Shared Wisdom, Unique Success: A Cross-Industry Exploration of Data Innovation
Discover the power of data innovation at our panel discussion! Join industry leaders as they explore how data is shaping efficiency, customer engagement, and market leadership. Don't miss this unique opportunity!Watch the On-Demand Webinar
For big box retailers and CPG companies, facilities management is an ongoing worry— they know they need to keep the lights on, the temperature right, and their products fresh. If not, profits plummet and the customer experience suffers.
Whether you’re dealing with an inspection, installation, or maintenance issue, you’re only happy when you get high-quality service exactly when you need it. But that doesn’t always happen. Be aware that change is coming, and it’s in the form of AI.
AI is transforming the way companies work and engage with their clients. And for retailers and CPG companies, that engagement can include predictive maintenance and AI-generated work orders, for example. They are the type of technological innovations that will help lower your stress level, so you can rest assured your facility is being managed proactively and cost effectively.
Challenges in Facilities Management
The challenges for facilities management range from continuous up time in production facilities, HVAC system maintenance to the lighting and cleanliness of the sales floor. Dozens of concerns exist in maintaining an individual location and imagine how that number increases at multi-site facilities.
Despite the number of challenges, many obstacles have hampered the adoption of modern facilities management systems, including a lack of technology skills within the function, conflicting priorities for leadership, and a focus on continuous cost cutting. However, there are many ways to minimize facility operating costs; for example, installing efficient lighting fixtures and temperature controls to save on heating and air conditioning costs.
For companies with distributed operations including retailers and brands, facilities management can represent 10 to 25 percent of total indirect spending.
Facilities management can be a ripe target for efforts to reduce operating costs. During challenging economic times, companies trim these budgets and once the economic outlook improves, spending doesn’t return to previous levels. This pattern can lead to deteriorating conditions of buildings and equipment, potentially costing more overall.
Retail and CPG facility managers must also deal with increasingly complex vendor relationships. The volume of managing these many relationships can sometimes result in inaccuracies in reporting, payment delays, and untracked spend. Yet, modern technology can streamline facilities vendor-business management, and outsourcing the entire process to a third-party can help put the complexities of managing these relationships in the hands of experienced experts.
To Outsource or Insource
Retail and CPG companies have no shortage of options for optimizing facilities management expenditures. The global market for in-house and outsourced facilities management spend is estimated to reach $1.9 trillion by 2024. The outsourced market accounts for more than half of that total and has attracted a growing number of vendors with new service offerings. Outsourcing is a well-established strategy that’s on the rise thanks to an influx of vendors who claim to have the expertise and resources to help retailers streamline operations and reduce costs.
Before you outsource facility management to third parties, review your operating model and the appropriate mix of insourcing and outsourcing based on capability, cost, and coverage. According to McKinsey, retail is one of many industries that islooking to first optimize its operating model by balancing insourcing and outsourcing. If the benefits achieved by in-house management are not significant, some companies have opted to fully outsource facility management.
Embracing the Modern Landscape
Technology and innovation are inseparable in modern facility management. Innovative technology and integrated platforms can enable efficient facilities management and allow retailers and brands to proactively maintain aging infrastructures and prevent equipment or system failures, thus reducing the risk of lost inventory and unhappy customers.
How Integrated Facility Management Platforms Work
Integrated Facility Management (IFM) is an approach that consolidates all facility-related solutions and processes under a single platform. This approach centralizes the management of a company’s systems, service providers, and processes, and can lead to operational efficiencies, cost savings, and better use of data across a business.
IFM platforms include tools and services to support the equipment, security, and sustainability of buildings, landscapes, and infrastructures. When you add in AI and IoT, you get a platform that provides the backbone for facilities that are not only responsive but also predictive.
Michael Mendoza, Director of Service Transformation at Hitachi Solutions, expects that AI will bring about the most dramatic change yet for the field services and facilities management: “It’s no exaggeration to say that the advent of AI promises to completely redefine what is possible, offer groundbreaking new opportunities to delight customers, and differentiate and reinvent service delivery for every organization on the planet.”
In the retail sector, equipment downtime can be costly. Powered by AI and IoT, predictive maintenance can help retailers identify when machinery or equipment is likely to fail, allowing for proactive maintenance. Businesses are starting to realize that strategic maintenance of their physical assets can significantly impact their overall energy consumption and operational efficiency.
Walmart is a prime example of a corporation leveraging the power of AI and predictive maintenance for energy efficiency. The retail giant initiated a program to meticulously maintain store equipment, lighting, and refrigeration systems, resulting in a significant improvement in overall energy efficiency and a reduction in the company’s carbon footprint. IoT sensors predict when machinery is likely to fail or needs servicing, allowing for timely interventions and reducing prolonged downtimes.
And AI is being used to analyze temperature data and performance metrics, including refrigerated case temperatures, energy usage, and HVAC discharge and space temperatures, helping facility managers to react quickly and pinpoint potential cost savings.
Revolutionizing Service Operations with Hitachi Solutions
Retailers and brands that have traditionally kept facilities management on the backburner should move it to the heat, because it can reap a goldmine of savings.
When comparing field service management solutions, it’s essential to look for an integrated facility management system (or a vendor that uses one) that allows you to:
- Gain a 360-degree view of all assets and equipment across all production facilities and warehouses
- Monitor equipment performance in real time and flag abnormal behavior for predictive maintenance
- Administer proactive maintenance and repairs to ensure continuous uptime
- Use analytics to gain insight into equipment usage and performance over time
- Maintain detailed records of serialized equipment and equipment under warranty
- Streamline operations and costs with third-party service providers
At Hitachi Solutions, we recently worked with a national retail facilities management customer to fuse their unique functional needs with the power of Microsoft Dynamics 365’s Field Service platform. Advanced technologies like Machine Learning (ML) and IoT and intelligent automated workflows that allow customers to create work orders via a portal are driving new levels of operational efficiency for all the retail and CPG companies they work with.
Hitachi Solutions’ Extended Field Service Platform components offer capabilities built on D365 for Field Service designed to address high-value and high-demand customer scenarios, enable faster implementation, and lower costs. We’ve been helping companies optimize operations and elevate the customer experience for nearly two decades. Reach out today to learn more about our leading Microsoft capabilities and award-winning services.