Facility Management in Agro-Industrial Company - Case Study Example

Facility management in Agro-industrial Company University Student Id Course Abstract The report is about facility management in Agro-industrial Company where the ways the company can improve facility management are discussed. Facility management that is effective significantly contributes to the successfulness of an organization. Within a corporate level, a facility management which is effective leads to delivery of strategic objectives. The different outsourcing methods are explored with the aim of investigating the best outsourcing method that can be employed by Agro-industrial Company. The outsourcing methods are discussed where both advantages and disadvantages are provided to help in making the best choice for the company. The recommendations that can help in improving the improving the facility management in Agro-industrial Company are provided in the report. Table of Contents Abstract 2 Introduction 3 Discussions 3 Comparing in-house and outsourcing facilities management 3 Outsourcing facilities management 4 In-house facilities management 5 The decision framework for outsourcing 7 Motivations for outsourcing 7 Benefits expected from outsourcing 8 The risks associated with outsourcing 8 The service provisions options available 9 Managing agent 9 Managing contractor 10 Total facilities management 11 Recommendations 12 Conclusion 13 References 14 Introduction Facility management refers to the integration process that takes place in an organization which aims at maintaining as well as developing the agreed services. The principal purpose of the facility management is to improve the efficiency and also the effectiveness of the basic activities of an organization. The aspect of facility management comprises of the multi-disciplinary related activities which are found within the environment of an organization and usually affect the individuals found in that organization (Calde, Goodwin, and Reimann, 2002). Besides, facility management that is effective creates a working environment which is safe. The report investigates facility management aspects of Agro-industrial Company with the aim of exploring the various aspects related to management of facilities in organizations. Discussions The facility management in Agro-industrial Company is unique due to the nature of the products handled. The facility management of the outsourcing services does not only relieve headaches which are not necessary but also it assists in the reduction of expenses (Buabeng, et al. 2007). Significantly, the secret of success in an organization is by focusing as well as ensuring good performance in the primary activities. Furthermore, in a situation of deciding which ways are best for staffing, the executive of the facility management are required to mainly focus on looking for the necessary skills rather than achieving cost savings for a short-term. Comparing in-house and outsourcing facilities management The aspect of outsourcing unlike out-tasking revolves around turning over management completion as well as the maintenance of an operation by an individual who is found outside the given organization. Moreover, the contract for the facility management of an outsourced operation is usually signed to function for more than four years. On the other side, out-tasking usually involves maintenance of technical competency in overall, and also making use of the special services found outside an organization so as to supplement the capabilities of the in-house. For instance, some of the in-house capabilities include; the workforce and also the technical expertise (Ekşioğlu, Romeijn, and Pardalos, 2006). Also, the aspect of outsourcing mostly aims at obtaining either products or even services from the outside instead of letting them be acquired from the in-house resources. However, when an organization is attempting to outsource, it is important to make sure that its objectives, as well as its long-term goals, have been achieved. Therefore, the aspect of outsourcing is a kind of privatization whereby an institution contracts an individual external organization so that it can provide services which are more appropriate. Moreover, there are always two options which are considered when it comes to making a decision whether to outsource or not. One of the options is that an organization decides whether to retain the in-house services or outsource (Jensen, et al. 2002). The second option is that an organization decides whether to outsource particular services or to retain some certain in-house services. Outsourcing facilities management Outsourcing entails contracting out support services through appointing outside contractors who are taken responsible for the work related to maintenance. It is trusted to deliver services that are standardized and of high quality (Mudrak, van and Wubben, 2005). Outsourcing essentially offers benefits to the organization of an extensive range that can include access to quality, cost reduction, flexibility in responding to change, product diversification, and opportunity for focusing on core competencies. Advantages 1. Outsourcing helps in availing more time necessary for Agro-industrial Company to concentrate on the core businesses. 2. It is important to Agro-industrial Company in providing the necessary access to expert, professional and services of high quality. 3. Outsourcing is crucial to operations of Agro-industrial Company in increasing productivity and efficiency in businesses 4. Outsourcing is critical in saving time, human resources, efforts, training costs, and operating costs in Agro-industrial Company. Disadvantages 1. The confidential information of the Agro-industrial Company can be revealed to the service provider hence posing a threat to confidentiality and security. 2. Outsourcing can increase the hidden costs to Agro-industrial Company that can include legal costs. 3. The service provider might lack the necessary devotion because of dealing with various companies. In-house facilities management In-house refers to the maintenance team which is usually appointed by an organization itself and whose function is to maintain the duties of that organization. It utilizes its workers in its process of keeping its business activities such as the works of cleaning and even the work of maintaining duties (Gerszberg, et al. 2002). In-house is geared towards ensuring that there is flexibility in its operations, by maintaining those operations in-house. The maintenance team which is usually responsible for the minor works and also for the daily activities makes use of its staff as well as resources. Advantages 1. Agro-industrial Company can conduct duties by its own, hence leading to better performance as compared to the employees from the outsourcing drive who in most cases make decisions depending on how those decisions will have an impact on the employers. 2. The results which are usually acquired from the financial analysis of long-term in Agro-industrial Company support in-house activities rather than the outsourcing drive. 3. In the case of in-housing, the workers in Agro-industrial Company are greatly improved, and at the same time, the needs of customers are usually satisfied. 4. The aspect of in-housing provides Agro-industrial Company with the chance to improve their individuals instead of employing outside workers, and also it establishes career prospects. Disadvantages 1. In a situation when a scope is defined poorly, it leads to various management problems of the services which require a high cost of supervision hence causing dissatisfaction of the customers. 2. Without proper delegation of duties in Agro-industrial Company, it may be quite hard to measure the level of performance of the personnel in the in-house. The decision framework for outsourcing Nutt (2000) defined the term outsourcing as a standard practice which is conducted by both public organization and the private organizations too and is usually the main feature of any business strategy. Therefore, as a result of widespread practices of outsourcing it has been the major topic in this literature hence, there are a reasonable number of reasons as to why researchers have initiated the aspect of outsourcing. Moreover, the majority of the organizations usually expect to accrue maximum benefits from successful outsourcing (Gilleard and Wong, 2004). In addition, there is a lot of outsourcing literature whereby motivators and also the decision factors are presented even though the relationships in this study have not been investigated. Motivations for outsourcing There are usually three main divisions of motivation for the aspect of outsourcing are; the politics, cost, and the strategy. Moreover, the category of cost and also the category of strategy are commonly used by the private organizations as their outsourcing drive, whereas the political category is mainly used as the outsourcing drive by the public organizations. Cost-driven outsourcing During the time of outsourcing, the cost can arise in times when the cost of suppliers are relatively low to the extent that even the overhead costs and the transactions costs are added, the suppliers are still willing to deliver their services at a lower price. The strategy-driven outsourcing Currently, the major outsourcing drives seem to look as if they are shifting from the cost category towards the strategic category which comprises of the flexibility strategy and also the competency since the strategic issues can improve the performance of the business on various dimensions. Politically driven outsourcing There are various reasons for the public institutions to behave in a different way from the private organization hence they have varying motivators to outsourcing. The motivators are usually more social related than economic. Benefits expected from outsourcing The drastic development of outsourcing drive usually suggests that both the private institutions as well as the public organizations always have expectations of accruing benefits from the aspect of outsourcing. Therefore, various organizations under different situations in most cases have high expectations of benefiting by using the outsourcing drive. The risks associated with outsourcing Under this study, some risks which are related to the outsourcing drives are usually discussed. The aspect of outsourcing is a current tool which is used by managers as well as suppliers in ensuring that there is better performance in an organization to draw a good impression concerning it. However, the failures of the outsourcing drive result from the lack of methodology for guiding managers. The service provisions options available Agro-industrial Company has numerous types of facilities management service provision that can be employed. Despite the fact that the traditional model is still common, technological changes have resulted in different ways of managing services. There are three primary types of facilities management services that Agro-industrial Company can make use in the service provision. The options available for the company in service provision include managing contractors, total facilities management, and managing agent (Lai and Daniels, 2004). They usually range from the external individuals for managing the employees through the use of appointed contractor responsible for managing the service providers. The facilities can also be managed by an external entity that can be taken responsible for offering single point services. The three options available to the company for service provision can be selected depending on the ability of the option to help in achieving the set objectives. The various types of facilities management have differing impact on the operations of the company hence the management can make a choice of the options that best suits the organization. However, there are varying contracting options that include all services with one contractor or even single service with many suppliers (Vilutienė and Zavadskas, 2003). Agro-industrial Company can select an option that can help in providing and delivering a range of services by sub-contracting or even directly with the emphasis mainly on the ability of management. Managing agent The managing agent approach in service provision is mainly employed the moment the company is willing and able to retain the employees but lacks the expertise necessary. The lack of skills and expertise can make the organization take advantage of managing agent to ensure efficiency. Agro-industrial Company can then bring in an external organization that can be held responsible for managing facilities through appointing an agent for managing the facilities. The use of managing agent is said to offer flexibility in the process of managing facilities where can be combined with the possible contracts that can be best suitable. The managing agent approach avoids the obstacles that might be experienced the moment the services are part outsourced and part in-house. The role of managing agent attracts some special significance as the company makes use of expertise where exercise judgment can be possible in making the best choice between outsourced and in-house service provision. The use of expertise in the process of making vital decisions can ensure maintenance of neutral perspective and guarantee quality in the service provision (Chotipanich, 2004). Considering the nature of the services the managing agents are not attached in any way to financial interests. As a result, the managing agents can then maintain neutrality as they play the advisory role in the situations where other people might not be qualified. Managing contractor Agro-industrial Company can also make use of a managing contractor where this approach involves a contract between the contractor who is appointed and the client organization. Sub-contractors can also be used where they are usually under the managing contractor but with no contractual relationship with the company. Therefore, the organization can have one point of contact concerning all matters when dealing with the contractor in service provision (William, Nisbet, and Liebich, 2012). The managing director is expected to take the central role played by facilities manager. Agro-industrial Company can then rely on the managing contractor in many ways in the facilities management. For instance, the operating contractor can be allowed by the business to be making a judgment in the process of making decisions hence has the option of choosing contractors. Agro-industrial Company can then be able to concentrate on the major businesses hence no need for making use of resources for facilities management (McLennan, 2000). Besides, the managing contractors can be able to obtain performance-based fees where the use of open book accounting can be possible. The company can then monitor how money is used and evaluate the work that has been done and the services that are subcontracted. Total facilities management Agro-industrial Company can opt to give the responsibility in full for the management of the facilities to one organization at a price that is fixed. Only one facilities manager is trusted in delivering the management and services needed. Total facility management provides an opportunity for only one organization to run and manage the entire facility services. It is considered to be efficient because of fewer costs and transactions as compared to the multi-level contractor. Total facilities management entails service delivery from one service provider (Rondeau, Brown, and Lapides, 2012). The service providers have close multiple service delivery where the total facilities management is essential to outsourcing deals. Total facilities management has been considered to be a practical choice for organizations in situations of outsourcing resources necessary for transferring service staff and managers. Recommendations Agro-industrial Company should consider some other potential factors apart from the risks and benefits in the process of making the outsourcing decision. The potential factors that the corporation should consider can be grouped into four divisions, which are; the environment, strategy, function characteristics and also the unit of cost. Furthermore, the aspect of core competence is one of the strategic factors which have drawn a lot of attention and it is usually linked to the outsourcing drive. Therefore, the term core competence refers to those factors which an organization employs in their process of sustaining their competitive advantage (Meng and Minogue, 2011). However, the aspect of core competency is in most cases used for the purpose of the primary functions. For instance, a good example of a core function is the debate in literature whereby it is broadly recognized. Besides, Agro-industrial Company should embrace outsourcing as the primary service provision approach. Comparing the aspect outsourcing and the facility management of the in-house eventually makes a conclusion on the best approach. The company needs to adopt an outsourcing form of contracting which aim at acquiring either services or even products from the outside organization, instead of depending on the in-house resources. However, when a given company is attempting to outsource, it is quite necessary to ensure that its mission, objectives, and also the goals which are set for a long-term have been achieved. Importantly, the aspect of outsourcing seems to give a company a significant advantage of having much time to focus on the core business and also having the capability to hire skilled experts who can provide services of high quality. Conclusion Facility management usually covers all the activities which are the non-core business of the organization. Some of the non-core activities that are covered by facility management include gardening services, kitchen services, and housekeeping among others. However, all the above activities are usually of great importance in every organization and therefore are required in every business enterprise. Also, it can be challenging for a business organization to take control of these all non-core activities as it continues to develop. Therefore, it becomes so costly for the various departments of an individual organization to monitor these activities even though they do not affect the major activities of the organization. References Buabeng, K.O., Duwiejua, M., Dodoo, A.N., Matowe, L.K. and Enlund, H., 2007. Self-reported use of anti-malarial drugs and health facility management of malaria in Ghana. Malaria journal, 6(1), p.85. Calde, S., Goodwin, K. and Reimann, R., 2002, April. SHS Orcas: The first integrated information system for long-term healthcare facility management. 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Facility management handover model view. Journal of computing in civil engineering, 27(1), pp.61-67 Read More