Optimal investing through efficient inventory

Optimal investing through efficient inventory

How do you optimally invest in your office furniture during the life cycle of your organisation? And how do you deal with maintenance and replacement? That is the challenge that the facility manager in an organisation faces as operational,  and the CFO and controller tactically and strategically. A number of choices are important to consider, to provide a good answer to these challenges.

Buy or lease

First, the choice between purchase and lease. As an organisation, do I choose to purchase the furniture so that maintenance and replacement come under my own management? Or do I opt for leasing furniture, where I do not buy a product, but buy a service and with that outsource responsibility for maintenance and replacement?

Short or long lease

And after that, my stress as a result of too many choices is not yet dealt with completely, because if I opt for lease, I am again faced with the choice: short lease or long lease. The first is more flexible and therefore more expensive, the second cheaper. Facility managers who have been a fleet manager within an organisation in a ‘previous professional life’, will remember that they once made the same considerations with regards to cars.

Replacement

Whether you choose to buy or lease in both cases, it is all about the moment of replacement. An important consideration is the state of maintenance of the furniture. Is it new, as good as new, slightly damaged, badly damaged or unusable. Each condition has a different replacement time.

Philosophy

And not only that, there are also several choices for maintenance:

  • Reactive: replace a piece of furniture when it is broken.
  • Planned / preventive: replace a piece of furniture at a specified time and before it breaks.
  • Condition-based: replace a piece of furniture when the condition of a piece of furniture demands it.
  • Just-in-time: the optimal strategy, combining the best of the first three.

 

A CFO / controller who has to make strategic decisions about the above choices ideally needs a dashboard with useful data, existing of:

  • An overview of all furniture, including the moment of purchase
  • An overview of usage
  • An overview of the condition

 

Only then will he be able to choose which investment delivers the optimum return for his organisation.