Lecture on Innovation & Cost Saving Strategies in Facilities Management


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Lecture to students at Liverpool John Moores University in December 2013 on Cost Saving Strategies and Innovation in Facilities Management.

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Lecture on Innovation & Cost Saving Strategies in Facilities Management

  1. 1. Facilities Management Innovation & Cost Reduction in FM Author: Mark Whittaker Date: Tuesday 10th December 2013
  2. 2. Lecture Content 1. Getting to know each other. 2. The FM Market 3. Innovation in FM 4. Cost Saving Strategies 5. Careers 6. Questions and Answers.
  3. 3. To start ….a question about YOU How many of you have a firm idea what career path you wish to take, post graduation?
  4. 4. My Career Path
  5. 5. When I was 18……..my career choice…
  6. 6. Yes, I was a University Student Once
  7. 7. My Path into FM
  8. 8. M.W.I.M.
  9. 9. 2. The FM Market
  10. 10. The basics What is Facilities Management? “Facilities management is the integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of its primary activities”. (CEN the European Committee for Standardisation) Facilities management encompasses multi-disciplinary activities within the built environment and the management of their impact upon people and the workplace. It contributes to the delivery of strategic and operational objectives. On a day-to day level, effective facilities management provides a safe and efficient working environment, which is essential to the performance of any business – whatever its size and scope.
  11. 11. What is at the core of Facilities Management? "A profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, process and technology."
  12. 12. History of FM  Cost-cutting initiatives of the 1970s and 1980s led organisations began to outsource ‘non-core’ services  Integration of the planning and management of a wide range of services both ‘hard’ (e.g. building fabric) and ‘soft’ (e.g. catering, cleaning, security, mailroom, and health & safety) to achieve better quality and economies of scale  Formation of the BIFM in 1993, followed by the development of specialised training and a qualification  Step-change with the Private Finance Initiative (now Public Private Partnerships), becoming an integral part of large-scale projects to manage, replace, and upgrade the country’s infrastructure and public service facilities. This new approach was swiftly followed in the private sector and abroad.
  13. 13. Current Market Size Estimates vary; market research suggests that, in the UK alone, the sector is worth between £40bn and £95bn per annum “We need to let more people know just how important the FM industry is in the running of the country as well as the contribution the FM industry makes to the UK economy. We represent £40bn in turnover and over 500,000 employees; 5% of GDP is a significant amount.” Chris Hoar, Chief Executive
  14. 14. Who are the major UK FM players?
  15. 15. A Question Why do you think Facilities Management is often overlooked in the UK Corporate Boardrooms?
  16. 16. Future Trends The report also mentions that public expenditure, climate change and economic growth will be amongst those with the biggest impact on the industry “Some single service providers may lose share in the medium term as larger clients seek to reduce their costs further and move toward a preference for ‘bundled service provision’.”
  17. 17. The Future? ISS 20:20 Vision 1. Capitalism Reinvented 2. Great Transformation 3. Sustainable Business 4. Fragmented World
  18. 18. 3. Innovation in FM
  19. 19. What is Innovation in FM? “Innovation in facilities management is the introduction of a new product or process, which delivers tangible and measureable benefits in terms of operational cost reductions, increased efficiency and optimising building usage and performance. It is not merely process improvements.” Can you do better?
  20. 20. How do others define “innovation”?
  21. 21. Why is Innovation important?
  22. 22. Is Innovation being delivered in the UK?  Cost , innovation (86%) & local supply chain most important in tender evaluation  77% of cases innovation happening
  23. 23. Highlights
  24. 24. The “Innovation Environment” “an external supplier might bring innovation and efficiencies that are beyond the scope of the existing team. They will also be more familiar with procedures for help desk, customer relationship management and the handling of change Requests.” During the design stage of buildings, the prospective accommodation is modelled to assess its effectiveness to occupy, its efficiency to heat, cool and light and to gauge whether the resultant environment will stimulate innovation and productivity for its prospective occupants”
  25. 25. Some Barriers to Innovation      Finding the right partner Cost Lack of finance- internal & external Lack of qualified personnel Uncertain demand
  26. 26. Key Innovations in Facilities Management
  27. 27. (1). Building Information Modelling (BIM)
  28. 28. (1). Building Information Modelling (BIM) BIM Benefits:  Co-ordination & Collaboration  Easier Maintenance of Building Lifecycle  Greater connection between building designers & end users  Greater customisation and flexibility  Easier conflict detection & resolution  Optimisation of cost  Improved asset database & understanding
  29. 29. Golden Thread GSL will be mandated in 2016 for all central government projects (new build and large refurbishments)
  30. 30. (2). Space Utilisation  Greater analysis of how building assets are being used.  Identification of cost savings as companies downsize operations  More scientific measurements of space utilisation, particularly in building design  A key driver in the design of new properties, particularly within the education sector
  31. 31. (3). Flexible Workspaces  “Hot desking” more common  More flexible shift patterns  Greater home working  Greater focus on enjoyable working environment & the impact on businesses performance
  32. 32. Agile Workspaces
  33. 33. (3). Flexible Workplaces – Media City
  34. 34. 3). Flexible Workplaces – 1 Angel Square
  35. 35. (4). Greater Collaboration/Partnership  Private Finance Initiative (now Public Private Partnerships) with crucial element of building life cycle costings.  Longer term contracts encourage investment  Greater outsourcing  Shared targets and goals & reward schemes
  36. 36. Advantages of Longer Term Contracts  Partnership Approach & Relationship Building  Joint Goal and Target setting  Stability and reliability  Supplier Investment  Innovation in Service Delivery  Reduced Procurement costs  Flexibility in service delivery
  37. 37. (5). New/Enhanced Technology      LED Lighting Voltage Optimisation More integrated Building Management Systems Smart Energy Meters Data Loggers
  38. 38. (6). Outcome Based Contracting “A shift in focus from activities to results and from how a programme operates to the good it accomplishes.”
  39. 39. (7). Sustainability  The ‘Green Agenda’ will grow in importance in the future  Helping customers achieve their Carbon Reduction Commitments  Green Technology, such as biomass boilers, Combined Heat & Power (CHP) systems  Focus on Ethical Trading, Bio-diversity and Waste Management and recycling
  40. 40. (8). Social Media in FM
  41. 41. Most significant FM Innovations? “I think the biggest impact has been the way the new technologies - GPS/Tablets/Social media etc. have been utilised by different organisations to eliminate wasted process and provide smarter service.” Martin Pickard, FM Guru Consulting “The biggest change for me has been the development of the outsourced market. There are a number of suppliers in the industry who now really understand what FM is all about and are providing a service that matches the clients’ needs.” Julie Kortens, Head of FM,Channel 4 “The one area which does look as if it will impact is the advent of Building Information Management systems, albeit that these systems are very much in the infancy and current CAFM technology is not up to speed with it. Iain Murray, Principle Consulting
  42. 42. Five Key Benefits innovation can deliver in FM?
  43. 43. What can stifle innovation?       Price based procurement Short term contracts Lack of partnership/collaboration Mistrust Lack of internal support for FM at Senior/ Board Level Being afraid to take risks
  44. 44. What does the future hold?  More flexible & better utilised workspaces  Buildings designed & built with greater engagement with users and Facilities Managers  Greater outsourcing in a bundled service provisions  Greater building and asset knowledge  Greater focus on larger, leaner FM providers delivering cost reduction strategies  Professionally recognised “Collaborative Working” standards  Longer term contracts  Joint “Innovation Strategies”
  45. 45. 4. Cost Reduction Strategies
  46. 46. 5. Question With the introduction of Tuition Fees how can UK Universities save money on their FM Spend ?
  47. 47. Clashing Priorities
  48. 48. Question So what practical steps can a UK University take in the current climate to improve cost efficiency of their FM spend?
  49. 49. Cost Saving Strategies Testing the Market Reduce Operational Costs Fix not cure Cost Saving Obtain Efficiencies Re-organise Reprioritise capital spend Reduce Service Scope
  50. 50. Practical Steps  Review operational spend: ? Space Utilisation/ mothballing ? Utilities spend and enter new contract with guaranteed savings? ? Reactive spend ? Altering equipment settings ? Reduce courses and spaces ? Maintenance spec reduced ? ? Investment in Capital Expenditure Projects such as BMS, lighting, voltage optimisation
  51. 51. Practical Steps  Review Operational Delivery Model: ? Worth re-procuring both Hard & Soft FM services? ? Altering of shift patterns/opening times. ? Can more services be outsourced? ? Will an integrated FM model a deliver improved costs or de-bundle services? ? Can the delivery be smarter? (Up-skilling people).
  52. 52. Practical Steps  Exploit other revenue streams? ? Attract greater numbers of foreign students to make up shortfall? ? Gain rental income from buildings/sub-let?
  53. 53. University of Liverpool experience The current situation      550 students down in 2012/13. 10% down £1.6 million revenue down. 3no sites mothballed & 1no partially empty. Refurbishment plans put on hold for halls of residences (£250,000) Revision of capital expenditure plans The answer     Ongoing analysis of property usage Selling off of property to raise funds Reduced maintenance (statutory only) on under used buildings Targeted attraction of foreign students (Chinese)
  54. 54. 5. Careers
  55. 55. Careers In FM An excellent source is: The guide specifically deals with: 1. What is FM 2. Career Paths 3. Qualifications 4. Skills 5. Company Profiles
  56. 56. Common Twitter Hashtags
  57. 57. My advice 1. 2. 3. 4. 5. Research the market you want to work in & seeks the views of others Identify your personal strengths Identify what potentially excites you about FM Build good networks through social media & BIFM Be different, distinctive & sell yourselves, “what benefits could you bring to an organisation” And finally “persevere lad…. you’ll get there.”     Take the knocks Be flexible Stay positive Move on
  58. 58. And Finally……Do keep in touch Whitbagsinfm @Whitbags http://whitbagsinfm.wordpress.com
  59. 59. 6. Questions & Answers