Applying manufacturing principals of standards, automation, and measurement to capital programs

As an industry, manufacturing has long been praised for its efficiency, automation, and continuous process improvement. Many other industries, including construction and engineering, have looked to manufacturing as a model.

Vesta is a leading real estate developer serving some of the world’s largest manufacturers in automotive, aerospace, food, and medical devices, including PepsiCo and Nestlé in the food industry; Dürr for auto parts; BMW for automotive; and Safran for aerospace.

Providing facilities across 13 states in Mexico, Vesta has had a unique opportunity to take the guiding principles of standardization, automation, and measurement from manufacturing, apply them to their own operations, and provide the world-class facilities their clients demand.

View on-demand webinar with Vesta: Optimize your capital programs—Lessons from manufacturing

Standards

Standards are critical to learn, analyze, and improve. Yet with every project being different, made up of new project team members, regulations tied to specific locations and of course, different scopes, standardization may be the biggest challenge the construction and engineering industry has faced. This challenge, for owners, manifest in the form of disparate data sources and formats, inconsistent processes, and disconnected systems.    

Vesta was growing rapidly and transitioning from being a private company to a public entity. The company recognized the need to truly transform their business and started by bringing in the right talent and expertise to manage this transition. Ivan Saavedra Maufras brought over 25 years of commercial information and communication technology experience to Vesta.

He knew the criticality of standards and the necessity of selecting the right technology to support those standards. He led an extensive effort to assess and scope the organization’s needs and goals, define processes and source systems to meet these cumulative needs. The Oracle suite of solutions including, ERP, Capital Program Management, HR, and CRM, was selected by Maufras and his team.

The central systems Maufras put in place have provided Vesta with the benefits of standardization the organization needed. Focusing on capital program management, all individuals have access to the same consistent data, regardless of their location, which clients they serve or even what organization they are with. (Vesta uses Oracle’s Primavera Unifier to collaborate with their contractors and suppliers).

Vesta also uses standard approval flows to keep operations running smoothly. This consistency lets individuals be more efficient and allows Vesta to compare operations project to project to take corrective action when needed and share best practices across their 200 properties throughout 13 states.

Their standardization also provides Vesta with meaningful reporting across their portfolio, looking at cost forecasts, actuals, status, and risk in a comprehensive view.

Vesta’s lessons learned on standardizing across 200 properties

• Involvement/support of upper management is mandatory.
• Data management is essential.
• A single source of truth is needed.
• Always work with the customers in mind.
• First fix the processes, then standardize it.

Example benefits Vesta has achieved from standardizing

• 4 times faster lease renewals and turnarounds.
• 27 times faster contract administration.
• 30 times faster invoicing.

To achieve the transformation Vesta sought, they turned to the complement of standardization, automation.

Automation

Vesta underwent an extensive system evaluation to find the right solutions to meet their needs. System flexibility, proven success with global leaders, multi-language and currency support, interoperability and the opportunity to consolidate vendor relations with a suite of Oracle offerings, were key to Vesta’s selection decision.

Just as manufacturers automate their operations, Vesta, automated their business processes to increase efficiency and accuracy and they demonstrated those benefits by measuring key indicators before and after automation.

Just as manufacturers automate their operations, Vesta, automated their business processes to increase efficiency and accuracy and they demonstrated those benefits by measuring key indicators before and after automation. They also look at automation as a journey. Key to their success has been a phased implementation based on an objective prioritization exercise.

And, once processes are automated, they are not set in stone. The combination of measurement to see what is working and what isn’t, and system flexibility, allows Vesta to continue to modify and improve both their processes, and how they are automated.

Both the organization as a whole and the individuals at Vesta have benefitted from automation.

Company benefits of automation

• Better control over contracts leads to more business.
• Improved invoicing provides on-time recurring revenue.
• Better budgets and insurance processes means less risk.
• Better maintenance satisfies customers and grows business.
• Better operations provide greater savings and margins.

Individuals’ benefits of automation

• Better processes = more control, less risk and less stress.
• More automation means more time to think and less time doing and guessing.
• Automation enables better answers to stakeholders.
• Automation means less time spent on low value work.
• An agile way of working and certainty of a job done well leads to job satisfaction.

To guide Vesta’s journey and accomplishments, they rely on data-driven measurement.

Measurement

You only know if you are succeeding and meeting your goals if you set goals and define your measure of success. Vesta followed a specific process to ensure meaningful measurement.

Vesta’s four steps to effective measurement:

1. Set goals.
2. Determine meaningful metrics.
3. Collect and access relevant data.
4. Use metrics to inform company direction.

Vesta set a number of goals based on what is important to their business.

Example goals set by Vesta:

1. Speed lease turnaround.
2. Improve space management.
3. Streamline facilities management.
4. Modernize contract management.
5. Simplify invoicing.
6. Improve reporting.

Once goals are set, a process must be put in place to determine what success looks like.

Maufras worked across functions at Vesta to determine a baseline of processes including those listed above. That baseline served as the starting point for goal setting. Vesta then set up their reporting using the Oracle solutions, to not only meet the requirements of management and Vesta’s obligations as a public entity, but also to measure progress from their baseline toward their goals. 

Benefits of metrics and how they inform our organization’s direction

• Increased trust of executives and investors.
• Increased stock value resulting from that assurance.
• Projected costs and revenue inform new project decisions.
• Regional costs inform build versus buy decisions.
• Tracking efficiencies and costs inform split of lease versus service.

Vesta’s lessons learned on effective measurement

• Set up data management structure from day one.
• Create a single source of truth for the company.
• Develop a granular multi-level data structure.
• Instill consciousness about the relevance of data.
• Gather data that will benefit different departments across the company.
• Have the right tools to visualize reports and analytics.

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