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Organisational delivery, supply chain inflation and Environmental, Social & Governance (ESG) imperatives are the three key drivers shaping Facilities Management procurement strategies according to CBRE’s new Facilities Management Procurement Perspectives report.
Organisational delivery
Its findings show that outsourcing has become the dominant real estate delivery model, with 58 per cent of respondents stating that they outsource (strategic alliances with third party providers) FM services while a quarter out-task (use of firms for tactical roles such as janitorial, engineering, etc.) and the remaining 15 per cent self-perform in house.
Bob Bruning, Chief Procurement Officer, CBRE, said: “Outsourcing has gained popularity across many areas of business over the years, particularly following the pandemic, which saw corporations rapidly adjust their supply chain delivery models. Outsourcing providers gain greater access to a broader variety of innovations and benefit from supply chain efficiencies through consolidating significant spend. They also can better leverage their buying power and supplier relationships.”
Supply chain inflation
According to CBRE’s findings, supply chain inflation is top of mind for procurement teams with 70 per cent of respondents stating that inflationary pressure is having a high impact on their FM supply chain. Despite the impact, 75 per cent of respondents feel confident that they can identify and mitigate the risks. More than 90 per cent are using competitive sourcing or direct negotiation strategies to reduce costs.
The global pandemic, steep energy costs and labor and material shortages have shown just how volatile global supply chain can be, and as a result, procurement teams are facing considerable cost challenges. Currently, 77 per cent of work order delays are attributed to unavailable materials. Organisations often use a wide variety of strategies to manage pricing pressures such as competitive sourcing, service level optimisation and smart contracting.
ESG
CBRE’s report shows that ESG criteria are fast becoming a procurement imperative as organisations work under pressure to achieve decarbonisation targets. Approximately 72 per cent of companies surveyed have defined sustainability commitments while 88 per cent of respondents use scorecards with key performance indicators (KPI’s) to hold suppliers accountable for their ESG performance.
As ESG commitments continue to rise on the corporate agenda, CBRE has identified three trends driving increased commitment to sustainability. Those include employees who expect employers to be sustainable; tightening regulations and reporting requirements and investors that seek to safeguard their returns.
Survey respondents reported that they suspect that their real estate portfolio and related facilities management operations are major contributing factors to their company’s emissions. Going forward, organisations anticipate building supply chains that can withstand climate-related challenges, setting ambitious sustainability targets, effectively tracking and measuring results, and ensuring that leadership is investing in the ESG agenda.
Diversity, equity, and inclusion (DE&I) is also a growing ESG focus area for companies, with the most common supplier diversity spend target in the 5-10 per cent range. CBRE’s report shows that most respondents rated their progress on supplier diversity positively with 56 per cent monitoring the rate of inclusion in RFX (Request for X) events.
Bruning continued: “We are seeing many organisations expand their diversity goals each year to provide a new baseline for achieving and exceeding supplier diversity targets. As the supply chain environment continues to evolve, companies may have to increase investments or pay a premium to achieve their diversity objectives.”
CBRE’s inaugural report canvassed 40 corporations from across eight sectors including Life Sciences, Industrial & Logistics and Financial & Professional Services.
To read the full report, click here.
FMJ in conjunction with Grundon Waste Management is pleased to launch the 2023 waste management and recycling survey which examines the ways in which FMs approach their waste management responsibilities.
In this, the sixth year for the annual appraisal, we know there is a greater opportunity than ever for FMs to reappraise their waste and recycling operations and help their organisations meet the growing pressure to achieve ESG goals.
We want to learn how FMs have adapted to the legislative, economic and societal changes of the past year and how they plan to meet the latest waste and recycling targets.
In this survey we’ve posed a series of questions which include insights into FMs’ waste management strategy and targets, how they’re moving towards zero waste targets, and the importance of not just meeting compliance targets but also ESG goals.
The results of the 2023 survey will be published in FMJ magazine and form the basis of a white paper co-written by FMJ and the experts at Grundon on how to approach waste and recycling strategies.
To take part click here.
