Integrating SME’s into the Supply Chain
September 28, 2018
Integrating small and medium-sized businesses (SME’s) into the facilities supply chain is a big challenge for both the public and private sectors. With public sector organisations all agreeing to spend at least 30% with SME’s, it is a challenge to engage with them as history has shown that public sector outsourcing is generally more favourable to larger providers.
One of the barriers to success is the increased management resources needed to manage multiple smaller regional contractors. With management resource already stretched, FM’s are fighting a losing battle. With little C-Suite influence and growing responsibilities across the wider workplace, do they have the time and support to integrate SME’s? Probably not is the answer.
But, is there another solution? Outsourcing to one company has been the preferred choice for many reasons. It is easier to deal with and pay only one company, that company can provide a full end to end management with FM’s responsibility only being auditing and signing off works. Outsourcing puts the majority, if not all risk on the outsourced contractor, and often it seems like the most cost-effective solution – but is all of that true?
No, in reality, you can lose control and visibility when outsourcing through TFM and most often than not, what is promised at the tender stage is not delivered throughout the contract. When chasing the unsustainable margins that were tendered, contractors are more likely to cut corners and underdeliver. As a lot of contractors use their own systems for self-reporting, it is often difficult for the client to get transparency and in turn, this can create an issue with trust.
Now we are not saying that all TFM contracts are bad, but a lot can be improved and through our experience the above outlines the thoughts and concerns of some clients that we work with and speak talk to regularly. On the flip side, integrating SME’s into the supply-chain on a direct contractual basis also has its barriers to success.
Both local and central government contracts can be sizable, often enough to put significant strain on an SME in both delivery and management of contracts. The scalability of such organisations can be a concern. Some SME’s don’t have the same quality business processes or CSR experience that more prominent, more established contractors do, and this can also be a put-off.
So, is there a better way to integrate SME’s into the supply-chain? In short, the answer is yes. How? Use an FM Integrator.
BIFM describe the Integrator as “a matured and improved version of the Managing Agent model. The Integrator sits between the client and supply chain providing business intelligence and an independent, impartial view on supplier performance, finance and cost control, workplace experience and FM compliance together with a strategic approach to the entire estate.
“The benefits include a single point of information and the ability to choose the best service partner for the job together with an increased strategic insight into the estate. This approach is being adopted by organisations with large, complex portfolios”.
An integrator provides independent asset and contract management using advances in technology and business intelligence to deliver FM services. As an independent management service, we can manage and audit a TFM contract, or more importantly integrate any number of specialist service providers to support facilities delivery. We offer the flexibility to choose the best possible solution while using one management resource.
We provide third-party technology to funnel all performance information through a centralised system, by removing self-reporting from contractors, we can monitor, audit and approve work in real-time. Working in real-time allows us to manage data and use business intelligence for benchmarking and trend analysis, which is proven to save clients an average of 30%.
Our integrated model is 100% client focussed, with no vested interest in the contract delivery we are free to create innovation, value and improved integration throughout the supply-chain. With SME’s set to miss out on £33.5bn worth of contracts by 2020, we offer a scalable solution that is proven to deliver results.
Please don’t hesitate to get in touch with Mark Taylor at email@example.com or 07518 444 838 to discuss the Integrator model and see how it could benefit your future FM strategy.
Link to Proactis blog on SME’s losing out on £35.5bn worth of contracts by 2020 – https://blog.tendersdirect.co.uk/2018/04/09/smes-to-miss-out-on-33-5bn-worth-of-government-contracts-by-2020/
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