by Brianna Crandall — December 9, 2015—The Professional Retail Store Maintenance Association (PRSM), the authority on retail, multi-site facilities management, recently surveyed the retail industry to better understand current sourcing practices and their impact on multi-site retail, store maintenance operations.
The PRSM Association Strategic Retail Sourcing and Procurement Benchmarking Report collected information from 85 multi-site retail companies to analyze sourcing practices for retail facilities. The goal was to understand the sourcing practices retailers currently use, with the long-term goal of establishing industry sourcing standards. Some key findings include:
- More than 66% of retailers invite three to five suppliers to participate in request for proposals, while more than 30% secure proposals from five or more suppliers.
- 43% of retailers have stand-alone sourcing divisions for each department, and 36% use a single sourcing division for the entire organization.
- Facilities departments are always involved in maintenance sourcing decisions and provide input on equipment repair, maintenance and replacement. Finance and real estate influence capital improvement projects.
- Failure to meet service-level agreements triggers most searches for new suppliers.
- Two-thirds of retailers assess supplier company risk by checking financials and other factors.
- National suppliers are preferred for waste and energy management, fire controls, safety and pest control.
- Regional suppliers are most used for trades such as carpentry, plumbing, and handyman services.
- 96% of retailers have termination rights and required levels of insurance in service-level agreements.
Patricia Dameron, executive director, PRSM Association, commented:
PRSM members spend millions each year on products and services. Understanding the key trends in sourcing and identifying ways to improve the process and develop standards are critical to help our members reduce costs and better manage facilities budgets. This report will enable PRSM members to compare their processes to the industry standard and make important adjustments as needed.
PRSM’s 2015 Benchmarking Report: Strategic Retail Sourcing and Procurement is available for free download from the organization’s Web site.
PRSM Association benchmarking for the retail industry initiated in 2011 provides facilities professionals with data and insight into many aspects of store maintenance. Industry surveys have provided valuable metrics on retail work order management, HVAC systems, janitorial products, fleet management, services and other topics. Future reports will focus on other key areas of retail facilities maintenance.