Facility Management

Increased competitiveness in the business sector puts considerable pressure on companies to reduce expenditure on "non-core" activities, such as maintenance. This encourages buildings' owners and users to increase their expectations and requirements of facilities. Facility managers are thus expected to attain lower operational costs and risks through effective and efficient management of facilities, without compromising their performance. Today FM's operate at two levels: the pure operational and the strategic/tactical and both are integrated into a Facility Management Algorithm.

Any Algorithm for a specific industry is based on the strength of the identified effects of parameters. In the case for FMO's, parameters include maintenance expenditure, actual service life, and the performance of facilities. The Facility Management Algorithm (FMA) addresses three core fields of facility management:

1) Maintenance
2) Performance
3) Risk

 

Over the past three decades, the field of Facility Management (FM) has witnessed significant developments, due mainly to the following 7 market trends:

1. Increased construction costs, particularly in the public sector
2. More tenacious property owners seeking higher cash profits, thus lower FM expenses while maintaining a higher quality facility
3. A greater recognition of the effect of space on productivity
4. An increased performance requirements by users and owners
5. Contemporary bureaucratic and statutory restrictions that decelerate the procurement of new construction projects.
6. Recognition that the performance of high-rise and complex buildings is highly dependent on their maintenance (Shohet, 2006).
7. Labor cuts to the Facility Maintenance crew for budget savings

As a result, the traditional "maintenance manager" has transferred the work to a Facility Management organization with "several facility managers," and this is one of the key requirements in an organization's continuity and success (Atkin and Brooks, 2000). This is also seen as a new growing trend in the GCC where we are witnessing a construction boom and a parallel growth in demand for Facility Management Organizations to maintain these new facilities.

Strategic FM

In these Facility Management Organizations (FMOs), the FM's responsibilities are broadened to encompass; buying, selling, developing and adapting stock to meet wants of owners regarding finance, space, location, quality and so on. Now, it is recognized that property is a cost-center that can contribute to profit, and as such requires effective management. Buildings are expensive to maintain and adapt, yet whatever their use, any "good" building should be habitable, secure, durable, energy efficient and adaptive. As stated by the International Facility Management Association (IFMA, 2004), FM is taken to be: "A profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, process and technology. " And conclude with a definition of the following attributes as key processes for successful implementation of FM:


1. Service requirements management
2. Service planning
3. Service performance monitoring
4. Supplier and contractor services & cost management
5. Health and safety processes
6. Risk management
7. Service coordination
8. Maintenance
9. Performance
10. Development, and Information and Communications Technologies (ICT), which integrates between the other domains


The FMA focuses on helping the management processes and identifying when to roll out change, rather than focusing on the technical aspects of FMO. This means that improving the delivery of FMO's efficiency is achieved by increasing the responsibilities given to the FM.

 

Strategic Capital Planning and Management

An organization's property portfolio is commonly the second largest item on the balance sheet, following only employee salaries and benefits. Business operations are dependent on the facilities and infrastructure managed and operated by the facilities team. Successful capital plans - and their effective execution - enable these teams to reduce risk and cost, provide facilities that are less expensive to operate, promote a better working environment, and better serve the overall organizational goals and objectives.
In this sense, the facilities capital plan needs to be integral to the organization's overall strategic plan, or at a minimum, facilities capital planning should be carried out in tandem with strategic planning activities. Organizations with strong processes and systems for assessing capital assets, prioritizing capital requirements, and documenting the impact of alternative funding scenarios are best positioned to advance their objectives in a changing environment.

 

With Facilities Capital Planning and Management, it is important to have a structured and consistent approach. Ideally, a facilities manager has a process in place to gather objective analytical information regarding facility condition, enabling the organization to:
• Pinpoint repairs and upgrades need to be made
• Calculate estimated costs of those requirements either with your FMO team or with subcontractors
• Prioritize requirements according to organizational objectives and risk
• Run funding scenarios that demonstrate the impact of different spending levels
• Develop a continued that will sustain the facilities and support their function for years to come


This type of robust and strategic Facilities Capital Planning and Management process should incorporate the following seven steps:


• Step 1: Define the Process & create control points for monitoring (use DFC's)

• Step 2: Gather Data - Facility Condition Assessment FCA (The composition of their facility portfolio the existing physical condition of their facilities, the required remediation's and their costs.

Types of Data:
1. Building Profile - size, age, construction type, location, etc.
2. System Renewals - HVAC, roof, exterior, etc.
3. Condition Data - Urgent issues, code violations, etc.
4. Non-condition Data - strategic, risk, programmatic, criticality, etc.

• Step 3: Analyze Benchmarks using the Facility Condition Index FCI

• Step 4: Prioritize Capital Projects and schedule them with Critical Chain Project Management utilizing your resources as much as possible

• Step 5: Demonstrate Impact of Funding e.g. simulate the different scenarios of a Future Reality

• Step 6: Create Defensible Budgets

• Step 7: Develop Process for Continuous Update and improvement

 

 

 

Main Benefits of Capital Planning

With the right Facilities Capital Planning and Management process in place, an organization is able to:

• Develop a long-term view of capital planning with accurate multi-year forecasting
• Have a consistent approach to evaluating the property portfolio across campuses, regions and geographies
• Make investment decisions based on objective, analytical and transparent information
• Reduce financial, operational and legal risks
• Deliver substantial cost savings and efficiency gains
• Ensure that facilities are meeting the organization's evolving needs


When facilities capital planning efforts align with an organization's mission and objectives, capital investments are optimized to deliver value. Strategic facilities capital planning and management leads organizations to far superior and more defensible results.

 

Risk Management

Risk management should be a high priority for any facility, and it is achieved through a risk management program, in which risks are identified, analyzed, classified, and controlled. We have found that one of the facility manager's principal duties is to identify, analyze and economically control those business risks and uncertainty that threaten assets or cause loss of earning capacity in the organizations occupying the facility. We believe the following are the seven main levels of possible risks:

1. Customer care
2. Business transfer risks
3. Legal risks
4. Facility transmitted risks
5. Corporate risks
6. Commercial risks
7. Financial and economic risks


The risks cannot be controlled by any actions taken by a facility manager but only by implementing the appropriate deployment flow processes can we mitigate or minimize the risk and contain it if all hell breaks loose.
On the other hand, risks associated with the regular day-to-day operation of facilities can be eliminated; these are typically regulated and monitored by the FM department. This is where the integration of value engineering (tactical) and value management (strategic) is vital to the implementation of FM risk management.


From this review of knowledge, it is argued that the effectiveness of facilities will increase with the growth and development of the Facility Management profession towards a proactive, strategic discipline. This will change the position of FM in FMOs to a more central part of the organization - a position that will help shape organizational decisions and processes.

 

 

Questions for you:

1. Did you know that the Service level agreements (SLA's) are all encompassing and the projected budgets (the base line) should be achieved and preferably with savings?
2. Are your replenishment and contractual services planned for the long-term?
3. Are you using an adequate up to date ERP System that is subordinated to your system constraints and where the technological software accelerates your processes?
4. Are your FMO's supporting facilities from a Centralized and optimized Facility Management Organization Hub?
5. Did you know your FM is responsible for making strategic and operational facilities-planning decisions that affect the facility user's business performance? This is particularly true in healthcare, hotels, manufacturing facilities & commercial. These are considered to be among the most complicated and difficult types of facilities to manage, maintain, and operate.
6. Do you use critical chain project management to schedule recurring processes and recurring work orders (WO)?
7. Do you calculate and monitor dispatch turnaround time of completion for WO requests?
8. Do you statistically monitor with SPC all your key controls throughout your FMO processes and your organization?
9. Do you monitor all of the following key industry metrics for your facilities:
Building Performance Indicator (BPI), Facility Coefficient (FACy), Annual Maintenance Expenditure (AME) and Normalized Annual Maintenance Expenditure (NAME), Maintenance Efficiency Indicator (MEI) Building Risk Indicator (BRI)?
10. Do you calculate T-Put Dollars generated income per square meter?
11. Do you have service level changes (services you rendered for a facility that is out of scope to the SLA)? Do you monitor this?
12. Do you monitor service satisfaction building performance scores?
13. Do you 0ptimize your organization with the Facility Management Algorithm that incorporates your systems constraint and the metrics in Question 1-12 ?


When we look at the Facility Management process we believe a core holistic constraint exists. This is the agreed upon Service Level Agreement Lease Facility Management Baseline. Budgets are drawn for a multitude of maintenance services, planned additions and risk management expenses. The implementation of performance indicators in the context of a holistic Facility Management Algorithm (FMA), is planned under the frame of the systems constraint, the SLA, during which the remaining system processes resources subordinate to the systems constraint.

 

THE FACILITY MANAGEMENT ALGORITHM

The Facility Management Algorithm (FMA) provides insight into the assessment of parameters that affect maintenance, performance, and risk in facilities, e.g. occupancy, age, and performance of buildings. The Algorithm consists of three main interfaces: Input Interface, Reasoning Evaluator and Predictor, and Output Interface, which are divided into five phases (A to E)

 


The Input Interface requires the user to provide parameters that are related to the facility, while the Output Interface provides the user with a review of the main topics analyzed by the reasoning interface. The Reasoning Evaluator and Predictor Phase implements twenty procedures used by the Algorithm for computing the Key Performance Indicators (KPI's) for the facility in question. Two main principles outline the design of the FMA, as follows:
1. The structure of the database is object-oriented, enabling adaptability of the database to diverse buildings; and
2. The Algorithm links three core issues of FM: maintenance, performance, and risk. It can be expanded to incorporate operations and energy, business management, and development aspects in future development.


We have 20 developed optimization procedures that encompass our hybrid tools from CGR Toolbox and they will be used as part of your corporate core Algorithm.
VALIDATION OF THE ALGORITHM - with case studies and customers
Our experience suggests modifications in the implementation of maintenance work methods, such as considering the distribution of sources of labor with proper DFC's and critical chain, and investigating the maintenance policies of the facilities and FMO (all become preventive as against corrective). Furthermore, the major recommendation for the decision-makers in the facilities is to shift toward the MEI=0.45. This can be accomplished by improving performance, while at the same time decreasing the expenditure for maintenance.
Actual performance may also be broken into each of the particular buildings; we can see that one building performed at a good level versus another one at a satisfactory-marginal level, and three buildings at a deteriorating level. The analysis can also be split by different FM properties. We found that in most cases FMO's have not truly utilized their capacity without additional resources. This means that on average a minimum of 12% found capacity is proven and supported with the Algorithm.
In reviewing risk management and capital expenditure requirements, building systems were detected to be in the Highly Critical risk level. These findings, together with the performance scores and projections, may be used by the facility manager for organizing and setting priority of maintenance activities. For example, it may be observed that 8 Buildings carry the highest number of systems in Highly Critical or Critical risk levels. Adding the low BPI, it can be deduced that major modifications are needed for maintaining two of these eight buildings. The correlation causing these major modifications can help us the variables that caused the failed works of the two buildings. This implies that special consideration may be required for policy setting and its implementation in these facilities.

 



Assuming improved efficiency of maintenance (MEI ranging from 0.45 to 0.52), a predicted Annual Maintenance Expenditure ranging from $24.7 to $28.6 per sq-m is required.

 

Application Summary

Facility managers, in general, must consider a large variety of factors in their decision-making processes. Yet, existing methods for supporting these processes are limited at all levels.
By being capable of predicting different FM industry requirements, such as the performance and maintenance budgets with our tools and our Algorithm, the Facility Management Organization will become more structured and quantitative. Our thinking tools will elevate and accelerate the system, using critical chain to expand the existing body of knowledge on the subject of FM core parameters.
Adjusting the Algorithm to fit your organization requires revisions, such as inserting new databases of building components that will assure the suitability of the developed Algorithm and the capability to implement it in different types of buildings, such as office buildings, educational campuses, public buildings, military facilities, etc.

 

 

Conclusion

Through years of working with FMO's in developing integrated workplace solutions, CGR Systems has implemented its tools to efficiently support facilities management growth. Our Holistic approach merged intelligence, industry knowledge, technology, and standardized processes to optimize your workplace management organization. Let CGR MENA review your FMO setup, drill down your core strengths and weaknesses (high risks and low risks) and subordinate your processes to your ultimate goal. This will generate additional cash profit, and not just cash flow for many years after project completion.
Buildings should be a place for your customers to enjoy an excellent holistic brand experience, and a setting for your client's employees to shine. At its best and most refined, facilities management should be invisible to your end users. If you notice it, then something has probably gone wrong.
Through our North American work, our customers benefitted from our holistic scientific management experience. CGR MENA offers the consulting expertise of its Canadian, American and British network of professionals across all its service offerings, allowing you the opportunity to choose the type of engagement Algorithm - integrated or independent - that best fits your business needs.

 

 

Our team introduces game changing practices in the areas of:

• Facilities Management
• Facility Operations, Preventative & Demand Maintenance Management
• Financial Management, Operating cost management
and reporting, Reduce Cost
• Operations Centre
• Optimization of your Supply Chain Management
• Compliance
• Benchmarking & Strategic Information Management
• Critical Facilities Management
• Capital Asset Planning
• Strategic Planning
• Real Estate Services
• Program and Project Management
• Environmental footprint
• Minimization of your Health & Safety cases
• Workspace Technologies
• Energy and Sustainability
• Organization design
• Highly informed real estate decisions
• Create value Improve performance.

We develop actionable plans that help companies shed excess space, build flexibility into their portfolio, and accurately understand growth drivers at the business unit level.
Every CGR MENA engagement begins and ends with consulting, an essential part of, and first step in, all of our service offerings. Our holistic CGR ToolBox leverages our intellectual capital to develop solutions that meet an expressed problem or need.
All of our client relationships begin with an analysis of the customer's business and stated objectives to find optimized solutions. Corporate real estate is dynamic and ever shifting to support core business operations and market demands. When change is required in your real estate portfolio, CGR MENA can guide you to make the best, most informed decisions that will result in the maximum value return to your organization.

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