PRSM 2014 Trends Report - (Page 14)

MAINTENANCE ON THE MENU Kevin Herrmann of The Fresh Market on the special maintenance challenges of food retailers TRENDING: VENDOR MANAGEMENT Top 10 Purchasing Changes in 10 Years 1. Technology proliferated. Today, eProcurement and eSourcing are two of the most useful practices in purchasing. Ten years ago, those terms were unheard of. 2. Center-led procurement arrived. In 1998, even top purchasing departments processed purchase orders. Today, purchasing departments aim to centralize the supplier selection process, not transactions, which are delegated to end users or outsourced. 3. Purchasing grabbed more spend. When purchasing departments deliver results, management seeks more spend that Purchasing can positively impact. Once sourced by other departments, categories like fleet management, benefits, and travel services are now sourced by Purchasing. 4. Social responsibility became a top priority. Whether for philanthropy or to avoid media scandals, management counts on Purchasing more than ever to buy from diverse suppliers, make environmentally-conscious decisions, and do business ethically. 5. Measurement was mandated. With the potential of smart purchasing widely known, senior management more strictly holds their purchasing departments accountable for results. W hen Herbert Hoover’s 1928 presidential campaign promised “a chicken in every pot and a car in every garage,” he couldn’t have foreseen that Americans eventually would use those cars to drive to retail locations like The Fresh Market and buy delicious, fully cooked rotisserie chickens that require no preparation and can feed a family in no time. Call it a sign of American progress. For Greensboro, N.C.-based The Fresh Market, which has about 140 stores scattered across 30 states, ready-made food items like rotisserie chickens drive revenue and offer busy consumers a level of convenience that builds brand loyalty. But they also pose special challenges for equipment and facilities maintenance and increase the importance of developing strong relationships with contractors, according to Kevin Herrmann, Manager of Maintenance at The Fresh Market. 6. 7. 8. 9. 10. The use of purchasing metrics and dashboards are now commonplace. Strategic sourcing went DIY. In the 90s, strategic sourcing was done mostly by consulting firms hired to help companies reduce spend. Today, many companies have their own refined and documented in-house strategic sourcing processes. Supplier roles expanded. In 1998, there was talk about “partnering” with suppliers. Today, there’s action. Top purchasing departments actively develop their suppliers and look to the supply base for ideas, better performance, and innovation. Global sourcing went mainstream. Ten years ago, only the progressive companies were searching abroad for suppliers. Now, in some countries, it is difficult to find products manufactured domestically. The CPO position got adopted. This past year alone, I’ve encountered an unprecedented number of folks with the title “Chief Procurement Officer.” The supply chain was recognized. In the last decade, companies more closely analyzed the way material flows into, through, and out of the organization. This “supply chain” focus has those who once just placed orders now responsible for inventory, warehousing, outbound logistics, and distribution. To manage its expanding requirements Hermann began experimenting with different FM strategies. “In grocery and c-stores, if an oven or another piece of cooking equipment goes down and you’re not able to provide some of your highest-selling items, such as rotisserie chickens in our deli, that’s very critical for us because we’re losing bottom-line dollars every hour,” Herrmann said. “It’s very critical for us to get that repaired quickly. In stores like ours and in c-stores—which have almost become restaurants with all the cooking they have going on—there are so many more critical areas than when you’re running regular retail.” Building Vendor Relationships To ensure that The Fresh Market gets a good performance from each maintenance vendor, and to build relationships with those vendors, Herrmann said his department conducts at least one review with each vendor every year. The review takes 14 I PROFESSIONAL RETAIL STORE MAINTENANCE I place either in-person or over the phone, and with the chain’s bigger, national contractors, reviews are scheduled more often, sometimes quarterly. The reviews offer him a chance to address small issues before they become larger and perhaps even require that he seek out a new contractor. Investing the time into building relationships with vendors often pays off in the form of longlasting partnerships and strong vendor performance, Herrmann said. “We want to make sure that we continue to move forward as partners because we view all our service providers as service partners,” he said. “We try really hard to work on the relationship. I’ve been in situations in the past where a vendor doesn’t perform in some way, the store gets mad, and then you go off looking for another vendor. We’re not looking to do that. We’re looking to correct issues.” Herrmann said one of his stores recently had a fried fuse that knocked out

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PRSM 2014 Trends Report