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Hospitality business

Hospitality is all about great service, so when this client approached us, we knew we had to serve up a treat.

The Brief

Hospitality business

Our client was a successful hospitality business with over 200 branches in the UK. Beyond the obvious goods for resale, the single biggest cost to the business was maintenance of the property estate, therefore this was a key area of focus for the management team. We were asked to;

1

Test the current commercial terms versus the market

2

Review operating models and recommend areas for improvement

3

Provide a clear route map for transition to the new delivery model

Challenges

Understanding the constraints

Historically maintenance had proved difficult to control and the business had tried a number of suppliers and commercial models with limited success. Each time the client negotiated better terms with the suppliers, costs would keep on escalating. This meant that the operating business was facing a number of key challenges;

Maintaining the same customer experience within the same budget envelope, despite an ageing estate

Trying to understand the drivers behind cost with very limited data and central resources

Moving to a new way of working whilst maintaining service standards to the estate throughout the transition period

Outcomes

Results and Approach

The Insider team was able to support the client in reducing costs by 30% whilst maintaining current standards of supplier performance. This was achieved by;

30% Reduction in costs without reducing performance

Discovery

Securing quality data from the suppliers and analysing this thoroughly to understand key cost drivers

Alignment

Changing the commercial model so that the suppliers and the client were both incentivised to work towards a lower cost for maintenance

Monitor

Putting in place a data collection and reporting mechanism to provide the parties with unambiguous, robust information on which to make shared decisions

Stabilise

Formalising the new arrangements in a fixed term contract which locked down accountability on both sides

Inside Track

Minimising Impact

Cost is a function of both price and demand. Unless both sides of the equation are addressed properly, then lower prices do not necessarily lead to lower costs. In complex situations, such as facilities management, it is essential to ensure that these are dealt with in the commercial model and the subsequent contract. Insider’s team were successful in this project because;

Experience

Our consulting team consisted of former
board level operators from within
facilities management providers who were
able to offer a unique insight
into how to get the best out of suppliers

Factual Recommendations

The team took time to gather and analyse
the data so that our recommendations were
based in fact and not guesswork

Clarity

We were able to create a formal contract
which ensured everyone was clear on their
role and incentivised to deliver
lower FM costs

Featured insider

Jeremy Bowley

Jeremy is the Managing Partner of the business. Over the course of his career Jeremy has worked with over 50 organisations in sectors as diverse as retail, construction, hospitality, manufacturing, healthcare and not for profit.

Experience

Jeremy has worked with the following organisations

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