Repair, Replace, or Upgrade?   How to make the right choice     An Introduction to Asset Lifecycle Model     for Total Cos...
How much does it cost?                  $1.00   $3.50www.facplan.com
When does it cost $1.00, or $3.50?                  Just after you buy it,                  before you use it!www.facplan....
What do you do when your car needs major repairs? Repair …                 Go ahead and fix it Replace …             Find ...
How do you shop for a car?        •Dealership visits        •On line research        •Advice from your friendly garage    ...
How do you compare prices for a car?         •Initial price         •Trade in for your clunker         •Cost of ownershipw...
Research by Consumer Reports Where does the money go?                  Ownership costs break down over five               ...
Cost of ownership comparison          “A Toyota Highlander can cost          you $3,000 more to purchase          than a F...
Looking to buy a car? Edmunds True Cost to Own® (TCO) pricing system          http://www.edmunds.com/tco.htmlwww.facplan.com
What about measuring and managing a facility’s useful life?        •Terminology        •Processes and practices        •Me...
Are you asking?                      Do I                  continue to                   repair, or                    sho...
Asset Lifecycle Model                         Source: IFMA publicationwww.facplan.com
The BIG Picture           Contact Garry Brinton for the spreadsheet              gbrinton@facplan.com              717-221...
What are the issues?What data do you need?How do you structure the analysis?www.facplan.com
Resources:www.facplan.com   … and your own data
Total Cost Of Ownership (TCO) by facility lifecycle component         •Space Management         •Project Delivery Manageme...
Asset Lifecycle Model                  Space Managementwww.facplan.com
Space Management Space Planning and Utilization   •TCO per square foot   •Churn rate (# of moves/# of occupants per   year...
Space Management Programming   •Adaptation Index      •Program or mission based condition      •Program requirements/Repla...
Asset Lifecycle Model                  Project                  Deliverywww.facplan.com
Project Delivery Design and Construction   •Cost estimating   •Delivery speed   •Project deliverywww.facplan.com
Asset Lifecycle Model                  Operations                  Managementwww.facplan.com
Operations Management Operations   •Operating cost/SF   •Energy usage   •Replacement value indexwww.facplan.com
Operations Management Planned and Unplanned Maintenance    •PM cost/SF    •Emergency or unplanned maintenance    costswww....
Asset Lifecycle Model                  Capital Asset                  Managementwww.facplan.com
Capital Asset Management Retrofits/Upgrades, Improvements, and Replacements   •Facility Condition Index   •Deferred mainte...
Example of TCO Analysis Need new 25,000 SF office space. Do you… •Repair – Renovate existing space, with hard      walled ...
Comparisons 25,000 SF new office space (TCO), over a ten year period         Repair          $7,610,000         Replace   ...
Summary Total Cost of Ownership    •First costs + lifecycle operating costs Lifecycle Operating Costs     •Space managemen...
Questions?     For more information:         717-221-9700         Garry Brinton (x 122)             gbrinton@facplan.com  ...
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Repair, Replace, or Upgrade

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Repair, Replace, or Upgrade

  1. 1. Repair, Replace, or Upgrade? How to make the right choice An Introduction to Asset Lifecycle Model for Total Cost of Ownership Management Presented by: Garry Brinton Josh Millmanwww.facplan.com
  2. 2. How much does it cost? $1.00 $3.50www.facplan.com
  3. 3. When does it cost $1.00, or $3.50? Just after you buy it, before you use it!www.facplan.com
  4. 4. What do you do when your car needs major repairs? Repair … Go ahead and fix it Replace … Find a similar used car Upgrade … Buy a new (and fancier) carwww.facplan.com
  5. 5. How do you shop for a car? •Dealership visits •On line research •Advice from your friendly garage •Consumer Reports, Car and Driver, other magazineswww.facplan.com
  6. 6. How do you compare prices for a car? •Initial price •Trade in for your clunker •Cost of ownershipwww.facplan.com
  7. 7. Research by Consumer Reports Where does the money go? Ownership costs break down over five years, based on their study of more than 300 vehicles.www.facplan.com
  8. 8. Cost of ownership comparison “A Toyota Highlander can cost you $3,000 more to purchase than a Ford Explorer V6, but owning the Ford after five years can cost $6,750 more.” Consumer Reports, August 2008www.facplan.com
  9. 9. Looking to buy a car? Edmunds True Cost to Own® (TCO) pricing system http://www.edmunds.com/tco.htmlwww.facplan.com
  10. 10. What about measuring and managing a facility’s useful life? •Terminology •Processes and practices •Metrics and/or cost models •Resources and skillswww.facplan.com
  11. 11. Are you asking? Do I continue to repair, or should I replace? Should we move tobetter office What space? information do I need to make the right decision?www.facplan.com
  12. 12. Asset Lifecycle Model Source: IFMA publicationwww.facplan.com
  13. 13. The BIG Picture Contact Garry Brinton for the spreadsheet gbrinton@facplan.com 717-221-9700 x 122www.facplan.com
  14. 14. What are the issues?What data do you need?How do you structure the analysis?www.facplan.com
  15. 15. Resources:www.facplan.com … and your own data
  16. 16. Total Cost Of Ownership (TCO) by facility lifecycle component •Space Management •Project Delivery Management •Operations Management •Capital Asset Managementwww.facplan.com
  17. 17. Asset Lifecycle Model Space Managementwww.facplan.com
  18. 18. Space Management Space Planning and Utilization •TCO per square foot •Churn rate (# of moves/# of occupants per year) •Utilization rate (Occupied space/Usable area)www.facplan.com
  19. 19. Space Management Programming •Adaptation Index •Program or mission based condition •Program requirements/Replacement value •Uptime - Amount of time suitable for the program(s) servedwww.facplan.com
  20. 20. Asset Lifecycle Model Project Deliverywww.facplan.com
  21. 21. Project Delivery Design and Construction •Cost estimating •Delivery speed •Project deliverywww.facplan.com
  22. 22. Asset Lifecycle Model Operations Managementwww.facplan.com
  23. 23. Operations Management Operations •Operating cost/SF •Energy usage •Replacement value indexwww.facplan.com
  24. 24. Operations Management Planned and Unplanned Maintenance •PM cost/SF •Emergency or unplanned maintenance costswww.facplan.com
  25. 25. Asset Lifecycle Model Capital Asset Managementwww.facplan.com
  26. 26. Capital Asset Management Retrofits/Upgrades, Improvements, and Replacements •Facility Condition Index •Deferred maintenance •Capital renewal •Current replacement valuewww.facplan.com
  27. 27. Example of TCO Analysis Need new 25,000 SF office space. Do you… •Repair – Renovate existing space, with hard walled offices and cube farm •Replace – Move to new vanilla space, with same office features, lower rent •Upgrade – Move to vanilla space, with new flexible office furniture and components Contact Garry Brinton forwww.facplan.com spreadsheet link
  28. 28. Comparisons 25,000 SF new office space (TCO), over a ten year period Repair $7,610,000 Replace $7,040,000 Upgrade $6,900,000 …..and there are intangibles (productivity, downtime, attractiveness, etc.)www.facplan.com
  29. 29. Summary Total Cost of Ownership •First costs + lifecycle operating costs Lifecycle Operating Costs •Space management •Project delivery •Operations management •Capital asset management Repair, Replace, or Upgrade scenarioswww.facplan.com
  30. 30. Questions? For more information: 717-221-9700 Garry Brinton (x 122) gbrinton@facplan.com Josh Millman (x 123) jmillman@facplan.comwww.facplan.com

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