Is there more to sustainability than just being green?26th August 2014

Sustainability has risen up the property sector's terminology profile and has fast become a major buzz word.

So not surprisingly, when we think about sustainability, we tend to relate it to environmental or green issues. But, what is often forgotten is its impact on operational sustainability in contracts and supplier relationship management.

These two features must form part of any sustainability programme, without them you are left with a very ethical supplier, whose green credentials far outweigh their competitors, but a service delivery and relationship that leaves something to be desired…not very sustainable.

The importance of having a sustainable service cannot be underestimated. Prudent management of contractors can result in successful long-term relationships - where the supplier perhaps takes a more flexible approach. If, for example, cash flow issues result in short-term budget constraints, you may be able to call on your long-serving contractor for support. Their understanding of how you - generally - operate means they are likely to be more patient; they will (and should) have the longer-term picture in mind.

Communication is key. A good relationship will be to the mutual benefit of all parties - at the end of the day, everyone needs to think about the long-term. A two-way dialogue will encourage the supplier to make recommendations on how to improve certain processes. I would always advocate listening to the supplier and taking on board their comments and recommendations. Often they are on the front-line, best placed to provide this type of feedback. The easier you - as the client - makes it for the supplier to work for you, the better the service you will receive. Take time to request supplier opinions, and take on board any criticisms. Some of the best results we have achieved have been in partnership with our supply chain, utilising their superior knowledge of how the job runs and the pitfalls they face.

Manage the entire relationship, and spot any negative or positive trends; nip the negatives in the bud by communicating with the supplier and jointly establishing a platform for resolution, follow that through to ensure that a solid relationship continues. Praise the positive trends - everyone likes a pat on the back, suppliers are no different, it’s all too easy to get the stick out and beat them with it, sometimes the relationship will flourish just by saying thank you or well done. Breakdowns in communication are often the root cause of any problems.

A key aspect of any property manager’s role is the need to ensure tenant satisfaction, and that a property is operating to its full potential. The property manager therefore needs to guarantee they have the strongest possible team supporting them, both internally, from their accounts teams to procurement teams, as well as external suppliers.

Ensuring a sustainable cost model is in place is essential in managing the supplier relationship. Simply cutting suppliers margins will not benefit the supplier or the service delivery they are providing. Working in partnership with your suppliers to manage their productivity and efficiency, which should ensure they are making a reasonable, transparent and fair return for their efforts in supporting you will pay dividends. You need to breed a culture that lets the supplier know you are 'in it together' for the benefit of the asset.

Equally, the property manager needs to know the supplier being appointed has been subject to a rigorous and complete pre-qualification process, allowing them to be appointed for tasks in which they have proven competencies and specialisms. The risks associated with contractors working on site are undeniable. An open relationship will help to breed transparency and trust - as well as sustainability.

Reactive maintenance is one of the highest risk areas for any property. By its very nature it is unplanned, and can entice property managers to make decisions on the spur of the moment. This is when the risk heightens and costs usually increase. Sustainable procurement and supplier relationship management means risks and costs are reduced; you have your team in place - you know and trust them. This type of model protects the asset, maximises its value, breeds loyalty and ensures compliance.

With such a big focus on 'sustainability', isn't there now a real case for outsourcing to a procurement specialist? This type of model is proven when it comes to reducing risks and producing measurable results, both in terms of cost and measurable improvement to service. 

Our focus is on sourcing and managing suppliers, ensuring reactive and planned works are completed on time and on budget. The relationship we have in place with suppliers ensures that a high standard of works are maintained across our clients' portfolios, and they can rest assured that the service they receive is a sustainable one.

About the author

Chris MacDonald is managing director at Propertyserve UK, a facilities management helpdesk provider and managed procurement service for commercial buildings.

Propertyserve UK supports commercial landlords and managing agents that own or manage properties throughout the UK. The company helps to remove the logistical issues and risks associated with maintaining the fabric of the building, using sustainable procurement methods. It also focuses on making costs transparent, whilst reducing the risks associated with CIS, health & safety and debt liability to the landlord.

Handling all liaison between contractors, facilities managers and tenants for maintenance issues, Propertyserve UK aims to offer a cost and time effective service for all parties. The company provides ongoing supplier management - greatly reducing the risk to the property owner.