ServiceMaster Global Holdings

Innovations in the supply chain are allowing ServiceMaster Global Holdings Inc. to take its services to the next level.
By Eric Slack

Founded in 1929 as a mothproofing company, ServiceMaster may be nearly 90 years old but it thinks more like a start-up. By challenging the way things have always been done, ServiceMaster is developing new innovations to protect and maintain homes and business. At its core, the company is committed to finding better ways to provide outstanding service and customer communication, where, when and how customers want it delivered.

This is consistent with ServiceMaster’s history. The company’s offerings expanded to include carpet cleaning in 1952, establishing one of America’s first franchise businesses. In 1962, the company entered the healthcare arena and was a pioneer in third-party outsourcing.

In 1980, ServiceMaster began providing services to educational facilities and expanded its range of commercial services. Also in the 1980s, ServiceMaster built on its original franchise business to form a network of high-quality branch and franchise-based service companies, including Terminix and Merry Maids, while adding other service brands, including American Home Shield. Today, ServiceMaster companies provide residential and commercial services to more than 75,000 homes and business daily.

“We provide residential and commercial services through our company owned businesses, our franchises and our American Home Shield service contractor network,” says Mary Kay Wegner, senior vice president, services and operations, Terminix. “It is amazing to me to see what has been built in terms of quality and service delivery. To aggregate a supply market like that into a powerful service delivery tool is incredible.”

Extensive Reach

Overall, ServiceMaster procures and buys $1.5 billion of goods and services each year. A large portion of that is to provide materials and supplies for branch-based businesses. It also works with distributors and wholesalers across its national footprint for larger appliances. Additionally, the company has a service contractor base of approximately 11,000 trusted professionals, and ServiceMaster has strong processes and controls in place regarding its qualifications and ongoing quality management.

“Because of our buying power, we can leverage that to help franchises and subcontractors to get pricing they couldn’t get on their own,” Wegner says. “We source all goods and service across the company. Our traditional sourcing activities and our management programs help our partners run their businesses more effectively.”

To ensure that it is addressing pressing issues facing its sourcing operations and optimizing and enhancing its services, ServiceMaster’s supply chain team updates its category strategies every six months. The goal is to align with the company’s overall strategy and to be agile in how it is sourcing materials and working with suppliers.

“We are enhancing our digital capabilities so consumers can buy our services when, where and how they want them,” Wegner says. “One of the supply management teams’ focus is working as an agile sourcing arm for the company. With so much happening with technology throughout the company, we have to work quickly with the sourcing of technology suppliers. We are also driving innovation with the products we provide to customers, and we work to have a quick product development cycle with business partners so we can get products to market quickly and meet the needs of the residential and commercial customers.”

Beyond that, ServiceMaster is working to stay on top of trends and emerging suppliers. For example, the company has built a strong base of technology suppliers that allow its technology professionals to tap into when they have any technology need.

“We strategically sourced all of our suppliers and have metrics and performance reviews, sitting down with them several times a year to discuss each company’s strategic objectives,” Wegner says. ”We work on trying to stay aligned with what we are working on within the company and then setting expectations and managing performance with suppliers. We do the same thing with the service contractor network.”

Ongoing Effort

In the last few years, ServiceMaster’s supply management team has created a streamlined process for all sourced goods and services for the company, overseeing each selection and ensuring the company gets the best value and best vendor. All “procure to pay” processes run digitally so it doesn’t consume time or paper for internal buyers. Wegner’s team also created an internal training boot camp to help train sourcing employees and ensure they are using the same approach, language and processes. The boot camp centers around the fundamentals of category management, negotiation and marketplace awareness to help team members buy products and services and manage suppliers.

As the company looks ahead, its supply chain team will work to make sure that it is easy for customers to find, buy and stay with the company. This is particularly true in its American Home Shield business, a leader in the home warranty industry.

“We want customers to be able to quickly source parts and options for replacements, making selections utilizing technology rather than imposing an answer on them,” Wegner says. “Our ServSmart technology allows customers to interact directly with how we source goods and services, and they get to go through the buying process and determine what they want. We are digitizing the supply chain, helping the end customer pick what they want.”

ServiceMaster has always looked to use technology for internal improvement opportunities. Now it is helping customers to directly interact with the supply base and access services.

“When CEO Rob Gillette joined the company a few years ago, it was exciting to see supply chain elevated to the executive level,” Wegner says. “The supply management organization has been able to fund growth for the company and give us a competitive advantage. Top-level support makes a difference. We’ve taken cost out of the business, which can be invested into company growth, and we are giving a competitive advantage to our branches, franchisees and service contractors.”