You manage a highly successful nationwide restaurant chain with over 200 restaurants. Sales are booming, customers are happy, your restaurant is getting a ton of positive recognition and then, without warning, you have to shut it all down! A catastrophic pandemic has engulfed the world halting economic activity. As managers and executives, it is imperative that you take control of your spending in order to remain competitive in this new world. Performing an asset inventorying & tagging on all of your major assets and mechanical equipment is crucial to achieving this goal.
There are several reasons why you should act now. With stores closed, now is the time to send in a trained and skilled partner to perform inventorying & tagging with minimal disturbance to your customers. Utilizing a Computerized Maintenance Management System (CMMS) with fresh, valid data will unlock hidden cost saving potential with the newly inventoried data which is described in detail below. In addition, as revenue inevitably declines this year due to mandated shutdowns, the savings on the capital expense side of your budget will be crucial to maintaining profitability.
How does Asset Inventorying & Tagging Work?
Before we get into the benefits, it is important to understand how inventorying & tagging works. An asset inventorying & tagging company, such as Insparisk LLC, would work with your management to develop the specific asset types that you would like to inventory. For a typical restaurant, this includes all of the refrigeration, cooking, mechanical and HVAC equipment. Each one of these asset types is broken down into further subtypes to allow for greater detail. Data collected on each asset includes, but is not limited to: asset type, make, model, serial, location, photographs and a condition assessment. Typical asset tags are either polycarbonate for internal assets or aluminum for external assets. Both contain a strong adhesive that should last beyond the life span of the asset. Tags can be customized but usually include a QR code and your company logo. A pilot would be performed and a playbook would be created to ensure consistency across the entire book of business both in terms of the asset types that are inventoried and the placement of the tags. Once all restaurants or stores are finished, this fresh, valid e-data would be seamlessly imported into a CMMS. After a small amount of CMMS training, your employees are ready to begin placing work orders and management can start analyzing data.
Why Asset Inventory & Tag
When you have fresh, reliable data you can significantly improve your operating cost and time to respond to issues by ensuring you can get the right service/solution provider to address your needs the first time. Benefits include reduced repair and installation costs, longer asset life and increased uptime, reduced operating costs, reduced employee labor costs, identification of potential liabilities, work order management, predictive analytics and capital planning. It is not unrealistic to assume that local managers who feel the pressure to keep a restaurant or store operating during peak hours will predictably pay more for service if this ensures that they will not get stuck with an inoperative asset. For instance, if the cooling system is failing on a hot summer day, the local manager is likely to overpay if they feel that the repair person will arrive and fix the problem. It is not recommended to skimp on service and risk having a restaurant or store full of irate customers however centrally managing this process will lead to more prudent decision making.
Besides the equipment data that is collected, inventorying usually includes a light condition assessment of your assets. This process usually leads to the discovery of unsafe conditions that should be rectified immediately. The assets are identified as high risk with photo documentation.
Computerized Maintenance Management System (CMMS)
During the inventorying & tagging process, it is crucial to reinvigorate an existing system or partner with a CMMS provider or technology driven service aggregator to allow for work order management and data analysis across time. For example, if an asset is inoperative, the employee would simply pull up the CMMS on their phone and scan the QR code on the asset tag for the defective asset. At this point, a work order would be placed to the relevant vendor. When the vendor arrives, they would also have access to the CMMS where they can view prior service history as well as any PDF manuals on the equipment. This should decrease the repair time and repair cost. The vendor would be expected to update the CMMS by entering a description of the defect and any repairs performed. The vendors invoice would be tied to this work order to track spend. When the repair is completed and work order closed out, the data would be available for analysis. As more and more time passes, management would have a treasure trove of data worth analyzing to pinpoint any pressure points across your business. Maybe there is one store that is inexplicably spending much more than average on their assets or maybe there is one specific asset make and model that is bleeding red. Imagine what you could do with this information and how you can proactively make changes.
Suppliers & Vendors
You will also be in a much stronger position as you negotiate terms with suppliers and service vendors. For instance, instead of purchasing assets locally on a case by case scenario, armed with the data on how many pieces of equipment you own or plan to purchase from this supplier, you should be able to negotiate a lower rate. The same theory applies for service contracts. Taking a central approach to service besides the typical local approach you should be able to streamline with a few strategic partners across the country thus increasing your leverage and reducing your cost.
Predictive Analytics & Capital Planning
Besides the low hanging fruit mentioned in this article, there are many more opportunities to extract value from the data. A few of these are predictive analytics and capital planning. Predictive analytics allows a manager to reliably estimate when a piece of equipment may fail before the failure occurs. With this information, one could proactively shop for the best price on a replacement or repair before the replacement or repair is needed. Once the equipment fails, your leverage to bargain is greatly diminished. Another way to leverage a CMMS is capital planning which allows you to project future capital expenditures using life cycle and repair algorithms. Having capital expenses modeled into the future will be a tremendous value for any financing that you may need. A lender will feel more comfortable knowing that one your biggest expense line items is reliably estimated.
The Coronavirus has pushed us all to question what we consider to be normal and how we operate our businesses. Strong leaders see crisis as opportunities. We now have the time to reset our lives and reprioritize how we interact with people and how we operate our businesses. Asset inventorying & tagging is one of many ways that will allow us to thrive in a post COVID world.
About the Author
Vincent Caputo is currently the COO at Insparisk LLC where he works with large retail outlets and restaurant chains to standardize and develop best practices for asset inventorying and tagging.
Vincent earned his Bachelor’s Degree in Business from Baruch College in New York City. He currently holds active National Board and NYC Oil Burner Installer licenses.