Taking Over a New Facility? Identify Areas of Opportunity for Enhanced NOI
6 MIN. READ
Many factors go into the sale of a new building, so performing your due diligence is critical. With the right approach, new properties can increase the NOI for your portfolio. As a seasoned facility manager, you know this is the time when you can make a difference and separate the wheat from the chaff.
Take into account hidden opportunities as well as source to pay solutions like Raiven's (formerly Qmerit's) to improve purchasing decisions at the new site, and discover ways to improve performance, efficiency and savings.
Look at your take-over checklist
The takeover process can be time-consuming, but do not take shortcuts. This is not the time to cut corners, so you just have to be patient. As you get your list together and review items like site condition, rent rolls and environmental surveys, be prepared to dig deeper and examine other areas that can save you money.
There are untapped areas that can provide you with generous savings, and these overlooked items are hiding in plain sight, waiting for you to exploit.
Discover hidden gems
After buying your new building, uncover those hidden gems that will save you money, such as:
Examine the MRO purchase history of the new building and look for issues. Compare these to your high-performing properties that are using source to pay solutions already. Contrasting the properties will highlight areas that you can improve.
In fact, you may discover that there was no purchasing program at all, no approval process for suppliers or no executed contracts in place - all of which is critical information to know.
Expose abnormal usage patterns
During this early period, look for purchase patterns in the records. Look for spikes and lows.
Do you notice random spending patterns from several different suppliers? Are there certain times of the year where spending increases? Figure out whether the procurement department keeps organized records for purchases too.
What about purchases on websites like Amazon? This could indicate ingrained habits of rogue spending that you will want to address immediately.
Audit the buying process and authority
During your discovery period, it is essential to understand who and how the previous owners and operators implemented procurement. Knowing which department or individuals were in charge of purchasing will expose opportunities for enhancement.
This is a chance to introduce a centralized purchasing system to optimize procurement. Combine orders and suppliers, negotiate the best pricing and make sure that suppliers in your network are compliant. Centralize your buying, and you will have better control over the entire process.
Enlist select individuals or a single department to make all the purchasing decisions for your company. The result will be better efficiency and more savings.
Aggregate and consolidate suppliers
Poorly run facilities tend to have loose supplier management policies. This means that there are too many suppliers and vendors in the network, which makes it difficult to manage.
Raiven's source to pay solution reduces and approves suppliers, making it easier to track and validate their performance all on a seamless digital platform. This is the time to introduce new policies and systems so you can begin to organize and save.
Enforcing buyer compliance
Taking over new facilities often means acquiring the team members from the new building. This is a great opportunity to enforce buyer compliance.
Old habits die hard, and employees will want to fall into their old buying practices (which include rogue spending). Nip this in the bud, and explain how much money can be saved.
Use Raiven browser extension and you will end rogue spending. Your purchasing team can use this solution to ensure that they are getting the best pricing when they shop on suppliers' websites.
Tapping into these opportunities can improve your NOI. Do not overlook these items. They tend to hide in plain sight.
Raiven’s source to pay solution
Source to pay is part of a good buying process that starts with identifying, negotiating and contracting with approved suppliers and finalizing payment for the goods provided. Introduce this system when you take over a property, and you will see immediate benefits.
Bring this solution into your new property to improve efficiency, save time and save money. It is the perfect solution at a great time.
Start off the new facility on the right foot, establish your best buying practices upfront and explain the reasons behind this process. Your team will appreciate the direct approach and standard policies, making matters both more uniform and easier to abide by.
Remember, Raiven has the tools you need to improve your new property, and we can help you save money in the process. Our solutions will work seamlessly in the background to end rogue spending, consolidate suppliers and ensure compliance. Find out how easy it is to introduce these systems in your business. Reach out today for more information.