3 Real-World Examples of How Your Facilities Are Adding Risk to Your Operations
The facilities management of plants, warehouses, and distribution centers (excluding machine maintenance) is only 2%-5% of an overall budget. Chief Operation Officers and other executives can overlook, or need to be made aware of, the inefficiencies created by their in-house or outsourced commercial cleaning team.
Unfortunately, executives and leadership do not take notice until it's too late – when there are disruptions of their service to customers and operations.
Here are 3 real-world examples that OpenWorks has seen in the last couple of years:
Real Example #1: A major food distributor serving national quick-service restaurants almost has its operations shut down by the FDA.
One of our clients, a food distributor that delivers high-quality fresh, frozen, and wholesale products to large restaurant chains, restaurants, hospitals and healthcare facilities, casinos, and hotels, almost had their entire operations disrupted.
The client left OpenWorks for another facilities management vendor offering a traditional cleaning service model. They offered our client a 20% discount, and the savings swayed our customer. However, the new traditional cleaning service vendor responded to a homogenous bid even though the distributor's locations provide distinctive needs.
The distributor's Los Angeles location does not have a large freezer or dairy and meat section, but the Phoenix location does. In addition, the sites have different business and traffic schedules since they are a 24/7food distributor.
The traditional cleaning provider took a blanket approach to keep their prices low, which is how they could offer a 20% discount. Standardization is essential so the food distributor can have consistent operating procedures, processes, and reporting in place. At the same time, they also require personal customized service to meet individual site requirements.
Each site has details and intricacies that need to be understood and addressed. The new janitorial company's services needed optimization for each site's specific nuances across all temperature zones.
Our client's distribution center has frozen food, dairy products, and meat. Cleanliness is a critical factor as sites like these are subject to FDA inspection consistently. Packaging violations, food leakage/seepage, and slip/trip and fall hazards can quickly shut down an operation not managed compliantly. And, OpenWorks understand that.
However, because of the changes in services with a new janitorial company, the entire food distributor's business in Phoenix and other locations were put at risk because they were failing FDA audits.
If the distributor did not realize what was happening, their high-profile customers including leading fast food chain restaurants, would have felt an impact.
In addition, a disruption like this would have had significant financial repercussions as customers would likely shift their business to competitors like US Foods or Sysco. As a result, the food distributor decided to return to OpenWorks as a customer.
Find out the differences between OpenWorks and a traditional commercial cleaning service.
Real Example #2: A third-party logistics company's service to a large international supplier of cough drops almost didn't occur.
Since 1989, one of the top six 3PLs in North America has set out to solve transportation and logistics challenges for its customers. While names and ownership have changed, the mission has always been the same: Delivering Confidence, Building Partners for Life.
But, one of their largest agency owners, which has more than 30 warehouse locations in several states across the country, was at risk of their operations being disrupted by both the OSHA and the FDA.
The 3PL needed a facilities management services provider to manage the local custodial service providers and communicate well with the company's employees and management team, ensuring complete compliance.
More importantly, the transportation agency needed a provider that wouldn't add any more stress than they were already facing. The COVID-19 pandemic introduced new restrictions and regulations, and these updates required a facilities management company to understand the specific needs.
The 3PL aimed to grow its pick and pack services for a large, international supplier of cough drops and confectionery products. All the cough drops get shipped to another facility and then distributed to other locations.
The entire process is regulated, and with FDA and OSHA restrictions, it's critical to be organized, compliant, and always ready for a white-glove check by inspectors. But, the 3PL's facilities services provider took a blanket approach putting the company's operations, brand, and customers at risk.
It turned out that there were many compliance issues across the warehouse. There were problems where workers operated forklifts, disorganization in the product storage area, and workers' offices, break rooms, and bathrooms. Unfortunately, after returning to work after the peak of the COVID-19 pandemic, they had returned to disorganization and a lack of cleanliness.
Employees who must work in a dirty and unkept environment lose their sense of safety. They start to believe that where they work and who they work for may need to be more organized. When anyone doesn't feel safe or organized, they cannot work up to their potential. The 3PL warehouse has to keep both its workers and government regulators happy. And they do that by going beyond standardization.
Read our case study on Jillamy, a 3PL that realized it had to go beyond standard service care to ensure its warehouse and office spaces were protected from exposure to COVID-19, flu outbreaks, and more.
Real-World Example #3: One of the most extensive rail and intermodal providers almost disrupted its operations by union issues.
Transportation is a lynchpin in our supply chains. When it has an issue, everyone feels it in their day-to-day experiences. One rail and intermodal provider that celebrates a rich history of almost 190 years and has a network encompassing 20,000 miles of track in 23 states, and parts of Canada, nearly had its entire operations disrupted. If this had happened, everyone in the world would have felt it.
This particular rail and intermodal provider was experiencing issues in its Syracuse location because its previous facilities management provider, a traditional commercial cleaning company, struggled with employee turnover.
The lack of a consistent team and quality governance led to an inconsistent clean, unhealthy, and unsafe environment. The railroad workers entering the facility were not happy with the state of things in the building. They refused to serve the Syracuse location and were ready to bring their Union in to help rectify the situation.
If Union reps were to get involved, high-profile repercussions like strikes, customer service delays, brand risk, and lost customers could occur. All would have significant profit and loss impacts.
The railroad would benefit from a facilities management provider model that has commercial cleaners who understood the high impacts of union involvement.
Drive Change In Your Facilities Before It's Too Late.
C-suite executives need to examine their supply chain facilities in-depth before disruptions happen due to FDA shutdowns, employee turnover, and union issues. Facilities are profit protection centers that have the power to speed up inventory turns, allow products to go to market faster, and ultimately strengthen your bottom line.
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