FUNDAMENTAL CONCEPTS OF FACILITY MANAGEMENT

Definition, History, and Rationale

The International Facility Management Association (IFMA) defines facility management as “a

• 1970s – Facilities management only involves building maintenance and cleaning.

• 1980s – The cost-cutting initiatives of companies led to the outsourcing of non-core services such as
lighting, heating, and plumbing to facility management agencies.

• 1990s – Facilities management added services such as property management, space planning, and
relocation.

• 2000s – Facilities management added business processes such as payroll and human resources.

According to Atkin and Brooks (2015), facility management can also be regarded as a way to create an
environment that is conducive to the organization’s primary processes and activities.

The following describes the rationale of facility management:

1. Support people in their work and enhance individual well-being.

2. Enable the organization to deliver effective and responsive services.

3. Utilize the cost-effectiveness of physical assets.

4. Allow for future change in the provision and use of space.

5. Provide competitive advantage to the core business.

6. Enhance the organization’s culture and image.

The approach to facility management involves the following steps

Develop facility management strategy. This involves strategic analysis, solution development, and
strategy implementation for organizational concerns involving facility management.

Determine sourcing model. This involves assessing the most appropriate model to be used for
company-related activities. The sourcing models include insourcing, outsourcing, and co-sourcing.

Procure the services. This involves facilitating the services of a company through outsourcing or co-
sourcing models.

Deliver the services. This involves mobilization and contract management with the third-party
companies that perform functions or services for another company.

Manage performance. This involves service review and performance measurement related to the
outsourced or co-sourced services of a company.
The following are the key concepts of facility management.

The Informed Client Function. The organization needs to act as an informed client to achieve enduser
satisfaction and best value.

Stakeholder Engagement. The organization must effectively manage its stakeholders or those
individuals and groups with facility-related interests.

End-User Experience. The organization must properly counsel and manage its end-users or those
individuals or groups that will experience the impact of facility management.

Best Value. The organization must be aware of the extent to which best value for money in facility
management can be improved. Best value extends the concept of value for money to imply the need to
strive continually for something superior at the lowest practicable cost.

Operability. The organization must ensure that facility design takes proper account of operational
requirements through a thorough briefing process.

Sustainability. The organization must establish an objective or requirement to optimize operational cost
over its life cycle.

Outsourcing. The organization must identify the cost-effectiveness of obtaining services from within the
organization or outside the organization through third-party companies

Procurement. The organization must consider the acquisition of goods and services from an external
source such as reliable suppliers, which will support the daily operation or activities of the firm.

Performance Management. The organization must ensure that services are provided according to
agreed performance levels.

Management of Change. The organization must consider the minor changes arising in the course of day-
to-day operations and should be capable of minimizing disruption as well as safeguarding business
continuity.

Maintenance Management. The organization must consider the maintenance of the structure, fabric,
building engineering, services installations, fittings, and furnishings that collectively form the facility.

Information Management. The organization must practice proper management of information and
data, which is necessary to comply with statutory obligations and duties, as well as enabling the
organization to derive optimal use and benefit from its facility.
FACILITY PLANNING

According to Atkin and Brooks (2015), facility managers must create an asset plan that includes
management of physical property operations, personnel, and finances

The following are the key elements that facility managers must consider in evaluating real estate
assets.

Legal Document Inspections

Mechanical records. Facility managers must inspect the mechanical areas of the property.

Compliance with legislation. Facility managers must identify if there are any deficiencies that must be
addressed pertaining to building registration and other related government requirements

Building plans. Facility managers must check the complete set of building plans, especially when
alterations are proposed to be made

Physical Property Review

Interior quality. Facility managers must consider the status of cleaning, carpet repair, wall coverings,
ceilings, and lighting.

Foundation and exterior. Facility managers must carefully examine if there are any cracking or other
signs of structural problems in the facility

Vacant space. Facility managers must review if the empty places in the facility are clean or require
additional demolition to make the space marketable.

Market Analysis

Property operations. Facility managers must conduct a thorough review of current management and
leasing personnel.

Tenant feedback. Facility managers must perform tenant interviews.

Atkin and Brooks (2015) stated that companies have options to own or build a new building, lease a
building, or rent a space for the business. A new building can be purposely-built, which means that it
meets all the desired requirements relevant to business operations. A leased building, on the other
hand, can be classified as a long lease (between 7-25 years) or short lease (between 1-7 years),
depending on the discretion of the company. Lastly, a rented space can be classified as a tenant fitted-
out or a space that is ready for occupancy and meets the requirements of the business undertaking,
furnished or a space that is ready for occupancy but does not suffice to the requirements of the
undertaking, or totally serviced workplace or a temporary solution to a space problem

A totally serviced workplace refers to a “ready-to-use” office space that goes beyond the traditional
setup of an office.

The categories of totally serviced space, which suit different organizational demands, are as follows:

Office space. This is ideal in serving a full-time, part-time, branch, project, start-up, or a team demand
for space.
Virtual office. This pertains to the operational domain of any organization whose business does not
require a physical office but a simulated work environment using technology to perform work at any
location.

Disaster recovery. This provides workplace recovery to support business continuity during an incident.

Recommended practices for ensuring space efficiency are as follows:

Maximizing space on the footprint of a new facility. Facility managers must ensure that the total
available space in a new facility is utilized for operational efficiency.

Matching new uses to a refurbished facility. Facility managers must match the operational
requirements of the firm relevant to the provisional spaces of a refurbished facility.

Increasing the ratio of usable to gross floor area. Facility managers must maximize the usable space
area of the facility and ensure that vacant spaces are minimized.

Incorporating design features to support different activities at different times. Facility managers must
ensure that facility design provides relevance and convenience in facilitating the activities of the firm.

Providing space, furniture, and fittings that can be adapted for different activities. Facility managers
must acquire furniture that matches the operational requirements of the firm.

Creating space that mixes open-plan, meeting, and quiet spaces. Facility managers must plan a
provisional space area to accommodate different work settings and requirements.

Providing wireless data access to enable maximum use of common space. Facility managers must
ensure that wireless data or internet connection is available to common spaces of the facility to
maximize operational efficiency

Recommended measures in promoting space utilization and efficiency are as follows:

Appointing a champion/manager for space management and operating costs. This involves selecting a
point person within an organization who will oversee if space requirements and cost efficiency are being
met.

Systematically collecting and updating space utilization and cost information. This involves timely
updating of space utilization procedures of a firm based on changing needs or requirements of the
business to lessen operational cost.

Agreeing with targets and monitoring their achievement. This involves periodic assessment of initial
targets set by the firm relevant to space utilization.

Agreeing with targets and monitoring their achievement. This involves periodic assessment of initial
targets set by the firm relevant to space utilization.

Developing and maintaining a clear decision and communication structure for facility-related projects
and their stakeholders. This involves ensuring that open communication can be facilitated given the
design and features of the facility
Assessing space efficiency through post-occupancy evaluations. This involves assessment of the
effectiveness of a refurbished facility based on the experience of previous occupants through an
interview or survey.

Briefing is the process of communicating the objectives and needs of an owner, or prospective owner, of
a facility to a designer or design team in order for them to prepare the design of a new or refurbished
facility.

Below are the phases in facility delivery life cycle:

1. Design. This involves developing detailed and comprehensive specifications based on the agreed
requirements and design evaluation of a facility relevant to the operational requirements of a firm.

2. Construction and/or installation. This involves the actual building, manufacturing facility, and system
requirements needed in the facility design and management.

3. Testing and commissioning. This involves providing on-site testing, quality assurance, specifications
audit, punch listing, and all other compliance crosschecking of the agreed requirements and/or
acceptance test.

4. Handover. This involves the formal transfer of the product, system, or building to end-user after the
successful testing or commissioning.

5. Start-up of operations. This involves the official utilization of the unit or facility by the end-user for
business as usual operations or transaction.

The steps involved in design and facility management briefing should follow a logical sequence as
follows:

Business case. This involves defining the phases, decision gates or facility considerations, deliverables,
and criteria for determining the progression of facility management related tasks of an organization.

Statement of needs. This involves defining the primary processes and activities of an organization to
understand how the facility can accommodate these processes.

Development of design brief. This is a comprehensively written document developed jointly by the
organization, its professional advisors and the designer or design team, based on statement of needs,
including the business case for the new or refurbished facility

Functional brief. This involves the proposed technical solutions, including the evaluation of options for
satisfying end-user requirements.

Feasibility study. This involves determining the viability of the facility design prior to further progression
in the project.

Design development. This involves ensuring that the information deemed critical to the operation of the
facility is made available to the organization as owner and, where applicable, the operator during
design.

A location decision often occurs when an organization experiences a growth in demand for its products
or services that cannot be satisfied by expansion at an existing location.
The options for location planning are as follows:

Expand an existing facility. This option can be attractive if there is an adequate room or space for
expansion, especially if the current location has desirable features that are not readily available
elsewhere.

Add new locations while retaining existing ones. This option is common in retail operations. Adding a
new location can be a defensive strategy designed to maintain a market share or to prevent competitors
from entering a market

Shut down at one location and move to another. This option is the result of a shift in markets,
exhaustion of raw materials, and rising cost of operations.

Do nothing. This option is the result of a detailed analysis of potential locations which fails to uncover
benefits that make one of the previous three (3) alternatives attractive.

The risks associated with global business expansion as follows:

Political. Globalization has to contend with political instability and political unrest, which can create risks
for personnel safety and the safety of assets.

Terrorism. Globalization has to contend with terrorism, which remains a threat in many parts of the
world. Terrorism will put risk on personnel and assets of a global business.

Economic. Globalization has to contend with economic instability, which might create inflation or
deflation that may negatively impact the profitability of a global business.

Legal. Globalization has to contend with changing laws and regulations that may reduce or eliminate the
key benefits of having a global business.

Ethical. Globalization has to contend with corruption and bribery, which are common in some countries

Cultural. Globalization has to contend with the cultural differences present in different countries.

The general procedure for making location decisions usually consists of the following steps:

1. Decide on the criteria to use for evaluating location alternatives, such as increased revenues or
community service.

2. Identify important factors, such as the location of markets or the raw materials.

3. Develop location alternatives, such as countries or general region for a location, community
alternatives, and site alternatives.

4. Evaluate the alternatives and make a selection.

Considerations of global firms in identifying a country, region, community, and site for global business
conduct:

Identifying a Country
Government. Firms must review the following: policies on foreign ownership of production facilities,
local content requirements, import restrictions, currency restrictions, environmental regulations, local
product standards, and liability laws.

Cultural differences. Firms must review the following: living circumstances for foreign workers and their
dependents, ways of doing business, and religious holidays/traditions.

Customer preferences. Firms must review the local sentiments of the people in purchasing products and
services.

Labor. Firms must review the following: level of training and education of workers, wage rate, labor
productivity, work ethic, possible regulations limiting the number of foreign employees, and language
differences.

Resources. Firms must review the availability and quality of raw materials, energy, transportation, and
infrastructure.

Financial. Firms must review the financial incentives, tax rates, inflation rates, and interest rates in the
preferred country.

Technological. Firms must review the rate of technological change and innovations in the preferred
country.

Market. Firms must review the market potential and competition in the preferred country.

Safety. Firms must review crime records and terrorism threats in the preferred country.

Identifying a Region

Location of raw materials. Firms must locate near or at the source of raw materials for three (3) primary
reasons: necessity, perishability, and transportation costs.

Location of markets. Firms must consider the distribution costs or the perishability of a finished product
in choosing a market location.

Labor factors. Firms must consider the cost and availability of labor, wage rates in an area, labor
productivity, and attitudes toward work, and whether unions are a serious potential problem in a
particular region.

Identifying a Community

Quality of life. Firms must observe the schools, churches, shopping, housing, transportation,
entertainment, recreation, and cost of living on a preferred community.

Services. Firms must observe medical, fire, and police protection on a preferred community.

Taxes. Firms must observe the manner of tax collection if it is directed or undirected to state or the
community.

Environmental regulations. Firms must observe the state and local regulation on sustainable
development.
Utilities. Firms must observe the cost and availability of utilities in a preferred community.

Development support. Firms must observe the bond issues, low-cost loans, and grants being provided
by the local government in a preferred community.

Identifying a Site

Land. Firms must identify the cost, degree of development required, soil characteristics and drainage,
room for expansion, and parking on a preferred site for the conduct of business.

Transportation. Firms must identify the types of access roads and other means of transportation on a
preferred site for the conduct of business.

Environmental/legal. Firms must identify the zoning restrictions on a preferred site for the conduct of
business.

The following are the techniques used in evaluating location alternatives:

Locational Cost-Profit-Volume Analysis. This is the economic comparison of location alternatives.

Transport Model. This involves the movement of either raw materials or finished goods.

Factor Rating. The value of factor rating provides a rational basis for evaluation of location alternatives

Center of Gravity Method. This determines the location of a facility that will minimize shipping costs or
travel time to various destinations

Layout is one of the key decisions that determine the long-run efficiency of operations.

The following are the objectives of layout design:

• Higher utilization of space, equipment, and people;

• Improved flow of information, materials, or people;

• Enhanced employee morale and safer working conditions;

• Improved customer/client interaction; and

• Flexibility in operations.

Considerations involved in layout design:

Material handling equipment. Managers must decide on equipment to be used, including conveyors,
cranes, automated storage, retrieval systems, and automatic carts to deliver and store material.

Capacity and space requirements. Managers must determine the personnel, machinery, and equipment
requirements prior to designing the layout for each component.

Environment and aesthetics. Managers must consider layout decisions such as windows, planters, and
height of partitions to facilitate air flow, reduce noise, and provide adequate privacy among others.
Flows of information. Managers must consider the importance of communication in layout decisions
that involve proximity of office spaces.

Atkin and Brooks (2015) stated the different approaches in layout design as follows:

• Office layout. This positions workers, equipment, and spaces to encourage efficient movement of
information.

• Retail layout. This allocates shelf space and responds to consumer behavior.

• Warehouse layout. This addresses tradeoffs between space and material handling.

• Fixed-position layout. This addresses the layout requirements of large, bulky projects such as ships
and buildings.

• Process-oriented layout. This deals with low volume but high variety of production.

• Work cell layout. This arranges machinery and equipment to focus on the production of a single
product or group of related products.

• Product-oriented layout. This seeks the best personnel and machine utilization in repetitive or
continuous production.

Office layout may be classified into two (2) categories as follows:

Process layout. In process layout, the equipment and employees are arranged according to the
sequence of operations.

Group Layout. In group layout, employees are placed in a separate partition where similar activities are
carried on, and office machinery are fitted with another section

The following are the main objectives of office layout:

1. Effective utilization of available floor space and smooth flow of work;

2. Both power and telephone services are made available whenever necessary;

3. Office supervision is made easier and more convenient;

4. Good working condition is provided to each employee; and

5. Free flow of communication among employees.

The following are the basic considerations in retail layout strategies:

Walking space. The layout must provision a sufficient walking space for the customers. The aisles must
be wide enough to accommodate traffic flowing in both directions.

Flow. The layout must allow customers to enter from the front and be encouraged to walk to the back
of the store.

Eye level. The layout must place products at the proper eye level, which will help improve sales.
Display cases. The layout must strategically place display cases in the retail store since they act as a
countertop customer interaction area.

Warehouse layout is to find the optimum trade-off between handling cost and costs associated with
warehouse space.

The following are the principles associated with warehouse layout

Movement. The layout must provide an uninterrupted movement of materials, people, and traffic
within the building.

Accessibility. The layout must position all products on pallets or transport structures accessible by
everyone without the need to move one product to get to another

Space. The layout must take into consideration sufficient provisions for storage, stock, offices, working
areas, and empty pallet storage among others.

In a fixed-position layout, personnel, supplies, and equipment are brought to the site where the
product will be assembled, rather than the product being moved through an assembly line or set of
assembly stations.

Product version. A house built through the traditional practices of fixed-position layout would be
constructed on site with equipment, materials, and workers brought to the site.

Service version. An operating room is the service example of fixed-position layout wherein the patient
remains stationary on the table or bed, and medical personnel along with the equipment are brought to
the site.

A process-oriented layout can simultaneously handle a wide variety of products or services.

The following are the advantages of process-oriented layouts:

• Flexibility. Process-oriented layout can handle a variety of processing requirements, which facilitate
efficient operation.

• Lower cost. Process-oriented machines are less costly to purchase and easier to maintain than
specialized equipment.

• System protection. Process-oriented machines are not particularly vulnerable to equipment failures
because a wide variety of machines are available in this type of layout.

The following are the disadvantages of process-oriented layouts:

• Utilization. The machines used in process-oriented layout are dependent upon a variety of output
requirements, which is the reason why equipment utilization rates in process layout are frequently very
low.
 • Confusion. The machines used in process-oriented layout requires complex scheduling, which makes
juggling process requirements more difficult

The following are the advantages of work cells:

• Reduced work-in-process inventory since it provides a single flow from one machine to another;

• Less floor space required since fewer provisions are needed between machines to accommodate
work-in-process inventory;

• Reduced raw materials and finished goods inventories since less work-in-process allows rapid
movement of materials through work cells;

• Reduced direct labor cost since work cells encourages improvement in communication among
employees, better material flow, and improved scheduling; and

• Reduced investment in machinery and equipment since efficient utilization reduces the required
number of machines in the production.

Product-oriented layouts are organized around products or families with similar high-volume and low
variety of production.

The following are the types of product-oriented layout

• Fabrication line. This builds components such as automobile tires or metal parts on a series of
machine.

• Assembly line. This places the fabricated parts or built components on a series of workstations.

The following are the ways to effectively and efficiently decide the best layout for flow of product or
process:

Line Balancing. This is the process of assigning tasks to workstations in such a way that the workstations
have approximately equal time requirements.

Parallel Workstations. This is a way in designing product layout wherein processes needed to create a
product are introduced thru boxes that include the duration process.

Systematic Layout Planning (SLP). This qualitatively assesses the desired closeness between
departments or workstations to ideally set up the facility or the layout according to the proximity
preferences for all stations involved.