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Sprouts Farmers MarketAutomating Facility Maintenance

CASE STUDY: Five Lessons Learned to Avoid the Pitfalls and Accelerate ROI

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WEBINAR: Automate Facilities Maintenance

Presenter:Jerry StutlerVP Construction and Facility EngineeringSprouts Farmers Market

Moderator:Mike StadelmanVP Marketing, Verisae

Moderator:Edward ParkerRegional Sales Manager

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AGENDA• Sprouts Overview• Challenges• Goals• Implementation• Results• Lessons Learned• Vision• Q&A

Automate Facilities Maintenance

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AGENDA• Sprouts Overview• Challenges• Goals• Implementation• Results• Lessons Learned• Vision• Q&A

Automate Facilities Maintenance

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• Full-service natural food stores• Commitment to “fresh and natural “

fruit stand heritage• One of fastest growing retailers in US

2002 2004 2006 2008 2010 2012 2014

150+ Stores

Sprouts Overview – Full Service Grocery Retail

10 Stores

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Facilities Maintenance Support• Central purchasing • Internal F&M call center• External service providers

• 2012: 3 FTE Staff • Today: 1.5 FTEs

Sprouts Overview – Internal FM Support

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Sprouts Overview – Rapid Growth Drive Change

Rapid expansion exposed need for growth in F&M systems and processes

“We knew we had to change our systems and processes.”

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AGENDA• Sprouts Overview• Challenges• Goals• Implementation• Results• Lessons Learned• Vision• Q&A

Automate Facilities Maintenance

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Manual & Inefficient Processes

• Duplicate data entry• Manual approvals• Everyone worked overtime• Temps for data entry• Copy machine overwhelmed

3 FTEs + potentially 2 more FTEs needed = !@?!*

Sprouts Challenges – Manual Processes

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• Rapid expansion required tighter financial controls

• Needed improved systems to document maintenance and energy expenses

• No capacity for accruals

• Needed to maintain (or cut) costs amidst store expansion

Challenges – Outdated Financial Controls

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Need to improve refrigerant tracking

• Manual and inefficient processes

• Hard to identify troublesome sites

• Needed visibility and accountability

• New reporting for CARB in 2014

Challenges – Environmental Compliance at Risk

0%2%4%6%8%

10%12%

Pre Post NewGoal

Refrigerant Leak Rate

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Sprouts Challenges – Need to Control Maintenance Costs

• Increased complexity and scope of service provider network

• Unclear equipment inventory at store level

• No data-driven means for vendor rating and contract compliance

• More service contractors to manage

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Sprouts Challenges – Change Management

Resistance to Change Amidst Rapid Growth

• Current vendor had delayed upgrade to SaaS

• Change is hard – even harder during major store expansion

• Skeptical of ROI from new system

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AGENDA• Sprouts Overview• Challenges• Goals• Implementation• Results• Lessons Learned• Vision• Q&A

Automate Facilities Maintenance

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Sprouts Goals

• Reduce costsfor current stores

• Add stores without increasing facilities staff

• Improve execution of Facility Maintenance

• Improve equipment buying process

• Improve reporting, transparency and accountability

• Involve all stakeholders in vendor selection process

• Technology platform for sustained growth

Goals:

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AGENDA• Sprouts Overview• Challenges• Goals• Implementation• Results• Lessons Learned• Vision• Q&A

Automate Facilities Maintenance

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Implementation

• Started at category level – (not asset Level)

• Despite urgency, focused on quality of implementation… did not rush it

• More of a process change than anticipated

• Went to asset tagging after 1 year; Finance Department pushed justification to do it

• Work Order Processing – Implemented best practices

“We asset-tagged 150 stores in 30 days. The process was much simpler and faster than we ever expected.”

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AGENDA• Sprouts Overview• Challenges• Goals• Implementation• Results• Lessons Learned• Vision• Q&A

Automate Facilities Maintenance

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Results

• Hard Savings Additional personnel costs avoided Improvements in vendor management Improved invoice management and processing to reduce billing

errors

• Soft Savings Process efficiencies – moving from manual to automated processes Equipment project costs containment (new stores and remodels) Better reporting, transparency and accountability

• ROI Estimated Payback in 1 Year

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Operations Personnel are Efficient and

Effective

ROI - Headquarters

Better Oversight of Vendors

Accurate and Faster Reporting

Manual Processes Now Automated

Improved Financial Controls

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Stores are happier and

more focused on customers

ROI – Store Level

Fewer instances of food loss

Reduced maintenance costs

Allows store Manager to focus on sales

Equipment

2%-3%

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AGENDA• Sprouts Overview• Challenges• Goals• Implementation• Results• Lessons Learned• Vision• Q&A

Automate Facilities Maintenance

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Lessons Learned

LESSONS LEARNED - #1Don’t under-estimate the need for process change and advance planning:

• Changing behavior and processes takes time

• Be prepared to enforce accountability and adoption

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Lessons Learned

LESSONS LEARNED - #2The sooner you get started the better:

• Easier to implement with fewer stores

• Gain compelling benefits sooner

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Lessons Learned

LESSONS LEARNED - #3Leverage industry best practices:

• Asset tagging

• Automated workflows

• Reporting / environmental compliance

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Lessons Learned

LESSONS LEARNED - #4Involve all stakeholders to:• Help define your needs • Develop a custom-tailored solution • Gain buy-in from internal and external

stakeholders

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Lessons Learned

LESSONS LEARNED - #5Be open to a bigger vision:

• Become educated through the selection process

• Plan for the future, not just immediate needs

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AGENDA• Sprouts Overview• Challenges• Goals• Implementation• Results• Lessons Learned• Vision• Q&A

Automate Facilities Maintenance

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Sprout’s future with technology• Reporting – next level with advanced

analytics (Query Studio)

• Mobile technology (eliminates kiosk)

• Energy Analytics

• Alarm Monitoring

Vision - Next Steps

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View the recorded webinar on YouTube