Presentation Title - Workplace Futures Conference

WORKPLACE FUTURES THE CRYSTAL February 12th, 2012

Presentation of the awards Don’t miss it : See who won : in 2 hours!

Tea Break

Leading FM: delivery in a demanding relationship

Tuesday 12th February 2013 Chris Green, Arcus Simon Wetherell, Sainsbury’s

Agenda •The Mechanics •What’s demanding...an Arcus view •Why it’s good for Arcus

•The Sainsbury’s perspective; • Joint Vision • Commitment • Benefits

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The Mechanics

• Joint Venture Agreement – Equal Board representation • Services Contract – All the usual contractual elements...

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Services Arcus Provide Managing Agent • Helpdesk, Commercial, Contract Management, RFMs, Technical Support, H&S, Management Information, Refrigeration Bureau Self Delivery • M&E, Refrigeration, Building Fabric Service Stream • Supermarket and Convenience stores, Petrol Filling Stations, Distribution Centres and Offices.

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Scale of our Business and JV Single channel

Multi channel

Managing Agent

Managing Agent

Self Delivery

Managing Agent Self

Delivery

February 2009 223 Colleagues

Self Delivery February 2013 610 Colleagues

February 2009 800 stores

February 2013 1200 stores

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Annual Budget Process

Sainsbury’s Total FM Cost

Contract

PAYG/ETCW Arcus

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Cost Plus Contract

• SSL will cover costs up to budget.

• KPI’s are used to generate mark-up and profit. – Re-negotiated each year to drive service • All of the mark up is at risk every month

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Key Performance Indicators

• • • •

Asset Performance Compliance Productivity Projects – Continuous Improvement

• Customer Survey • Financial

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So what is demanding about this joint venture?

Our non-execs are also our customer. Sainsbury’s know everything about us. There is no where to go and no where to hide.

This drives incredibly high standards of governance and culture. Ultimate intelligent client model 10

So what is demanding about this joint venture?

Governance/Culture

Customer

Health and Safety

The most trusted retailer

People

Where colleagues love to work

Service

Make customers lives easier

Finance

Offer great quality and service

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What are the outcomes from this demanding relationship:

Juggling risks, rewards and opportunities

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Risks

• We have to be good at running every aspects of our business... – our customer sits on the board

• Serious failure has punitive consequences. • ALL profit is at risk EVERY month.

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Rewards

• Long term contract.

• Stability to build our business and our team. • A customer that pays on time. • Formal performance sign off brings objective results for KPIs.

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Opportunities • Ability to influence our customer in a way no other relationship can.

• An holistic and shared long term view of how to develop our FM Service. • Access to more channels and more scope. • Success maybe rewarded with growth opportunities. 15

Sainsbury’s Perspective

Simon Wetherell Head of Facilities Management Sainsbury’s Plc

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Joint Vision and Goals

Our Vision for FM: “Through Arcus, we will provide an industry leading service that our colleagues trust and say they are proud of”

Our Vision for Sainsbury’s: “To be the most trusted retailer where people love to work and shop.”

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Learn the lessons of the past... • You can’t abdicate responsibility for FM to the supply chain.

• Hard wire our commitment into the contract eg. Board Membership • Be an intelligent client; ability to directly influence shape our partner. • See FM as a key enabler of the strategy and vision 18

Commitment is Everything We put a huge amount of time and focus into Arcus. For example; • Board • Management Committees • Trusting Arcus • Colleagues seconded between the companies • Redesign internal FM roles and process • Collaboration 19

Resolving difficult responsibilities

• Procurement (SSL) ‘v’ Contract Management (Arcus) • Compliance of the estate • Supplier payments: Arcus Commercial team ‘v’ SSL Finance

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Benefits of dual citizenship?

• Role as a Director • New business opportunities for Arcus • Never taking the easy option – be hardest on those closest to you.

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Put in the effort and get the reward • FM Service transformed in the last 3 years. • Customer survey of Store Managers – 83% positive (Dec 2012) • 4 years ago it was the single biggest issue at CEO roadshows

• Long term approach – power of developing a vision and building it over time. • Compliance – best in class.

• Strategic flexibility 22

When does a JV work well; when the status quo is not an option. If...

• • • •

FM can be competitive advantage to your business FM spend matters FM is a strategy As the customer you are also willing to try something new

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Thank you

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