Category Archives: Facility Management Consulting

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Challenges in transitioning to green janitorial services from conventional cleaning

Why Green Janitorial Service is essential to business?

Post-pandemic, facility occupants across Gen X, Y (Millennial), and ‘Zers are conscious of business operating practices that adversely impact health and environmental ecosystems. Beyond the need for compliance with local statutory and regulatory guidelines, investors, brand image for social responsibilities, and overall optimised business operating costs call for operating practices enhancing health and environment protection measures. Transition to Green Janitorial service from the conventional regime is given for business image and sustainability.

Economic, Social and Governance Drivers for Green Janitorial Service –

Successfully implementing a Green Cleaning regime requires overcoming common challenges.

To overcome the challenges listed, it is essential to design and implement tailored solutions that meet the unique requirements of each building’s application, including Energy Efficiency Assessment, Building Carbon Footprint Assessment, and Building Indoor Environment Quality Services.

Policy, Processes, Practice, and Profit

Policy, practice, and profit are critical elements of an environmentally friendly janitorial service regime.

Policy

Developing policies aligned with ‘Environmental Sustainability’ principles and complying with Green Cleaning standards, such as GS-42 or other equivalents, is essential to fostering an environment-friendly Facilities Management service. The successful implementation of sustainability objectives can be determined by a Service Level Agreement (SLA) with service providers for a commercial or institutional building, encompassing Energy Efficiency Assessment, Building Carbon Footprint Assessment, and Building Indoor Environment Quality Services.

Processes and Practices

A robust janitorial plan requires a governing standard and effective process. This ensures a clean, safe, organised space that promotes productivity and well-being. Developing site-specific processes, adapting them, and standardising critical elements of janitorial services is crucial for ensuring the best outcomes, including Energy Efficiency Assessment, Building Carbon Footprint Assessment, and Building Indoor Environment Quality Services.

As a good practice, when procuring cleaning materials, priority should be given to those that adhere to environmentally friendly guidelines and standards. Only cleaning products certified by globally recognised ecolabel certification programs, such as the Eco Global Label (NSO-NAP 3 standard), Green Seal Environmental Standard for Cleaning Services (GS-42) or EU Ecolabel, should be used. These products must be certified by a recognised institute for easy reference and verification. At least 75% of general-purpose cleaning items should be approved for environmentally safe usage, aligning with Energy Efficiency Assessment, Building Carbon Footprint Assessment, and Building Indoor Environment Quality Services.

When purchasing cleaning equipment, consider eco-friendly options and gradually replace high-impact equipment by assessing its carbon footprint and emissions, in line with Energy Efficiency Assessment, Building Carbon Footprint Assessment, and Building Indoor Environment Quality Services.

Profit

Cost is a paramount factor when considering the transition from traditional cleaning methods to eco-friendly alternatives. Specifically, labour, consumables, implements, and equipment comprise 75%, 15%, and 10% of the total cost of janitorial services. The optimisation of person-hour costs can be achieved through proper training, upskilling, and the efficient application of tools and equipment. Monitoring and analysing industry benchmarks and the facility’s baseline throughout the transitioning process will optimise the usage of cleaning agents. Waste treatment to upcycle or recycle contributes to operational earnings, supporting Energy Efficiency Assessment, Building Carbon Footprint Assessment, and Building Indoor Environment Quality Services.

An efficient green cleaning program must be tailored to the facility’s needs, and the outlined steps will result in a successful transition while keeping costs in check, incorporating Energy Efficiency Assessment, Building Carbon Footprint Assessment, and Building Indoor Environment Quality Services.

Comparison of cleaning agents between conventional and green cleaning methods.

Budgeting for Facility Managers

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Why should Facility Managers be aware of the Planning Operations Budget?

Facility Managers must create an accurate budget plan that meets business objectives and stakeholders’ expectations. They need to understand financial tools, local markets, and management priorities. An effective budget plan is essential for resource allocation, cost control, transparent communication with stakeholders, and cost allocation to critical service lines.

This article comprehensively explains the different approaches to preparing an Annual Budget for Integrated Facilities Operations to facilitate informed decision-making. The primary objective of the Annual Budget is to meet building infrastructure needs while safeguarding stakeholders’ financial interests. The Annual Budget can be categorised into Operation and Capital expenditures, and it is crucial to draft it in adherence to the Service Level Agreement (SLA), using industry-specific methodologies while considering business risk ownership, cost incentives, and impacts. Therefore, it is imperative to carefully consider all factors before finalising the Annual Budget.

Fixed Price
Variable Price
Guaranteed Maximum Price
Cost plus
Pass through
Performance-based
Rolling Forecast Budgeting

To establish a dependable baseline for operational expenses, it is imperative to conduct an analysis of both day 0 estimation and past trends of operating spending. In addition, it is vital to consider industry benchmarks, revenue, and functional requirements. This comprehensive approach will allow for an accurate and realistic assessment of operational expenses, which is crucial for effective financial management. By utilising these factors, businesses can optimise their spending, identify areas of potential cost savings, and make informed decisions regarding their financial strategy. Therefore, it is highly recommended that organisations prioritise the analysis of these variables when creating an operational spending baseline.

Fixed Price

The fixed price elements usually include monthly fixed maintenance charges (— /sqm) and other mandatory costs stipulated in the Service Level Agreement.

Variable Price

The category of Variable Price for service line elements entails annual costs that vary depending on occupancy, business operations, seasonal changes, occupants’ needs, and other independent variables. Statistical tools and science-based initiatives are employed to accurately predict costs and cost performance indicators, utilising past trending information, including anticipated inflation. This approach enables organisations to determine the optimal allocation of resources and enhance overall cost-effectiveness.

Example-

Monthly Energy Consumption (MWh) = b₀ + b₁x₁ + b₂x₂ + b₃x₃ + e

Independent variables – x₁, x₂, x₃

Constants – b₀, b₁, b₂, b₃

Residual – e

It is imperative to consider the derived value of the ‘significance F’ and P to ensure the fitness of independent variables in regression analysis. It is recommended that these values be maintained below 0.05 (< .05) to ensure the accuracy of the analysis. It is imperative to evaluate the p-values associated with the independent variables: the average monthly temperature in an outdoor setting, monthly footfall within the building, and business operating hours.

Example – Linear Regression Analysis

(The ‘Footfall/month’ P-value in the building is greater than 0.05, so it is not considered in the revised energy consumption projection.)

Guaranteed Maximum Price (GMP), Cost Plus (CP), and Pass-through (PT)

A service-level agreement defines the pricing mechanism for service line elements based on GMP, CP, or PT.

The GMP approach calls for applying statistical tools with due consideration of the client business operating culture, operations efficiency, industry benchmarks, local demographic influences, other independent contributing factors, and customer satisfaction survey outcomes. GMP will include both ‘Fixed’ and ‘Variable’ budgeted estimates within the mandated Guaranteed Maximum Pricing. The absorption costs attributable to prevailing CPI beyond the inflation threshold must also be factored into the GMP estimation.

Example

The cost adjustment is determined by considering the annual CPI inflation rate, which typically falls between 2% and 3%. Furthermore, a budgetary adjustment of 1% is also taken into account.

Various auxiliary services such as Medical Center, Training, specialised Cleaning, Catering, Event Management, Procurement, and Transport can be classified under the CP and PT categories. Adopting a Zero-based budgeting approach is highly recommended for projects under the cost-plus category. In the event of proposing new initiatives, it is essential to provide a Capital Investment Note that adequately addresses issues pertinent to the capital requirement and sourcing, Return on Capital employed (average of year 1-3), and financial sensitivity analysis, such as IRR, NPV, or EBIT margin. Ensuring that the Capital Investment Note includes a thorough economic sensitivity analysis to assess the feasibility, risk management, and potential profitability is crucial.

Performance-based

The performance-based budgeting process is strategically designed to motivate the accomplishment of business objectives, including innovation, improvement, and cost optimisation within an organisation. Establishing service level agreements (SLAs) with measurable performance indexes, outcome-based rewards, and penalties for service providers is a significant component of this approach. This methodology allows organisations to align their budgetary planning with their overall business objectives, ensuring that all stakeholders work toward a common purpose and that resources are allocated effectively. Implementing performance-based budgeting can help organisations achieve their long-term goals while promoting transparency and accountability.

Rolling Forecast Budgeting

The rolling forecasting model represents a valuable tool for change management processes in budget planning. This method considers the impact of market pricing fluctuations and the reallocation of budgeted amounts to priority cost heads. Such estimates are obtained through a meticulous application of statistical and financial techniques. The model holds great promise in optimising budgetary allocations, ensuring their efficacy, and contributing to sound decision-making practices.

Common pitfalls in ‘Annual Budget Planning’

Successfully planning an annual budget necessitates a comprehensive understanding of financial tools, management expectations, and objectives. To avoid common errors, meticulous attention to assumptions and estimations, diligent monitoring of expenses, continuous analysis of expenditure trends, end-use feedback gathering, and periodic assessment of the ‘Facility Condition Index’ are required.

Common pitfalls in this process include deficient forecasting due to inadequate historical expenditure data and prevailing market pricing, alterations in business operations throughout the financial year, insufficient contingency amounts, poor communication and collaboration among stakeholders, and inadequate comprehension of operational sustainability.

Carbon Performance Assessment

Case Study : Carbon Management

Case Study: Operations resource planning and budgeting for Office Facility Management

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Overview:
Operations resource planning can be daunting for a facility manager, especially for a newly constructed corporate office facility with a footprint of over one million square feet. In this case, the Facility Manager should collaborate with the property owner, investors, end users, and other stakeholders to plan and estimate resource allocation and budgeting. The facility manager can implement sustainable solutions and ensure a comfortable work environment by carefully focusing on the business objectives, environmental boundary coordinates, and end users’ needs.

Context:
The office facility has been constructed to centralise operations across various regions at a single location, following the business’s sustainability policies and principles. Currently, the built facility operates at 70% of its designed capacity. A professional team has been awarded a service contract to manage and oversee ‘hard and soft’ services, which include cleaning, operational maintenance of amenities, event management, fleet management, landscaping, management of residential units, technological spaces, building maintenance services, ground maintenance, and environmental, health, and safety management.

Approach to Resource Planning and Budgeting in Facility Management:

We developed a facility management framework intricately designed to synchronise operational metrics with overarching business objectives. This comprehensive framework hinged on several key determinants:

1. Strategic Factors: Service needs criticality, determining systems criticality, impact of potential failures of critical systems, occupancy rates, usage patterns, resource availability, cost-effectiveness, and brand reputation are paramount considerations.
2. Resource Planning Metrics: Our methodology comprised assessments of resource specificity and availability, logistics bottlenecks, regional property benchmarks, operational metrics, and predictive analysis of space, energy, water, waste management, and staffing requirements.
3. Budget Estimation and Variance Analysis: We establish pre-start budgets as baselines, gauging variances using real-time inputs and conducting rigorous analytical reviews. We then use statistical methods to analyse the influences of independent variables, including business needs, seasonal fluctuations, building occupancy levels, and operational space, on resource demands such as person-hours, specialised skills, energy, water, waste, consumables, and equipment.
4. Data-Driven Efficiency Improvements: We leverage real-time data analysis to identify intervention opportunities to enhance energy and water efficiencies within the building infrastructure.
5. Stakeholder Engagement and Key Performance Indicators (KPIs): Periodic Customer Satisfaction surveys conducted after occupancy and collaborative workshops and dialogues help us set KPIs that align with our business policies and strategies.
6. Lifecycle Cost Analysis: Critical high-cost elements undergo rigorous lifecycle cost analyses, particularly in retrofit engineering interventions, digitalisation, and energy efficiency enhancement programs.
Our meticulous resource planning and budgeting approach ensures alignment with business goals while continually seeking innovative ways to optimise efficiency, sustainability, and operational effectiveness.

Resource Allocation:
Resources were categorised under three heads, Man-hours, Consumables, and Equipment, to operate and maintain the property and facility. Functional portfolios were allocated resources to support service-level requirements and end-user customer satisfaction. Detailed task analysis identified required person-hours and skill sets, in-house capabilities, and opportunities for operational efficiency improvements across portfolios. Careful consideration of implementing digitised tools into operations and maintenance services improved operations transactions and quality for clients. The target of resource optimisation was achieved by 20% compared to traditional industry practice.

Budgeting:
We used a zero-based budgeting approach for cost elements, including energy, staffing, repairs and maintenance, annual maintenance contracts, amenities services, environmental and safety audits and certifications, parking management, and property taxes. By collaborating with stakeholders and conducting workshops to deliberate on avoidable resource inputs and cross-functional service delivery models, we reduced fixed and variable occupancy costs by 10% per unit.

In response to the evolving business landscape and the paradigm shift catalysed by the pandemic, stakeholders like Property Owners and Investors are poised to embrace a transformative approach to Facility Management Services. At SL Consulting Services, we recognise the imperative need to redefine quality management programs, aligning them with sustainability principles and subsequent environmental and economic viability targets.

Our Focus Areas
Project Management:

Challenges:
• Absence of Facility Service Team input during design, construction, and transition phases.
• Design-centric quality controls overlooking end-user experiences.
• Lack of Facility Management perspective in Reliability, Availability, and Maintainability studies.
Value Proposition:
Our Facility Services expertise revolves around achieving Quality, Safety, Time, and Budget targets. We offer seasoned Facility Managers dedicated to addressing stakeholder needs, ensuring system commissionability, and developing robust policies.

Environmental Services:

Challenges:
• Lack of holistic, sustainable property maintenance approaches.
• Limited awareness among the Facility Service Team regarding ecological impacts.
• Inadequate assessment of environmental, life safety, and economic impacts.
Value Proposition:
Our Environmental Services team leverages practical experience and international standards to deliver cost-efficient, sustainable solutions. We aim to enhance your operations by ensuring methodical efficiency and productivity improvements. Our key focus for sustainability transformation involves preparing for third-party certification audits from globally reputable institutions.

Building Performance Management:

Challenges:
• Insufficient focus on life cycle cost efficiency.
• Lack of predictive and proactive maintenance practices.
• Inadequate Occupants’ Satisfaction Surveys.
Value Proposition:
Building Performance is crucial for a conducive business environment. Our initiatives focus on enhancing infrastructure, indoor environmental quality, and occupant satisfaction, improving efficiency across Environment, Energy, and Operations.

Facilities Operations Management:

Challenges:
• Moderate to poor competency levels within Facility Operating Teams.
• Non-compliance with statutory and regulatory requirements.
• Limited awareness of sustainability and global best practices among stakeholders.
Value Proposition:
Modern facilities demand strategic agility in operations. We offer expert guidance to enhance Facility Operations teams’ skill sets, fostering awareness and a proactive attitude.
At SL Consulting Services, we stand ready to support your transition program, maximising output from short and long-term improvement projects. Our collaborative and strategic approach ensures your facility management processes align with the dynamic needs of modern businesses.