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Inspiring facility managers everywhere with informed opinion, practical advice and useful resources

Efficiency effort

In his third article in the ‘F’ Word series Martin Pickard focuses on the contribution of facilities managers to the efficiency challenge through implementing lean management methods, improving workspace design and energy use, and by providing the inspiration and skills for working smarter

ANY REVIEW OF THE FACILITY MANAGER’S ROLE in business is going to include a discussion on efficiency. My dictionary has several good definitions of efficiency but my favourite is “The production of the desired effects or results with the minimum waste of time, effort or skill”.

It is interesting to note that few definitions of efficiency refer directly to cost, focussing instead on results, effort and effectiveness. Strange then that when we hear the word used in a business context we always assume that some kind of cost cutting initiative is in mind. Even the Government contributes to this deviation. The website of Office of Government Commerce has many pages dedicated to ‘efficiency’, by which they mean the £21.5bn cost reduction target being forced across the public sector.

All organisations, public or private would like to be more efficient if this means to spend less money while increasing output or income, to make better use of resources or increase the value of assets without impacting on operations, and to eliminate all forms of waste. This is exactly what FM is designed to do. The whole point of integrating built environment multidisciplinary activities is to achieve an improved performance over that achieved by a disintegrated approach. Effective FM will have a positive effect upon cost but also the better use of space and energy, and the reduction of waste.

Lean management

‘Muda’ is a Japanese word for things that add no value. The Lean Manufacturing philosophy developed by Toyota is focussed on the identification of Muda and the elimination of such waste through continuous improvement processes like Kaizen and Total Quality Management. This approach is credited with Toyota’s remarkable performance in the years since the Second World War.

These concepts have been embraced by many other business sectors under the general term Lean Management and are very appropriate to the facilities mode of operation. The philosophy focuses on eight kinds of waste:

Of all the costs affecting the workplace, real estate is by far the greatest with costs representing around 75 per cent of total occupation expenditure. Although rent, or equivalent capital charging, and local taxes account for most of this, many other FM costs like cleaning and heating are directly related to the amount of space occupied. The FM who can achieve just a small percentage reduction in footprint may be able to deliver cost savings or avoidance well in excess of softer targets like catering subsidies or stationery.

Space saving

The typical occupation pattern of British offices is inherently wasteful with buildings lying unoccupied for more time than they are actually in use. Even during the working day the traditional allocation of one desk per person means that upwards of 40 per cent of workstations are empty at any given moment in time. With an average workstation in the UK costing around £10,000 per annum, and much higher in cities like London, this under-utilisation represents a huge opportunity for the efficient facility manager. Space saving initiatives like hot-desking, hotelling and so on are all based around that simple opportunity and can produce huge savings.

The use of new technology, the introduction of home working and the creation of flexible access sites called iWork Cafes by Sun Microsystems led to an enormous reduction in their demand for space. Globally they claim a saving of nearly £40m in property costs as a direct result.

No self respecting FM can afford to ignore the opportunity that even simple desk sharing has to offer. If a team of ten can share nine desks that is a 10 per cent saving in property costs and money all the way to the bank.

Good FM can reduce costs in the same way that doing anything properly is more efficient than not doing so. Smarter systems and processes, the application of expert knowledge, robust procurement and well cared for assets will reduce costs. The achievement of cost reduction targets beyond this basic step means that big questions have to be asked. Obviously the easiest way to cut costs is to stop doing things. Do you really need the rear staircase cleaned every night? Does the reception have to have fresh flowers every day? Should the whole workforce be allowed an endless supply of free coffee?

While this kind of cost cutting may not be popular it achieves the desired result immediately and in an organisation where frugality is a cherished value such actions can be symbolic. The cost of the services provided by FM is directly related to their quality. There is no efficiency in providing four star service in a two star environment.

Most FMs outsource some part of their activities. Faced with a serious cost reduction target it may be a more cost effective option to take services back in-house. If outsourcing occurred some time ago, the gains from restructuring, retraining and other initiatives introduced by the provider will now be embedded in the service. It may be possible with some services to maintain such savings while insourcing and thus avoid the additional cost of overheads and profit.

Those who decide to maintain an outsourced position should consider carefully the introduction of some sort of cost reduction incentive. Back in 1987, Wandsworth Council is credited with introducing a shared savings scheme to their refuse contract that set a pattern for incentive based contracts which is now widespread but not universally adopted. Carrots are far more effective in changing behaviour than sticks and the process of incentivising the supply chain to find savings for you depends heavily on giving them a fair share of the spoils.

Many FMs forget that the profit margin being earned by many FM companies is now a low single figure. That means that a bonus which may be just a tiny percentage of the contract value can represent a disproportionately large increase in profit to the supplier. Shared savings schemes linked to appropriate quality performance management processes will yield results.

Energy wasted

The Carbon Trust estimates that British business wastes as much as 30 per cent of its energy. It is obvious that saving energy makes an immediate difference to the organisations bottom line. Recent research by Computacenter estimated that the UKs top 200 companies waste over £61m p/a through running power hungry PCs on idle overnight.

The FM is at the forefront of the energy efficiency battle by getting staff or security to turn off PC monitors and non-essential equipment at evenings, weekends and bank holidays, reviewing the lighting arrangements to reduce widespread and unnecessary glare, ensuring good equipment maintenance and making small adjustments to timers and thermostats, and working in partnership with your maintenance people to optimise performance of your plant.

FM may have suffered in the past from a poor image as insensitive cost cutters, but there is an important role to be played in creating an efficient and effective workplace. By the proper application of sound management practice coupled with our professional expertise we can and do make a significant contribution to “The production of the desired effects or results with the minimum waste of time, effort or skill”. Make this your mission and show how good facilities management really does matter.