power. They relied on a network of brokers to perform facility maintenance work because they lacked tools to properly manage a large network of vendors. Additionally, Retailer X knew they were losing revenue due to poor facility maintenance, not performing preventative maintenance and continuing to defer costs from one year to the next.
Solutions
"FacilitySource stood head & shoulders above other options as it gave us a complete program including a state-of-the art call center, strategic alliances with best of breed vendors across the country, vendor metrics and accountability and sophisticated retail specific software with real-time data that allows us to make informed decisions,"..."It really was a no-brainer."
-VP Facilities & Utilities for Retailer X
Retailer X has been using the FacilitySource’s services--including the transaction center, scanning of invoices, paperless invoicing, program management, software, and store surveying—since October 2002.
"The upshot is that we’ve reduced costs & improved quality,"..."We’re also becoming more proactive now that the base transactional systems are running smoothly, plus we’ll be able to perform more capital projects to hopefully decrease our maintenance costs further."
-VP Facilities & Utilities for Retailer X
Results
The savings were immediate and substantial:
- In its first year using FacilitySource, Retailer X saw a cost reduction of $5.4 million. Over a two year period, costs were reduced more than $9 million.
- The average invoice dropped from $350 to $275, and the company processes about 90,000 work orders per year.
- Paperless invoicing the first year saved a conservative estimate of $900,000, which is about $10 per invoice.
- Staff has been reduced from 23 total coordinators and managers in the operations and maintenance department to one manager and six coordinators. "And we’re accomplishing more work and of a higher quality," commented the VP Facilities & Utilities for Retailer X
- In three years the company has seen a $14 million reduction in spend as well as a $2 million reduction in overhead, with a total savings of $16 million.
"We now have standards of service delivery that we did not have prior, costs are being reduced, root causes are being identified and corrected and we now have data on all stores to ensure we’re remodeling the right stores, and survey data on all the stores to understand the status of walls, floors equipment, etc."
-VP Facilities & Utilities for Retailer X
