In the current uncertain economic climate it is more important than ever for manufacturers to take a more strategic approach to buildings maintenance costs
From sprawling, hangar-style factories through to units scattered around industrial estates, through to small, compact workshops in or on the edge of town, Britain’s Original Equipment Manufacturer (OEM) built estate is vast and diverse.
Despite UK manufacturing nowadays being considerably smaller than in its heyday of the 1970s, Britain is still the 11th
largest manufacturing nation in the world, according to manufacturing body EEF.
And when it comes to cost pressures, the factors at play are, inevitably, going to vary from sector to sector, whether it’s plant and labour costs, the price of raw materials, or exchange rates. But one constant is the cost of maintenance, repair and operations (MRO) procurement, or the day-to-day purchasing of mechanical, plumbing and electrical spares, replacements and components, whether for keeping production lines running or in terms of ensuring buildings stay open, operating and functioning.
"Manufacturers are always under pressure to run efficiently, and maintaining and improving buildings is a challenge they all face"Chris Richards, Senior Policy Adviser, EEF
As Chris Richards, Senior Policy Adviser at EEF, points out: “Manufacturers are always under pressure to run efficiently and cost-effectively, and maintaining and improving buildings and machinery is a challenge they all face.
“As with any business, they need to look at the cost versus benefits involved when they decide what they are going to do – some maintenance is essential, but a lot comes under the ‘nice to have, but does it make financial sense?’ heading.”
For example, against the backdrop of business rates being revalued next year
, Richards points out the current business rates system effectively penalises businesses for making buildings improvements, because it increases the hypothetical rental value, thereby meaning companies have to pay higher rates.
“We believe improvements such as making buildings more energy-efficient should be stripped out of the system so that businesses are not penalised for this sort of work,” he contends.
Nevertheless, becoming “smarter” – more efficient and strategic – in your buildings maintenance MRO procurement can pay dividends. Keeping lights working, reducing energy use (electricity, heating, water but also often the air used in pneumatic equipment), managing air-conditioning, extraction or filtration systems – in all these areas the how, what, where and when you procure is vital.
Controlling maverick spending
As Brendan Free, Industry Sector Manager at RS, highlights: “In the current uncertain economic climate it is vital to be reducing ‘maverick’, uncontrolled and spot buying.
“Having a procurement strategy is about consolidating your spending with fewer suppliers, making the ordering process easier, perhaps by looking at eProcurement solutions, and by reducing the working capital sitting in your stores.
“At RS, for example, we stock half a million items, available the next day. Often we can get them to sites quicker than anyone else; often we can get a part to a site more quickly than the engineer who is trying to locate them in his storeroom,” he points out.
“It’s easier to make the case for keeping tight control on MRO spend for plant and other operationally critical machines, but it’s just as important to look at MRO spend on buildings. Many organisations have numerous, large buildings and over the course of a year spend significant amounts on maintaining these,” agrees Helen Alder, Head Of Knowledge at the Chartered Institute of Procurement and Supply.
"It's important to prioritise MRO requirements so that critical areas, which might affect your overall operations, can be serviced in a timely manner"Helen Alder, Head Of Knowledge, CIPS
“With buildings maintenance, it’s important to prioritise MRO requirements (either if you have an in-house facilities management team, or it’s outsourced) so that critical areas, whether that’s lighting, plumbing, air conditioning and so on, which might affect your overall operations, can be serviced in a timely manner.
“This comes down to working with suppliers to identify key MRO products and ensuring you have a list of key suppliers that will be able to provide parts as and when you need them,” she adds.