HVAC Event Management
inRevo2 was contracted to manage the HVAC portfolio of Target Corporation. Despite the fact, Target Corporation had already devoted significant resources to the management of repair events (in terms of manpower, technology infrastructure and money); several trouble spots were quickly identified.
- Their system data platform only allowed them to track asset events by location and not by each individual unit.
- Their focus was managing vendors to hourly cost controls and not to per event costs.
- Their consolidated vendor base could not meet the demand caused by the seasonality of the work.
- On-site managers had little information available on status of work orders and the process for “resolves.”
Through inRevo2’s program, Target Corporation could see immediate, bottom line impact as well as realize sustained.
- inRevo2 platform allowed Target Corporation to not only track events by individual unit, but to utilize the 10+ years of cumulative intelligence Intel has acquired from managing the systems of many customers. Thus, Intel was able to provide Target Corporation with substantive information on which unique parts within each system had the highest likelihood of failure and what the collateral impact of that failure is likely to be.
- Due to mounting financial pressure placed on the facility team by senior financial decision makers, Target Corporation made the decision to impose hourly cost controls on their vendors. The net result of this initiative was the opposite of what the team hoped for. Since the only bench mark was “hourly rate,” the vendors simply adjusted repair times and added other ancillary costs. Target Corporation’s “per event costs” increased because of this program.
- Target Corporation believed a reduction in the number of service partners would allow for greater leverage and control. Neither proved to be true. The consolidation strategy did not control event costs (see above), the perceived increase in leverage and buying power only had short term impact as the quality of work and integrity of data began to suffer due to a loss of system checks and balances. In addition, variables around seasonality and system environments were not considered. The vendor base was not able to meet the service requirements of high demand seasons and were required to carry additional, “just in case,” staff during low demand seasons.
The results of inRevo2s’ program can be quantified in many ways. But at the highest level, only a few really matter.
- Did we reduce Target Corporation ‘s overall cost of ownership?
- Did we help Target Corporation create a situation where they are better able to focus themselves on the core competencies?
The answer was a resounding YES! In one year, inRevo2, could reduce Target Corporation’s average per event cost by 19%. In addition, we could create an environment that enabled them to reallocate millions of dollars in resources to revenue generating activities.
Many of inRevo2s’ clients have attempted to produce the type of gains that our platform can produce internally. Target’s team quickly realized to achieve our capabilities, would require an investment of millions, C-level representation, a research and development team, an analytics team, a vast network of local vendors, the creation of economies of scale/leverage, data from multiple corporations for comparable, an extensive workforce, and much more.