The Leader Magazine

DEC 2017

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Chevron looks for new methods of facility management to keep competitive in the market by Anand Gadgil, Jason Hakes and Theodora Foster I n today's facility management market, change is essential in order to remain competitive. "Business as usual" places an organization at a disadvantage as improvements in processes and technology accelerate at an exponential rate each year, providing opportunities for increased financial savings. Developing the next generation of a facility-management model should support an increase in operations productivity, reduce customer- service response times, and provide scalability during periods of economic decline. The Chevron Business and Real Estate Services (CBRES) real estate portfolio was previously managed using the out-task facility management (FM) model. Functions that support building operation and services, such as landscaping, painting, plumbing, building engineering and janitorial services were out-tasked to nearly 90 different suppliers. Managing such a large number of contracts and service providers was inefficient and resulted in inconsistent service and vendor culture complications. Changes to the geographic portfolio in both domestic and global markets were slow to evolve using the out-task model because, without strategic partners to drive change, CBRES value was limited to simply replacing individual business unit management with CBRES management. The increased demand in facility space and service, and the drive to standardize processes, created the need for a new global sourcing model. This new model would include scalability, reliability and reduction in the number of contract service providers, plus opportunity for standardization with improved efficiency at a reduced cost. The new model also would provide the ability to increase the amount of work that is self-performed, as well as the ability to align service delivery and suppliers with modern trends in the real estate and facilities industry. t apping into expertise CBRES launched a sourcing initiative led by a seasoned facility manager, an initiative that focused on standardizing delivery of facility-managed services at CBRES-managed locations in North America with a long-term strategy to expand globally. The role of the experienced facility manager was critical during sourcing to establish credibility of the new process and to gain buy-in from all remaining facility managers. The sourcing team was presented with four dominant sourcing models: 1. Self-perform 2. Out-task (CBRES old model) 3. Bundled services 4. Integrated FM Based upon current business drivers and market conditions, the solution became apparent – move from tactical, out-tasked (single-service line) FM model to a sourced-category (multiple- service lines) strategic model using suppliers who can self-perform substantial portions of the work. The integrated FM (IFM) model was seen as the most economical, efficient and easiest to manage. However, as CBRES accumulated and analyzed data, it became clear that an IFM model contained gaps, including global scalability and a special complexity related to oil and gas sites (from refineries to commercial office space). Additionally, the IFM model hands too much control over to the supplier and would reduce our ability to manage our facilities. A move to bundled services or a fully IFM service would include a strategic integrated facilities management partnership capable of scaling labor and services quickly across the portfolio when opportunities arise or diminish. Both service models provide improved control over operational costs, support talent attraction and retention, and provide consistent quality portfolio maintenance and standardization while mitigating risk. Adopting one of these two models would provide a more strategic operational model that is capable of integrating several single lines of service into a seamless function that delivers greater value than the sum of its parts. Both models also provide high levels of service and decision criteria focused on maintaining standardized operational control over the portfolio. C bres transitions to bundled service Of the two models, bundled services provides the most efficient and cost-saving benefits of an integrated facility. The sourcing initiative resulted in the selection of two industry specialists – Sodexo and CBRE. Although both suppliers were leaders in delivering comprehensive facility maintenance and facility services, CBRE was selected to manage hard services and Sodexo to manage soft services. The decision to contract with two competitive companies was to create creative tension that would improve and support "out-of-box" synergies within F E A T U R E A R T I C L E 42 DECEMBER 2017 th E l E a DER

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