Every manager who runs a supermarket is well aware of the need for maintenance – when it comes to refrigeration, it is important to have a good handle on a store’s physical assets and make sure they are running as efficiently as possible.
The key here is to change the mindset for supermarkets’ maintenance personnel. Their work is important, and even the smallest strategic changes they make have an impact on other business functions and contribute to their companies’ bottom lines. Therefore, using key metrics to make more informed decisions will provide a key vehicle to communicate each and every one of their “wins” to senior management. Maintenance is more than a task on the to-do list – maintenance people can transform the process into a major profit center.
This is what it means to establish the business case for efficiency – if you can clearly spell out the difference between subpar maintenance and a more cost-effective approach, and express it in dollars and cents, you’re well on your way to a more profitable enterprise.
Making cost-effective improvements
According to an Energy Star release, one of the most important things that managers can do to increase supermarket profitability is monitor their energy use and look for ways they can eliminate inefficiency. The average cost of energy in a supermarket is approximately $4 per square foot, which adds up – for a typical store of 50,000 square feet, you’re looking at 1,900 tons of CO2 being emitted and a total annual expense of more than $200,000.
Any strategic way to reduce that expense is one that is worth exploring. Energy Star noted that improving energy efficiency is hugely important:
“Energy efficiency improvements may be essential to a supermarket’s continued success and the quality of the customers’ shopping experience,” the Energy Star release explained. “Too much cold air escaping from refrigerated displays, for example, may decrease comfort for customers and employees alike, requiring simultaneous space heating and a significant overuse of energy.”
Supermarkets’ margins are often extremely narrow when it comes to sales – often around 1 percent – but changes in energy efficiency can equate to pure profit. Saving $1 on energy is equivalent to selling $59 worth of merchandise.
A strategy of continuous improvement
According to Maintenance Technology, the key for supermarket operators is to understand the issues at hand and fully grasp the need to have a stake in energy efficiency. Houghton LeRoy, director of consulting enterprise applications for ARC Advisory Group, says it’s time to stop thinking of maintenance merely as a costly chore.
“Historically, maintenance has been viewed as a liability and a cost center, and manufacturers were largely apprehensive in terms of making the initial investment of time and money to implement proactive programs,” LeRoy said. “However, when companies begin to view their maintenance activities in the context of a continuous improvement strategy instead of simply a repair strategy, they’ll be able to more easily connect these activities to improvements in productivity, competitiveness and the overall bottom line.”
With a new outlook on continued strategic improvement, focused on finding ways to limit squandered resources and reduce regulatory risk, supermarkets can add a great deal to their bottom lines.