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Life Cycle and Whole Life Costing
Introduction
The introduction of PFI style procurement methodologies has forced the construction industry to consider the longer term implications of building design. The philosophies upon which PFI procurement styles have been developed require far greater integration of the design, maintenance management and facilities management processes to ensure that the long term Client requirements are satisfied.
Our company can assist the process of developing the Best Whole Life Value solution.
Definition
Life cycle costing is the combination of the capital cost of the facility, planned preventative maintenance costs, reactive maintenance costs, minor and major component replacement costs and, if required, the anticipated disposal value or cost. Whole life costing incorporates all elements of life cycle costing but also includes Facilities Management costs such as cleaning, security, porterage, energy expenditure and telecommunications etc.
Benefits of Life Cycle and Whole Life Costing
Life cycle and whole life costing are investment appraisal tools which consider the value of a construction project over the selected assessment period. The benefits of life cycle and whole life costing are to facilitate the determination of the best value design solution over the assessment period whilst meeting or exceeding the Client’s design criteria. The application of life cycle and whole life cost philosophies will assist in the eventual provision of a functional, easily managed, flexible built environment which will enable the Client to perform their core business activities.
Long term budgetary forecasts are calculated through life cycle and whole life cost assessments facilitating the generation of a sinking fund to cover the costs of long term facilities management service provision, maintenance activities and replacements requirements throughout the life of the facility.
Methodology
Through our extensive experience of life cycle and whole life costing we believe that such assessments should be presented in a transparent manner with auditable backup to demonstrate the methodology utilised and the data sources called upon to generate the estimate. To this end we have established robust modeling systems (within Microsoft Excel) to provide our clients with an auditable report, complete with graphical representations of the discounted cash flow profile over the assessment period, in a familiar format which is simple to understand.
Procurement Strategy ∧ Supply Chain Management
Introduction
The procurement process needs to carefully and accurately identify the clients needs to ensure that any contracts put in place provides good value for money, are flexible if the clients requirements change, and enhance the service level provision provided by the contractor.
Assessment of Operations
- An initial assessment would normally be undertaken to determine the current operations and procedures
- A schedule of pre-arranged meetings with all of the clients staff relevant to the daily operations would be carried out to understand current operations/requirements
- Assessment of existing contracts, sample reports, sample data, spend type analysis
Procedures of assessment will consist of:
- An analysis of spend by trade/category/region etc.
- An analysis of the clients current operational procedures.
- An analysis of the strong areas of the clients current operational procedures.
- An analysis of weaknesses in the clients current operational procedures.
- Recommendations for improvements.
- Establishing required enhancement to contracts.
- Production of new contract documentation.
Methodology
Following the assessment of existing methodology and contracts, the preparation of either revisions to existing or new contracts will commence to allow the incorporation of new philosophies, with particular emphasis on :
- Auditing/traceability.
- Service level compliance.
- Key Performance Indicators.
- Contractors responsibilities.
- Tender new contracts.
- Incentives.
- Contract Terms.
- Value for Money.
- Accurate Scope of Works.
- Targets and KPI’s.
- Procurement Client List.
Strategic Audit & Maintenance Consultancy
Introduction
Over the last two decades Our company has provided maintenance management services to a wide variety of Client organisations, assisting them to ensure that Best Value is obtained through their supplier base.
Whether your requirement is to reduce maintenance cost, improve the quality of maintenance delivered to your properties or a combination of both, our experienced consultants can help you define and implement the maintenance delivery strategy that suits your needs.
Strategic Audit
Our methodology for assisting our Clients in achieving improvements in the delivery of maintenance and repetitive works to their properties commences through a thorough audit of the systems, processes and contracts utilised within the existing maintenance management function. It is imperative that where the existing processes are working well this is recognised and only where further improvements can be reasonably anticipated will recommendations for change be made. The initial audit will be fully independent and report on where the existing processes are working well and where there is potential for improvement. Improvement areas are categorised into the deliverables clearly identifying quick wins.
Service Delivery Improvements
The initial Audit process will often identify improvements in the maintenance delivery structure or the processes employed for maintenance delivery which can be rapidly implemented resulting in “quick wins” for the Client organisation. We have experience of dealing directly with Clients’ existing supplier base to develop and implement value adding maintenance and repetitive works processes providing the Client with greater control of repetitive activities and therefore greater confidence in the management of maintenance expenditure. Our procurement expertise and long and successful history of maintenance cost management ensures the best value solutions are achieved.
Strategic Objectives
The implementation of the initial Service Delivery Improvements should reflect the longer term objectives of the maintenance strategy and, where possible, implementation of the Service Delivery Improvements should build the foundation for any more fundamental changes that may be required to the maintenance delivery structure and processes. By considering both the initial “quick wins” and the on-going strategic changes together, Our company can provide strategic maintenance consultancy advice eliminating duplication of implementation resource.
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