Survival of the Facility Managerfmcc-workplace.com/httpdocs/Slides/20140626...powerful force in the...
Transcript of Survival of the Facility Managerfmcc-workplace.com/httpdocs/Slides/20140626...powerful force in the...
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Survival of the Facility Manager
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Vision StatementThe FMCC is the resource and voice for Facility Management Consultants worldwide to leverage
our collective expertise to benefit IFMA members, and the Facility Management profession.
Mission StatementTo serve as a global Facility Management
consultants' resource and representative for Knowledge Sharing, Networking and Business
Opportunities in support of our impact upon the built environment and value to their clients..
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How We Can Help
Ask the Expert
Find a Consultant by Location & Expertise
Locate a Speaker
Online Educational Resources
fmcc.ifma.org
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Today’s PresentationModerator: Joshua Amos, Components Liaison
Presentation Title: Survival of the Facility Manager
Presenter: Dean Kashiwagi, P.E., PhDDirector, ProfessorIFMA FellowCIB W117 CoordinatorFulbright Scholar
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Presentation Logistics• Polls will be used throughout the webinar
• Q&A at the end of the presentation
• Quick survey at the conclusion of the Webinar
• PowerPoint & Recorded Webinar will be available online via FMCC’s Website (fmcc.ifma.org)
• Your Participation is Greatly Appreciated!
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Learning Objectives1. 30,000 ft. approach (leadership
perspective)
2. Strategies to minimize costs & risks
3. Use of performance measurements
4. How to bring value to your organization
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Presenter Bio• It is our pleasure to introduce our speaker today,
Dr. Dean Kashiwagi. He’s inspiring, engaging, and tireless best value expert, educator and researcher for more than two decades. He’s also a respected adviser and mentor within the association, the public sector, and academic circles. He is credited with establishing FM programs at six universities around the world. A powerful force in the Greater Phoenix Chapter of IFMA, as well as Arizona State University, he has championed programs to advance the FM profession, and prepare the next generation of FM’s. Please welcome IFMA Fellow Dean Kashiwagi.
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FM’s World• Cut cost
– Utilize expertise to minimize cost instead of cutting cost by management, direction and control
• Be knowledgeable to minimize risk– There is too much to learn, environment is
changing too quickly– Inaccurate information [marketing is overcoming
fact]– Not sustainable today or in the future
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Traditional Model is not sustainable
• Technical details will kill the FM• “Human Issue” is still there• Too much work, too reactive, dog eat dog• No time to learn or think or relax• This is not a sustainable quality model
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Innovation• Stop the legacy model• Being the expert and requiring FM to make
decisions, manage, direct and control [MDC]
• Use innovation to increase value, minimize cost and have an impact
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Innovation in the Netherlands
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Crowne Plaza Hotel Amsterdam City Centre
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Crowne Plaza Hotel Amsterdam City Centre• 20 minutes from airport; more convenient, comfortable, easier,
economical and faster than taxis• 5 minute walk from Amsterdam Central Station• Access by train to all cities• International Hotel Group Platinum member for Crowne Plaza Hotels• Cleanest, most comfortable beds, convenient power outlets• 24 hour access to “lightly used” gym with brand new unused sauna• Areas to give presentations and give certification exams• Free, fast internet for multiple users• Access to Genkis [15 min walk]
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Perceptive Greeter at Crowne Plaza Amsterdam City Centre
• Melissa Grauwde• Has been “checking in”
attendant for last three years• Promoted to Guest Relations
[taking care of valued guests]• Memorized my name for the
past three years; always greeted me by name [twice a year guest]
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Tremendous Value at the Crown Plaza Amsterdam City Centre
• Arrived at 7:30 AM• Greeted us, and immediately
looked to take care of us• Put us into an upgraded room until
my designated “upgraded and large” room was ready so we can shower, nap and work [she reserved based on my previous customer satisfaction response]
• Complimentary breakfast for the day if we were hungry [we do not check in until the evening]
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Value and Performance• Five year customer: 10• Platinum upgrade: 10
• Customer care and satisfaction: 10
• Access to other cities & airport: 10
• Quality, size, cleanliness of room: 10
• Quality of bed: 10
• Power support for electronics: 10
• Internet support: 10• Breakfast: 10 • Gym: 10• Sauna: 10• Closeness to Japanese • buffet Genkis: 10
• Overall Rating: 10+
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Conclusion• I will be staying at Crowne Plaza City
Centre for all visits due to the “best value” approach
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Strategy to Minimize Cost• Use transparency to remove all silos• Everyone in the supply chain becomes the
resources of FM• Minimize the need to manage, direct and
control [MDC]• Utilize expertise to minimize cost, create
transparency, and have a major impact• Become responsible for even more
organizational functions
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$13.3M Research, 20 years, 1700+ tests, 98% Satisfaction
180K 170K
380K
290K
460K
330K
1.01M
480K430K
120K
370K
560K
650K570K
870K
1.04M
950K
1.33M 1.31M
700K
1.08M
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Am
ount
Aw
arde
d (M
illio
ns)
Year
Started: $180KTotal to Date: $13.3MAverage Yearly % Increase: 28%Total % Increase: 567%Number of Grants: 295
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Best Value Research#1 Worldwide
Construction Projects 1,622Construction Projects ($) $4BNon-Construction Projects 95Non-Construction Projects ($) $2BProjects on Budget 96.7%Projects on Time 93.5%Largest Awarded Client ASUTotal $ Award to Date at ASU $1.7BTesting in Number of States 31
Testing in Number of Countries 6
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• Over-management of vendors• Procurement and execution takes
too long [12 years]• Infrastructure repair is critically
needed [drivers spend 1-2 hours on road going and coming]
• 16 project, 6 awards, $1B test of best value PIPS
• Goal is to finish 10 projects in 3 years
Dutch Implementation
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• Program results: 15 projects finished (expectation was 10)
• Delivery time of projects accelerated by 25%
• Transaction costs and time reduced by 50-60% for both vendors and client
• 95% of deviations were caused by Rijkswaterstaat or external [not vendor caused]
• NEVI , Dutch Professional Procurement Group [third largest in the world] adopts Best Value PIPS approach
• Now being used on complex projects and organizational issues
• Concept in entrie supply chain including engineers, risk/project managers
Results
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Project/Risk Management• RISNET will rewrite the risk model• Risk: what the expert cannot control• Transparency minimizes risk• Engineering practice
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Mission: Increase quality of environmental engineering servicesTimeline: 1 year
Projects: • Yuma: Air Quality• ASRAC: Water Quality• Brownfields: Waste Management
Executive Team:• Teena Ziegler• Erik Massey
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Canadian Efforts– University of Alberta– University of Ottawa– University of Manitoba– Wilfrid Laurier University– Queen’s University– University of Waterloo– Western University– Dalhousie University– Simon Fraser University– City of Spruce Grove– Alberta Infrastructure
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Education/Research August 2014
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Observation/Logic over 20 years and 1,700 tests
• Utilization of expertise is the only real way to minimize cost
• MDC leads to low performance and minimum standards • Concept of control of contractors is not effective• Utilization of expertise and transparency is the only way
to minimize risk• Project non-performance is not a technical engineering
or construction issue that can be resolved by construction technical expertise
• Hire based on expertise [system to measure]28
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Industry Structure
High
I. Price Based
II. Value Based
IV. Unstable Market
III. Negotiated-Bid
Wrong person talkingManagement, direction, and controlNo transparency
Buyer selects based on price and performanceVendor uses schedule, risk management, and quality control to track deviationsBuyer practices quality assurance
Perceived Competition
Perf
orm
ance
Low
High
Minimized competitionLong termRelationship basedVendor selected based on performance
Utilize Expertise
Manage, Direct and Control [MDC]
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High
Low
Owners“The lowest possible quality
that I want”
Contractors “The highest possible value
that you will get”
Minimum
MDC Systems Create Confusion, blindness, and reactivity
High
Low
Maximum
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Utilization of Expertise
Expertise
MediumTrained
Vendor XCustomers
OutsourcingOwner
PartneringOwner
MDC Environment
MinimalExperience
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“No control”• Control and influence increases risk and
transactions• Decision making accompanies MDC• Cannot override natural laws• We cannot control people
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Use Experts with expertise• Minimize cost by seeing into the future• Understand people and risk that they
cannot control• Risk mitigation through transparency• Metrics create transparency• Create environment that makes the
experts better
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Plan• Detailed schedule from beginning to end• Expertise used in areas where there is
insufficient information [II]• Risk that cannot be controlled [Risk]
Deliverables[metrics]
Milestones [metrics]
[II]
[II]
[Risk] [Risk]
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Model of the Future: Performance Information Procurement System(details documented in manuals at pbsrg.com and ksm-inc.com)
Expertise identified by natural law
BV expert’s proposal must be acceptable to user
Expertise is utilized
Identify expertise
DominantSimpleDifferential(non-technicalperformancemeasurements)
Clarification Technical reviewDetailed project scheduleResource & Man- power scheduleExpectation vs. delivered
Risk Management using metricsQuality ControlQuality Assurance
SELECTION CLARIFICATION/PRE-AWARD
Execution
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SYSTEM CREATED TO ASSIST PEOPLE TO SEE
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System Created to Increase Value and Performance
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BV Concepts Optimize Behavior
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BV Environment Changes People• Tested concept in Kashiwagi
family• Now testing in ASU honors
program• Optimizes behavior through
simplicity, natural laws and transparency
• Minimizes negative behavior [depression, drugs, instability, suicide]
• Creates vision
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Case Studies• Contractors in Hawaii become experts• Contractors increase profits and finish faster• “Blackballed” contractor turns into performer in
BV structure• Goes bankrupt when exposed to traditional
environment• BV contractors deliver at much lower costs
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Transparency• Simple• Communicate in form of metrics• Does not require “trust”• Accountable• Forces pre-planning• Goes against human nature
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Impact of MDC • 10 – 30 % cost increase• Vendor profit is minimized by 50%• No motivation to increase quality and
value• Reactive behavior• Silo based mentality
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Metrics• Create transparency• Form of communication• Increase capability• Controlled by experts and used for
continuous improvement
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Project Requirement/Intent• New laboratory construction• Intensive mechanical systems, clean room
environment• Fast track project• University campus
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Project Capability SubmittalClaim: best project manager in company, does only clean room projects, best in the Midwest areaVerifiable performance metrics:1.last 10 years2.20 clean room projects3.scope $50M4.customer satisfaction 9.55.cost deviation .1%6.time deviation 1%
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Continual Performance Documentation
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Overall MEDCOM Performance by NTP 2007-2011
Completed Projects NTP 2007 NTP 2008 NTP 2009 NTP 2010 NTP 2011
# of Projects 110.00 129.00 122.00 92.00 27.00
Original Awarded Cost ($$) $181,945,282.27 $177,275,551.80 $183,989,041.03 $107,091,486.62 $16,278,439.41
Final Awarded Cost ($$) $193,881,007.60 $187,844,708.77 $192,602,961.59 $110,952,677.38 $16,352,909.79
Total Over Budget ($$) $11,935,725.33 $10,569,156.97 $8,613,920.56 $3,861,190.76 $74,470.38
Total % Over Budget 6.56% 5.96% 4.68% 3.61% 0.46%
% due to owner 4.58% 5.59% 3.61% 2.36% 0.46%
% due to Designer 0.00% 0.14% 0.00% 0.21% 0.00%
% due to contractor 0.11% -0.17% -0.01% 0.08% 0.00%
% due to unforeseen 1.88% 0.40% 1.09% 0.96% 0.00%
Total % Delayed 51.56% 48.43% 36.77% 28.53% 3.31%
% due to owner 41.38% 39.96% 28.51% 16.53% 9.20%
% due to Designer 0.00% 0.49% 0.00% 1.32% 0.00%
% due to contractor 1.86% -0.02% 1.29% 0.12% -6.40%
% due to unforeseen 8.32% 8.01% 6.97% 10.56% 0.51%
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Owner Causes Most Project DeviationsBest Value PIPS records sources of all deviations
PIPS creates transparency
PIPS allows vendors to identify and mitigate risk that they do not control
PIPS forces client and buyer to be more accountable
General Overview
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Total Number of Projects 399 1 8 21 10 3 355 1Total Awarded Cost ($M) $434.88 $0.19 $37.81 $17.24 $5.07 $29.50 $332.70 $12.36 Projects where BV lowest cost 54% 0% 83% 42% 33% 33% 55% 0%Percent Awarded Below Budget 6% 11% 1% 9% -13% 12% 5% 29%
Cost IncreasesOverall Change Order Rate 8.83% - 3.73% 4.04% 1.27% 2.54% 10.16% 4.53%Client 7.61% - 2.15% 1.08% 0.33% 0.34% 8.83% 1.16%Designer 0.69% - 1.68% 2.07% 0.63% 1.57% 0.33% 2.55%Contractor 0.01% - -0.21% -0.17% 0.00% 0.00% 0.01% 0.21%Unforeseen 0.52% - 0.12% 1.06% 0.31% 0.63% 0.51% 0.62%
Schedule IncreasesOverall Delay Rate 47.17% - 35.31% 1.59% 16.38% 7.44% 51.68% 12.73%Client 21.92% - 15.26% 0.00% 7.41% 3.93% 24.13% 5.45%Designer 4.47% - 5.69% 1.59% 8.97% 0.00% 4.48% 7.27%Contractor 2.65% - 10.93% 0.00% 0.00% 3.51% 2.42% 0.00%Unforeseen 4.54% - 3.42% 0.00% 0.00% 0.00% 5.04% 0.00%
Satisfaction RatingsNumber of Close Out Surveys 233 0 2 18 0 0 212 1Vendor 9.5 - 9.0 9.9 - - 9.5 8.8Selection Process 9.7 - 8.5 10.0 - - 9.6 10.0
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MEDCOM PERFORMANCE MEASUREMENTS
*Measurements include All Completed Projects Before February 1, 2011
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Overall MEDCOM Performance (Completed Projects) Completed Projects NTP 2006 NTP 2007 NTP 2008 NTP 2009 % Improvement
2007-2008
# of Projects 86 95 106 56
Original Awarded Cost ($$) $146,824,849 $100,760,367 $109,828,790 $48,014,717
Final Awarded Cost ($$) $156,896,978 $106,620,895 $115,480,571.07 $48,676,390
Total Over Budget ($$) $10,072,128 $5,860,528 $5,651,780 $661,673
Total % Over Budget 6.86% 5.82% 5.15% 1.38% 11.52%
% due to owner 5.33% 3.97% 4.55% 1.15% -14.56%
% due to contractor -0.07% 0.15% 0.00% 0.03% 100%
% due to unforeseen 1.61% 1.69% 0.37% 0.19% 78.36%
Total % Delayed 48.62% 44.63% 27.20% 11.35% 39.05%
% due to owner 32.58% 36.79% 26.39% 8.61% 28.27%
% due to contractor 3.22% 0.55% -3.35% 1.58% 100%
% due to unforeseen 12.82% 7.29% 3.81% 1.08% 47.82%
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*Estimated*PROJECT OVERVIEW Without WRR With WRR With WRR & RMP# of Projects 130 274 121Awarded Cost $249,336,707.47 $363,645,708.52 $152,133,643.46 % of Projects on Time 28% 32% 46%% of Projects on Budget 40% 48% 64%% Over Awarded Budget 7.02% 6.28% 3.60%
% due to owner 4.77% 4.20% 3.14%% due to contractor 0.02% 0.06% 0.01%% due to unforeseen 2.23% 2.03% 0.29%
% Delayed 39.1% 37.09% 28.57%% due to owner 25.0% 25.57% 28.75%% due to contractor 3.58% 2.49% -2.77%% due to unforeseen 10.52% 9.03% 2.26%
Completed Project RMP Analysis
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No Project Location Risk # Contractor
1 Replace Shower Pans Ft. Gordon, GA (EAMC) 79.35 E
2 Install Clean Steam Generator Bldg 1425 Ft. Detrick, MD 48.99 B
3 Provide Emerg Power for Medical Data Sys Ft. Lewis, WA (MAMC) 43.12 C
4 RO Water Loop Ft. Detrick, MD 36.47 C
5 Repair Buildings 1776 and 521 Ft. Detrick, MD 26.30 E
6 Repair Wayfinding & Signage Ft. Lewis, WA (MAMC) 21.98 B
7 Electrical System Renewal Ft. Jackson, SC (MACH) 16.68 E
8 ER Treatment Room Repairs Ft. Bliss, TX (WBAMC) 15.97 C
9 Replace Internal Electrical Substations Ft. Detrick, MD 14.87 B
10 Rpr Vet Clinic HVAC, Bldg 2018 Ft. Meade, MD 14.80 B
TOP 10 RISK RANKING PROJECTS 02/04/2011
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Contractor Performance Completed ProjectsA B C D E
# of Projects 54 149 58 25 77
Original Awarded Cost $85,944,851 $165,219,120 $124,400,872 $33,171,047 $61,265,219
% of Projects on Time 39% 37% 49% 28% 53%
% of Projects on Budget 50% 56% 68% 60% 61%
% Over Awarded Budget 3.16% 5.37% 4.33% 0.99% 8.13%
% due to owner 1.72% 4.13% 1.83% 0.00% 7.19%
% due to contractor 0.00% -0.07% 0.00% 0.11% 0.30%
% due to unforeseen 1.43% 1.15% 2.50% 0.87% 0.64%
% Delayed 39.45% 36.61% 16.73% 21.07% 48.68%
% due to owner 30.80% 27.52% 14.03% 11.55% 38.87%
% due to contractor 1.41% 0.51% -2.33% 0.91% 4.68%
% due to unforeseen 7.25% 8.33% 5.03% 8.61% 5.12%
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Contractor Performance On-Going ProjectsA B C D E
# of Projects 6 126 66 23 36
Original Awarded Cost $22,574,598 $297,060,326 $227,713,904 $66,134,627 $84,961,482
% of Projects on Time 50% 34% 26% 48% 31%
% of Projects on Budget 67% 66% 44% 61% 36%
% Over Awarded Budget 3.15% 3.76% 5.72% 2.97% 5.37%
% due to owner 0.49% 2.48% 5.02% 1.50% 3.95%
% due to contractor 0.00% 0.01% 0.00% -0.01% -0.37%
% due to unforeseen 2.67% 0.91% 0.56% 1.47% 1.79%
% Delayed 24.91% 20.62% 30.83% 29.41% 52.77%
% due to owner 2.31% 16.54% 24.55% 11.99% 20.02%
% due to contractor 2.74% 0.76% 0.00% -0.28% 9.08%
% due to unforeseen 19.87% 2.78% 5.68% 17.53% 23.66%
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Risk AnalysisTop risks - $ & Days Impacts
Cause of risk % impact on schedule
% impact on budget Main Source entity
Modification in design/specs/scope 25% 50% Facility/COE
Additional scope of work 15% 29% FacilityNot described 10% 11% UnknownDelay in approval 15% 2% COESub-Contractor issue 3% 5% Facility/ContractorUnknown Site condition 9% 8% UnforeseenChange in schedule 18% 0% Facility/COEContractor generated 6% 0% ContractorMaterial related 4% 0% Contractor/Facility
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CL Performance at ASU
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Business Outcomes Pre MSA MSA (2010) MSA (2013)
MSA Baseline $12.29M $10.81M $11.96M
CL Business Outcomes: Costs
Growth – Out of Scope N/A N/A $1.15M
Value Add N/A $0.43M/yr $0.98M/yr*see appendix for details
Net MSA $12.29M $10.38M $9.83M
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CL Business Outcomes: Reliability & Satisfaction
Business Outcomes Pre MSA MSA (2010) MSA (2013)
# of Major Outages N/K 37 11
% Uptime 99.802 99.989 99.998
Customer Satisfaction 3.6 3.71
(max 4.0)3.81
(max 4.0)
% of Tickets within SLA 94% 97% 97%
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Business Outcomes: TechnologyBusiness
Outcomes Pre MSA MSA (2010) MSA (2013)
% Networksupported
(Not at end-of-maintenance)89% 99% 99%
% 1Gb- Wired Connections 57.0% 71.5% 96.0%
% Wireless(n) 9.0% 8.7% 92.6%
IT Spending Ratio
6/94(New vs. Maintenance)
26/74(New vs. Maintenance)
56/44(New vs. Maintenance)
Includes New GrowthIncludes Wireless-n
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Conclusions• FMs need higher performance at a lower
price• Replace MDC with utilization of expertise• Expert vendors need help to transform
their business • Education and exposure to correct
principles will add value to everyone’s life• FM needs to take its practice to the next
level60
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Effort to Change the Future• FM visionaries [IFMA subgroup]• PM visionaries [PMI and IPMA]• Risk managers [Risnet/CROW]• Procurement visionaries [NIGP/ISM]• Professional services [engineering and
architects]• Expert vendors/services
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IFMA Chapters
• Rocky Mountain (CO)• East Bay (CA)• Atlanta (GA)• Birmingham (AL)• Northern Plains (ND)• Greater Phoenix (AZ)
IFMA 2014 Efforts: Seeking FM visionaries [see us in New Orleans]
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Participant Poll #1
[Text]?
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Q&A
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Best Value Education
Linked [email protected]
Jan 11 -15, 2015Tempe, AZ2014 Best Value Education and Training
PBSRG.comResearch partnerships
Inexpensive training at sitewww.ksm-inc.com
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IFMA Councils• Academic Facilities Council• Airport Facilities Council• Banking Institutions & Credit Unions
Council• City & Country Clubs Council• Corporate Facilities Council• Corporate Real Estate Council /
W.E.• Environmental Health & Safety
Council• FM Consultants Council• Food Service & Restaurant Council
• Information Technology: Council• Legal Industry Council• Manufacturing, Industrial & Logistics
Council• Museums/Cultural Institutions
Council• Public Sector Facilities Council• Religious Facilities Council• Research & Development Facilities
Council• Utilities Council
To learn more visit http://ifma.org/community/industry-councils
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