Supply chain woes and threats are dominating headlines, and while the focus often lands on fulfillment, it is important to prioritize the impacts on facilities and those who manage them. Facility management leaders regularly deal with risks and vulnerabilities exposed by shifting product demand, delayed freight, labor shortages and product disruptions.

While consumers have seen some return to normalcy, or at least stability, behind-the-scenes work at their favorite companies remains tumultuous. Supply chain pressures and uncertainty remain the norm even as economies and organizations leave pandemic efforts. The strain that FMs face can increase at any moment thanks to issues around material availability, staff safety, cost and slowing sales. Creating a plan to minimize these threats starts with understanding the health of the supply chain and building plans to improve it.

Start with an internal checkup

The weakest link in a supply chain may be the one closest to home.

Organizations must start supply chain reviews and management practices by evaluating current operations. Review company-owned inventory and look for areas of need or excess. Supply chain management may prioritize exterior elements, but do not neglect all the equipment, cleaners, tools and maintenance elements required to keep everything running smoothly. FMs must take more vocal ownership of these elements in the current climate.

Most companies in major markets are holding onto higher inventory levels because they predicted pandemic spending to continue unabated. Long-term storage costs, expensive warehouse leases and locations far from the core customer base all reduce the value companies can capture from goods sold.

Increases in storage, production and inventory reallocations across a supply chain come with increased demands on facilities and team leads. When revenues shrink and belts tighten, there is a risk that budgets may not fully account for increased internal demands. There is an argument for the inverse, too. Carriers are investing in networks and large brands that spend on facilities now to limit interruptions may be best positioned to capture customer attention next year.

For companies to strengthen their supply chain, their house must be in order. With inventory shifts, that means FM leads must take a more prominent role.

Pursue immediate needs and long-term goals

Internal reviews and checklists need validation for company-wide adoption. Supply chains, in particular, require guidance to drive efforts to resolve immediate needs and build toward growth objectives. Focus supply chain and facility investments on areas of importance and security.

There are no guideposts or guardrails here. Each operation and company needs a tailored approach, focusing on realistic interpretations of the market. For example, many thought leadership pieces will suggest that every organization invest in on-shoring or near-shoring as a solution to materials disruptions. Operational leaders, however, must look honestly to see if that is feasible for the materials in question. Then, it must be proven to meet long-term goals as these efforts take months and years to transition, all while the supply chain needs to be protected and enhanced.

Understanding and building reliable efforts here require detailed analysis, strong partnerships and the ability to look at multiyear growth through a realistic lens. Reviews and assessments are essential to this planning. Remember, calculating the total cost for elements like fulfillment should include opportunity costs and areas where partnerships harm valuation by impacting efforts, such as storage and facilities utilization.

Create a robust review process

Companies need internal groups or councils to regularly review supply chain partnerships, policies and procedures. Start by checking for the efficiency of operations as well as price and protection. Something as direct as shifting to a partner with lower shrinkage rates or better service guarantees can help ensure a company secures revenue and builds long-term value.

On the FM side, partnerships need to be able to perform based on a company’s unique supply chain. Warehouse and distribution centers should have reliable inbound manufacturers and carriers to manage outbound freight or deliveries.

Inbound shipments of goods such as corrugated cardboard boxes — a surprise supply chain constraint for many in 2022 — do not just rest in order management and fulfillment. They impact a company’s ability to manage and run operations. Adjusting for different sized boxes or receiving items from multiple suppliers and trailers cuts into energy management and yard management.

Look at the processes impacted by recent disruptions and watch for ripples. Determine if suppliers or supply chain partners have led to increased maintenance requests or repairs. Have their shifting demands changed the most common work orders? Is there a new need to outsource to keep pace?

Start with current supply chain links as the benchmark and seek ways to improve. Then, raise those benchmarks to meet growth plans. Ask about data sharing and support from partners to ensure tracking information is reliable and accurate across the chain. Compare the current mix of partnerships and agreements for facilities with industry standards and common service-level agreements.

Add links before removals

One thing that can strengthen a chain or fence is increasing the number of links connecting to any point. Adding links, such as a new supplier or regional carrier, helps mitigate a variety of risks. There is danger in simply replacing points in a supply chain because it can take time for a weak link to be spotted.

FMs must proactively work to reduce risk to employees across a broad set of tasks and situations. The same care and overlapping protections that these efforts receive should go into managing and improving internal supply chains.

FM assets are getting more expensive and taking longer to arrive. Some companies face a 10 percent increase in asset cost and a 40 percent longer lead time. The heart palpitations this causes can make it compelling to replace any vendor that experiences ongoing stockouts. However, let caution be a healthy guide.

The retail market shows that few companies have understood or predicted pandemic demand. Giants like Nike are sitting on mountains of inventory, while individual or local suppliers have yet to catch up. Pursue redundancies, backups and additional outlets to improve the strength and reliability of the supply chain without making hasty cuts. Diversification is a strength to consider.

When a supplier is underdelivering for technicians in facilities or in the field, start with a review of existing agreements. Negotiate to cut surcharges and mark-ups on services and repairs. Note when elements are out of compliance or do not meet service-level agreements and push back.

Relationships with suppliers and partners also affect the success and health of the supply chain. Instead of being willing to cut quickly, consider where relationships can be improved and secure what is needed from an existing partner. Sometimes reducing work or getting costs down to parity with service delivery can open a budget enough for additional partners or suppliers to add strength and stability.

Build a cycle of iteration and improvement

Many of today’s supply chain issues come from process stagnation. Things ran smoothly for years, and companies sought marginal increases in competitiveness or accuracy. It was a slow-moving process that most thought was solved. That mistake cost companies around the world dearly.

Supply chains are living, moving, thinking organisms. They react to a multitude of market forces and pressures, shying away from harm and seeking to fill gaps. The only way to determine how a supply chain will fare against the next big concern is to stress test it, build improvements to address issues and repeat that cycle.

FMs and their facilities bear the brunt of those impacts. The bullwhip effect puts increased strain on teams and the equipment they use. It can cause more accidents and increase repair and maintenance demands. Scaling up talent means more training and often more wear and tear. Many companies faced increased waste and recycling issues as they worked to scale up operations. That can lead to an unnecessary increase in hauler services or mistakes such as using the wrong bins and containers so loads are smaller than they should be.

There is a lot to track and test. Robust FM efforts should stay on top of developments and look for issues. Iterate and improve. The cycle is how leaders legitimately turn advice and opportunities into SOPs for the supply chain. Some changes may come quickly while others are slow and involve large-scale discussions and shifts. The biggest threat throughout, however, is standing still.

Supply chains are a stakeholder’s game

FMs tend to work with many different groups and internal leaders throughout the day. However, if a company views supply chain management as an external process, there is a chance FM leads are not invited to the table for supply chain decisions. Put the skills needed to be a strong manager to work and secure a seat at the table with a clear ask.

The overall health of a company’s supply chain will always depend on that company’s workforce being safe and healthy. Both improve efficiency and ensure project leads make smart decisions. FMs impact this directly with janitorial teams while also creating a positive environment through relationships with waste haulers and suppliers.

And do not forget to push if company goals align with FM roles. Supply chains are getting greener, and many companies are creating sustainability goals and requirements that cover the entire chain. This always includes internal operations, for which FMs own the core energy, waste, recycling and related elements. That alone always demands a seat at the supply chain table.