Sizing Up Your Suppliers
Should you choose a large, national provider for your maintenance needs, or a small, local operation?
By Matt Alderton
When you’re sick, there are many things that can influence whether you get healthy, and how quickly. For example, your recovery hinges on whether you eat the right diet, whether you get enough rest and whether you receive the right medicine at the right dosage.
At the end of the day, however, all of that depends on just one thing: your doctor. Unless your physician possesses the right combination of education, experience and skills to make the correct diagnosis and prescribe the proper treatment, your illness is bound to get worse, not better.
What’s true of your body also is true of your facilities. When the buildings they manage have problems, FMs’ ability to fix them depends largely on the quality of the Suppliers they choose to service them, said Krystal Vasquez, ProFM, CRFP, Customer Integration and Support Manager at FM services firm Chain Store Maintenance Inc.
“Aligning yourself with the right provider is an incredibly important part of reaching yearly FM goals,” Vasquez said. “Choosing the wrong provider can wreak havoc on your budget as well as create strife with the demand organization. It’s crucial to choose a provider that understands your needs and expectations and has the capabilities to meet and exceed them.”
Rick Sung, Vice President of Customer Solutions at FM services firm NEST, agreed. “You’re only as good as your weakest provider,” he said. “For me, it’s about the customer experience and speed of delivery. If you have a clogged toilet, or if your store is too hot because one of your air-conditioning units goes down, that has a major impact on the customer and on your brand reputation. An IFM solution can find the right providers to get the job done quickly with a high-quality result. And if the first option isn’t available, we can find other options in our network.”
For most FMs, Supplier selection boils down to a single critical decision: Should you partner with a large service provider that has a national footprint, or with a smaller service provider that has a local or regional focus?
It’s not black and white. Instead of making the “right” decision, FMs should focus on making the “best” decision for their business based on its unique needs.
Large Providers Offer Breadth, Convenience
The greatest advantage that national service providers have over their local and regional competitors is their size, Vasquez and Sung agreed. Because they often span multiple trades and multiple states, FMs can receive more services in more locations while investing less time in supplier management.
“National service providers offer broad coverage for a wide range of trades while offering the end user the consistency of dealing with the same people,” Vasquez explained. “Some of the pros include high-level reporting, elimination of excessive travel fees, one-stop shopping for multiple trades and the ability to adhere to the requirements needed to work through computerized maintenance management system (CMMS) platforms.”
“With regionals and local, you’re going to have to deal with multiple entities,” Sung added. “But with nationals, you only have to deal with one account relationship manager to support all your locations. So, it’s an easier path.”
Small Providers Offer Unique Skills, Service
Clearly, large providers have a lot to offer. But bigger isn’t always better. Because they act as an added layer between you and the local technician, for example, the account relationship manager also can be a disadvantage. Plus, their size means national providers may have larger overhead — and, therefore, higher costs.
And then there’s customer service. “Large nationals make their revenue by servicing other large national organizations,” Sung said. “If you’re a boutique company with 50 locations instead of 500 or 5,000, you’re probably going to get lost in the shuffle. That’s not wrong. It’s just the reality.”
Therein lies the strength of local and regional providers. “To a local or regional company, you’re not just a ticket,” Sung continued. “They live in the areas they serve, so they have civic commitments to them. That means they’re a little more pliable, and often are willing to go that little extra mile.”
Smaller providers might also have more unique skill sets and more competitive prices. “Local providers offer coverage of specific trades to specific areas,” Vasquez said. “The pros of working with a local provider are direct conversations between the FM and the technician onsite doing the work and the removal of the markup paid to a national provider.”
And yet, the cost comparison isn’t always cut and dry. Although national providers often charge a markup, they also have better buying power with which to negotiate lower prices from subcontractors. “A national provider has the ability to offer the local contractor locations for all of their clients as leverage to secure the best possible pricing,” Vasquez explained.
Whether you opt for big or small, national or local, your choice of Suppliers should ultimately be based on four main criteria, according to Vasquez: response, communication, competitive pricing and quality of work.
“When choosing a provider, FMs often choose based off of one criteria or another,” she said. “But the best choices are based on multiple factors. If you have a provider that can deliver all four of those, then you have found a great fit.”
You also must consider your own resources — whether you have appropriate staff or technology to manage numerous providers, for example — as well as alignment with organizational goals, like diversity and sustainability.
Finally, you should make decisions in pencil, not in pen. Which is to say: You’ve got to keep tabs on the providers you select, continuously make sure they’re meeting your expectations and be willing to make changes if they aren’t.
“You need to establish key performance indicators (KPIs) to determine if what you expect from a financial level and from a service level matches up with what’s really happening in the field,” Sung said. “Is the field satisfied with the work that’s being performed?”
“The key to a successful relationship — whether you go local or national — is communication,” Vazquez agreed. “It is important to communicate from the very beginning what the needs, expectations, goals and preferences are to have a healthy relationship that works for all.”