Agilent Technologies strengthens its bottom line with operational and real estate savings
At a Glance
- $19.5 million — Real estate savings that Agilent Technologies has achieved as a result of working with Johnson Controls since February 2006.
- $4.9 million — Operational expense savings generated in a seven-month time frame as a result of numerous supply chain and facilities management improvements and efficiencies.
- 2.6 million — The square-foot reduction in Agilent’s global real estate portfolio as a result of more efficient and productive real estate management, and taking advantage of consolidation opportunities.
The challenge: Reduce costs by millions without disrupting business operations or weakening competitive position
Agilent Technologies is the world’s leading manufacturer of testing and measurement equipment for the electronics, communications, and life sciences industries. Today, it has 150 sites and 15 million square feet of real estate in 30 countries. Despite its market leadership position, Agilent faced the same pressures as many technology companies in the highly challenging economic environment of 2009. These included a drop in orders in its core business.
In the midst of these pressures, Agilent needed to make significant reductions in operating expenses, while becoming more operationally and financially efficient, in order to sustain market leadership and shore up company finances so it could complete the largest acquisition in its history.
The solution: Company-wide money-saving supply chain, facilities, and real estate management initiatives
Since 2003, Johnson Controls has helped Agilent run its facilities more efficiently. In 2009, Agilent called on the Johnson Controls Global WorkPlace Solutions (GWS) group to help reduce operating expenses by 22 percent, or $4.9 million, and to achieve those savings in just seven months – in order to meet budgetary goals for the fiscal year. Johnson Controls GWS is the world’s largest global real estate and corporate facility management service provider. The GWS team worked hand in hand with Agilent to pursue numerous spending reduction and savings opportunities, including:
- leveraging Johnson Controls’ buying power to achieve more competitive pricing from the supply base.
- adjusting services levels for such activities as cleaning, landscaping and snow removal, and reducing the frequency of these services without compromising health and safety or impacting employee morale.
- improving spare parts inventory management to avoid costly overstocking while ensuring availability of critical parts.
- reducing spending on non-core activities.
The Johnson Controls team also worked with Agilent to help the company make more productive use of its global real estate portfolio by consolidating where possible and disposing of unneeded facilities. Agilent became more proactive in lease renewal negotiations to obtain more competitive rates for sites where it intended to stay, and to exit unneeded facilities without incurring a financial penalty.
Operational and real estate savings measures – including space consolidation and co-locating employees from different Agilent sites and groups – were implemented without disrupting normal business operations.
Results and benefits
Johnson Controls provided an integrated set of management services including real estate portfolio strategy support; and project, energy, and corporate facilities management. By working on all these fronts concurrently, Agilent achieved its goal of a $4.9 million operational cost reduction in the seven-month time frame it required. Agilent has also achieved a 2.6 million square-foot (21 percent) reduction in its global real estate portfolio. Since Agilent and Johnson Controls entered into a new contract in February 2006, Agilent has enjoyed $19.5 million in real estate savings.
We truly appreciate the remarkable speed in which Johnson Controls reacted to our request for savings and the spirit demonstrated by the entire Johnson Controls account team in rising to the challenge.
– Neil Rees, Vice President, Workplace Services, Agilent Technologies, Inc.
Johnson Controls can help you develop a corporate real estate strategy to make your buildings work more efficiently, sustainably, and profitably. Contact us to learn how, or try our operational and energy savings calculator today.