Production Information And Bills Of Quantities

Published Date: 02 Nov 2017

Index

Q1

Explain what makes real estate so special when compared to other products of daily life? Name at least five points and describe them in your own words.

Introduction

There are various reasons why a land or property owner, which in this scenario is called a client, may opt to invest in real estate, rather than investing in other sectors. Three of said reasons will be discussed hereunder:

Predictable Income (rent)

Taking into consideration the local situation, there are a various number of properties that are uninhabited, and therefore, rent is a viable option to use. Instead of letting a property deteriorate, a client may opt to put his property for rent, at a stipulated price. However, the owner of the property must make sure that maintenance, taxes, insurance, and security satisfy the contract between both parties.

Other advantages that come with Predictable Income are, ‘fairly predictable income (rent), some form of tax benefit (deprecation or the tax deduction of mortgage interest), and some stability.’ as stated by MicKey, T. (2012).

Stability is achieved from a periodic income through rent, instead of just leaving the property empty. Moreover, renting a property helps reduce volatility and unforeseen risks, as investments that rely on a static income, tend to be less volatile than those that rely more on the capital value return.

Diversification

Throughout the years, it was seen that investment in real estate has been for adapting and the ability for real estate to maintain its purchasing power of capital.

As stated by the National Council of Real Estate Investment Fiduciaries (NCREIF), the market indexes for said real estate industry have shown that there is a low correlation with the returns of stock and bond investments, meaning that real estate investments can undoubtedly increase portfolio diversification.

For additional possibilities of diversification, and risk mitigation potential, repetitive introduction of new real estate products and worldwide chances are necessary. This provides makes it possible for investors to have greater flexibility so as to be able to customise their portion in the real estate asset allocation.

Hedging Inflation

Hedging Inflation Capacity occurs when real estate investment comes from the ability of the owner to increase the rental rates of his property during the inflation periods. Unlike concerns that come from manufacturing and service providers, real estate owners do not have the put up with the demand elasticity, in order to increase prices. However, one must keep in mind that competition with rival properties in the marketplace is inevitable, which in turn might have to raise rates in inflationary periods.

An advantage of real estate is that it tends to maintain the purchasing power of capital, by extending a part, if not all, of the inflationary pressure onto tenants.

Risk Reduction

When taking into consideration the ability of risk reduction in real estate, certain advantages may be identified. The way that properties are leased makes it possible for a less inflation-hedging ability. This means that properties that have a long term occupancy will result in a stable income stream, and a low risk bond investment.

In reality, property returns are a way of obtaining a very stable income, having a small increment in funds. Unlike other methods of investment, one may predict what is going to happen in the future market, as real estate is considered to be cyclical, and is reflected on the economy’s state. Lastly, an investor has the certainty that a considerable income is due, being monthly or annually.

Historic Returns

One may compare real estate investment to fixed-income securities. This is due to the fact real estate may resemble the structure, income and risks to that of the fixed-income securities. This means that investment that is long-term in real estate would likely to fall somewhere between stocks and bonds returns.

Q2

What is meant by the life cycle of real estate? Explain it in your own words

The various stages of the cycle of real estate that are required to formulate an appropriate approach are divided into Work Stages, as shown below. Note that each stage will be discussed accordingly.

Work Stage A

Inception

It is the process where a brief is developed with the help of the client. At this stage, a report with respect to feasibility is done, including an estimated budget with respect to the project in question. Advice with respect to how one must proceed is also given at this stage.

The chosen site is visited, and an initial appraisal is given. The contractor may advise the client about the need for other consultants, and other specialist work.

Work Stage B

Feasibility

At this stage, as the name implies, studies are carried out so as to establish feasibility. A number of alternative designs and construction approaches and their respective cost implications are reviewed accordingly.

A timetable for said project is also outlined at this stage. Health and safety methods and statutory approvals are considered as well.

Work Stage C

Outline Proposal

Outline Sketches/Proposals are prepared at this stage, for preliminary approval proposals.

Work Stage D

Schematic Design

A schematic Design following the discussions at stage C, is developed. A working relationship should be established with the other consultants, and get to know where their work affects programme and budget of the project. The following steps should be taken care of :

Prepare Cost estimates

Enable agreements with respect to spatial arrangement, materials and aesthetics.

Prepare and submit a Planning Application.

Work Stage E

Detail Design

The detail design, including the coordination with the other consultants and suppliers are finalised at this stage. Moreover, the materials required, and sub-contracted work required, are integrated. The overall costs are checked, and a Building Regulations Application is submitted.

Work Stage F and G

Production Information & Bills Of Quantities

The Drawings, schedules & specification are given to the Quantity Surveyor so that correct bills of quantities may be produced, so as to enable contractors to tender.

Work Stage H and I

Tender Action & Project Planning

Advise is given on a list of suitable tenderers for said project. Tender documents are issued upon the agreed list of contractors. Applications are then received from the tenderers that are interested in this project. The client may choose one contractor, without dealing with the tendering stage, and arrange a price to be negotiated with said contractor. Lastly, the building contract is prepared and signatures are arranged.

Work Stage J, K and L

Operations on site

The terms with respect to the building contract during the works on site are administered at this stage. The site is visited at intervals by the client or his representatives, so as to inspect the progress and quality of the work. A client may also request periodic financial reports to, including any cost variations. The terms of Contract related to completion of the work are administered and a general guidance on maintenance is given, whilst providing record drawings as required.

Completion of Project and Feedback

At this stage, the project is completed, and feedback with respect to quality is given.

Maintenance Phase

The Maintenance Phase is an indispensable part of a building, so as to keep it working at its best. Maintenance is considered one of the most overlooked factors from a company, and client. Clients expect that, since they bought the best materials on the market, maintenance is not required, but for obvious reasons, this is not the case.

The frequency of Maintenance is dependent on the elements of said building. For example, HVACs might require maintenance at least once a year. However if problems arise, the client must be prepared to solve them as soon as possible, because the persisting problem might affect other factors of the building. Leakages may result in rising damp if not treated immediately.

In large scale projects, like malls, lighting is a very important factor, which needs to be taken care of periodically. Light bulbs or fluorescent tubes are required to be replaced periodically, so as to keep light intensity to its optimum. In certain cases, a client may need to replace all the lighting in a particular area, due to the fact that light intensities between the old and new lighting may not match, affecting not only the area aesthetically, but it may also cause headaches to the clientele. This means that maintenance with respect to lighting must be discussed thoroughly, so that replacement is at hand.

Demolition Phase

This phase marks the end of the life cycle of the building. A client may choose to renovate the building as well. However, if there is no need of said building, or if it is in a dilapidated state, best chances are to demolish it.

Measurements which require to be taken with respect to demolishing a building are:

The environmental impact of the surrounding area

Feasibility with respect to demolition

Materials which can be used or recycled

An employer should always make an Environmental Impact Assessment when demolishing a building, so as to avoid any issues with people living nearby. Moreover, he must choose the best ways of demolishing, to decrease Noise pollution, and other kinds of pollution.

As mentioned above, if a material can be recycled, it is advised to do so. Reusing material saves up on the overall material cost, which is usually the priciest of all elements.

Q3

What is covered in a real estate net rent?

A Real Estate Net Rent may be defined as being a method of commercial real estate lease where the tenant is required to pay for the habitable space only.

Q3b.

What are additional costs to a real estate net rent? Please give at least 2 examples.

Additional costs that may be affected with respect to real estate net lease are the following:

Operation

Maintenance Usual Costs

The overall use of the property

Note that expenses that are associated with this method of leasing include taxes, various utilities, property insurance and management fees, as well as water and sewer management, and waste collection. This means that Net Rents are almost always in favour of the landlord. This means that a tenant should always opt for caps, or a predetermined maximum amount said landlord may increase the fees.

Note that that Usual Costs that are added into the net rents may be divided into three categories of expenses

Maintenance

Insurance

Taxes

On the other hand, A double net rent entails in the tenant to pay for all the taxes and insurance, whilst the Triple Net Rent entails in the tenant to pay for all the three types of Usual costs mentioned above.

Task 2

Q1a.

List the targets of the facility management.

Facilities management is growing at a very fast rate. This has led to discussions related to the role of a Facility manager, and how said role differs from property management. However, irrelevant of how one pictures a Facility manager, this role is not only of great importance to the success of a property, but also indispensable so as to keep benefits deriving from the building environment as high as possible, whilst keep risks as low as possible. The British Institute of Facilities management describes the term Facilities management as follows,

"Facilities management is the integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of its primary activities". 

BOMI Institute defines Facilities Management as,

‘the process of coordinating the physical workplace with the people and work of an organization. The primary functions of facilities management is to plan, establish, and maintain a work environment that effectively supports the goals and objectives of the organization.’

Facilities Management has evolved from just taking care of physical maintenance of a building, and operation, to a more complex and expensive task, that incorporates skills from other fields, such as the business sector, management, real estate and human comfort.

Targets of the Facility Management

The main targets of Facility Management may be divided with respect to roles:

Investor/Owner

Planner/Engineer

Provider of Services

User/Tenant

Project Developer

Investor/Owner

The aim of the investor is to decrease the total construction and operating costs of a particular project. Moreover, maximum real estate yield with respect to valorisation must be met.

Planner/Engineer

The Planner’s aim is to maximise the fees that are being imposed, whilst obtaining customer loyalty and increasing market share.

Provider of Services

The aim of the Service provider is to maximise the margin, whilst obtaining customer loyalty and increasing market share.

User/Tenant

The user seeks minimum occupancy costs, whilst obtaining maximum efficiency. On a long term basis, the user expects quality of the work environment.

Project Developer

The Project Developer seeks maximum project developer profit, whilst obtaining maximum Customer loyalty and increased market share.

Q1a.

List the targets of the facility management.

When taking into consideration the skills that a Facility Manager has to have, two distinct sections may be produced. These sections are as follows:

Hard Skills

Soft skills

Hard Skills

Hard skills are skills that need physical actions or technological aid to be performed. Hard Skills may be divided as follows:

Installation of Electrical wiring and distribution of power

Carpentry

Plumbing and other water distribution related work

Maintenance and operation of HVAC systems

Spatial Planning

Civil and structural engineering principals

Miller, A. (2007)

Soft Skills

Miller, A. (2007) describes Soft Skills as being ‘tasks performed through mental intuitiveness’.

Ability to relate to customers

Coordination of Contractual Agreement

Teamwork

Technical Judgment

Managing of Time appropriately

Business Continuity

Financial Awareness

Q1c.

Facilities management can be classified as technical, commercial, or infrastructural. Explain all terms and give one example for each one of them.

As previously mentioned, Facilities Management may be classified into three sections:

Commercial

Technical

Infrastructural

Commercial Facilities Management

Commercial Facilities Management has a Market share of 13%. The aim of Commercial FM is to produce an efficient balance between the costs and benefits of real estate. Maximum Benefit may bring an increase or further securing of the rental income. On the other hand, minimal costs bring Tax optimisation, maintenance of the building’s overall value, and most of all, a decrease in the annual management and maintenance costs of a particular building.

Commercial Facilities Management tackles the following aspects:

Contract Management

Insurance Industry

Rent Adjustment

Mentoring Of Rental Space

Accountancy

Dunning Process

Reporting

Cost Accounting

Budgeting And Cost Control

Accounting

Inventory

Technical Facilities Management

Introduction

When taking into consideration the technical side of facilities management, various aspects must be dealt with, like for example reduction of the total costs with respect to energy and operation of a particular building, whilst increasing efficiency. Said sector has a marker share of 40%, and is on the increase since technical equipment liability is on the increase. Note that this sector is of great importance when it comes to public and commercial buildings, as it deals with blocks offices, indoor pools and hospitals, as examples.

The key points for a successful project are the following:

Prestige

Profitability

Expectations

Quality

The aim of technical facilities management is to not only maintain and take care of a building, but to also modernise is through the years of usage.

Note that Technical Facilities management deals with issues like:

Claims advices of tenants

Ordering of Craftsmen

Periodic check-up of the output

Payment of bills

One must keep in mind that Facility management tasks are based solely on the technical maintenance of a building, and are strictly depends on the type of building, its age and the technology used to run the building.

Overview of Technical Facilities Management

Heating Engineering

Ventilation Engineering

Sanitary Engineering

Refrigeration Engineering

Process Measuring And Control Technology

Building Control System

Building Automation

Telecommunication Engineering

Electrical Engineering

Safety Engineering

Locking System

Energy Management

To keep track of all the operations and failures, an Operation Diary is issued. Note that supply and/or delivery of maintenance related materials may also be added to this Diary. Said materials may include; oil, filters, cleaning materials, and so on.

Infrastructural Facility Management

Introduction

Infrastructucal Facility Management improves the use of a particular building thanks to the fact that it covers the business-supporting services. Note that this factor should be obvious so that customer and user satisfaction may be achieved. Note that the services that are required should be adopted with respect to the entity in question.

Overview of Infrastructural Facility Management

Caretaker service

Security agency

Waste disposal

Building cleaning

Catering

Car pool service

Reception

Telephone exchange

Delivery service

Winter maintenance

Relocations

At present, Infrastructural Facility Management has a total market share of 47% in the construction sector. The main aim of IFM is to aim for the optimum well-being of the employees and users. Since it is not a major task in a company, it is usually taken care of by third party providers. Note that IFM makes the process of real estate quicker, simplified and more efficient.

The services used to cover the general support of the real estate are as follow:

Cleaning

Security

Care of the green areas

Catering

Postal services

Planning and co-ordination of the caretaker

Development of security concepts

Q2.

Explain in your own words why it is a good idea to have technical facilities management between the project conception and the project planning.

When taking into consideration the technical aspect of facilities management, it is thought that the most viable phase in which said aspect should be planned is between the project conception and project planning.

Technical Facilities Management

Introduction

As previously mentioned, TFM tackles factors like cost reduction and energy effiency in a particular building. When analysis are made in the project planning phase, there is a greater chance for better implementation of energy efficient units, as design of the building is made in a way to implement the technical facilities management in the design. In the case of alterations, made to the client’s desires or other, these can be made on paper, without having to deconstruct and reconstruct on site.

Another factor worth pointing out, is the fact that no further alterations are required to be made to the building, if analysis for said Facilities are done at the planning and conception phase. This means that no extra fees are wasted on alterations, and may help the client save money, and choose a better system, which requires less maintenance.

As previously mentioned, the key points for a successful project are the following factors:

Prestige

Profitability

Expectations

Quality

Alternations in the building which do not match the overall design will inevitably affect the prestige of the building, therefore it should be avoided. Lack of planning of the facilities will not only affect the profitability of a project, but will also end up in unnecessary costs for the client. When trying to introduce a facility that has not been thought of before, will usually show as an alternation that has been done after the building has been finished, and will most probably not meet the expectations of said client, as lack of planning beforehand usually omits possible alterations, especially in older buildings. As a result, quality will be affected.

Q3.

Technical Facility Management deals a lot with maintenance. Explain in detail the term ‘maintenance’ and list all activities and strategies associated with it. Also, give two examples for each activities.

Introduction

Effective maintenance program cannot be overlooked. It plays quite an important role in the effectiveness of Lean manufacturing. Most of all, it plays a great part in personal health care insurance. Maintenance may be considered the heath care of the manufacturing machines and equipment. It is vital so as to effectively reduce waste and run an efficiently. Note that the cost of regular maintenance is very small when it is compared to the cost of a major breakdown at which time there is no production.

Purpose of Maintenance

Regular maintenance is viable so as to ensure that all equipment required for production is operating at 100% efficiency at all times, so as to decrease the rate of accidents and discomfort. Such regular maintenance can be achieved through

Short daily inspections

Cleaning

Lubricating

Making minor adjustments

When solving minor problems, major problem can be overcome, since these can arise in the shutdown of a production line. To achieve a good maintenance program, company-wide participation is required, ranging from the top executive to the shop floor personnel.

Breakdowns

It is really complicated to calculate the true cost of a breakdown. After a recent survey, it was shown that the cost for a machine breakdown, is more than just the maintenance labour and materials to make the repair. The actual cost for a breakdown is between four to fifteen times the maintenance costs. This is due to the fact that a breakdown causes production to stop, and therefore, the costs are very high because such delays affect customers, and their state of mind, resulting also in some not wanting to come back to the particular premises.

For years now, maintenance has been greatly overlooked. Unfortunately, several persons think that it does not produces revenue. Krar S., states that the questions below are key to justify the need to maintain buildings

"Why do we need to maintain things regularly?"

"To keep things as reliable as possible."

But what does keeping the building services as reliable as possible involve?

Maintenance includes ‘all technical, administrative and managerial actions during the life cycle on an item.’ Maintenance activities is made up of all the following processes:

Inspection

Testing

Testing

Measurement

Replacement

Adjustement

Repair

Fault Detection

Services

Note that there are two types of maintenance:

Preventive/Proactive maintenance

Such maintenance is carried out so as to keep something in working order. Such maintenance is usually planned and scheduled by the manufacturer, depending on the instructions produced.

Inspection Maintenance

Such maintenance is carried out so as to check the state of all the systems of a particular unit.

Corrective/Reactive maintenance

Repairing something that wasn’t working as supposed to. Unlike the Preventive Maintenance type, these are unscheduled, unplanned, and usually associated with greater hazards and risks than those of the Preventive Maintenance.

One may face a lot of hazards when taking part in the maintenance of the services installed in a particular building.Whilst undertaking maintenance activities, one can potentially expose himself, to all sorts of hazards. There are four issues that deserve particular attention, because of the severity of the harm that can occur, and because they are the most commonly encountered during plant and building maintenance. The most commonly encountered hazards are listed below:

A worker may develop musculoskeletal disorders, through working for long hours at a time without any breaks in between.

environmental conditions, like cold conditions.

exposure to asbestos, while maintaining old buildings or industrial installations.

asphyxiation in confined spaces.

exposure to chemical agents, like greases, solvents, corrosives, which might damage skin tissue of even lungs, if inhaled. The latter one is more common when gases are present.

exposure to biological hazards, like hepatitis A or legionella.

exposure to dust, including carcinogenic wood dusts.

accidents like:

falls through or off something

Being hit by a piece of machinery.

Conclusion

As mentioned previously, with the industry so focused on the bottom line, the cost of downtime has a huge impact on profitability. If the equipment starts to wear, this may result in producing parts which are of unacceptable quality, and most of all may be of danger to one's health. Imagine not maintaining an elevator, and the consequences that might arise. Imagine having to let customers wait, or use the stairs, instead of using an escalator, let alone the burden on paraplegic customers. The end result of lack of maintenance is always an increase in the overall risk of someone getting hurt. Note that it is more cost effective, to have periodic maintenance, then having to pay an injured customer, for his medications. Worst case scenario would be, not taking care of checking if the fire detection equipment, is in working order. What if a fire sets off? If such systems don't work, it means that the customers and the Fire Fighting Department, won't be informed of such happening, resulting in tragic consequences.

However, world-class companies have already taken a game changing approach. They are implementing a new service business model, which changes basic maintenance systems into smart services which asset management solutions. Such reduce downtime and provide the ability to look ahead at the quality of products, before serious consequences arise, by closely watching equipment performance and machine wear. Krar, S. states that 'Rather than reactive maintenance - "Fail and Fix" - companies can indeed move to "Predict and Prevent" maintenance.'

A quick rundown of the advantages of frequent Maintenance is listed below:

Preventive Maintenance increases the overall efficiency and speed of a particular equipment.

It conserves the energy and life of the equipment, whilst saving up on taxing if it goes through regular maintenance programs.

Avoid the replacing parts of the equipment, before the scheduled time.

Reduces the cost when the work done is faster, and the machine does not break down in the middle of its working schedule, thus increasing the wages.

Saves time, since break down don't need to be faced, when the machine is needed the most. There isn't time spent to get the machine back in shape. Preventive Maintenance procedures take lesser time then proper repairs.

Save money, since preventive maintenance would cost less, when compared to repairs and replacement.

If it is a computer or a system that stores data for the project, then Preventive maintenance is a must since, in case the computer breaks down, this would result in loss of data that might be of great importance.

Ensures the safety of the person who is working or using the machine, since in case of a non functional component, a major accident may occur which is not desirable at all.

Strategies

The aim of planning strategies with respect to maintenance is to be able to find the optimum stage where maintenance is most cost effective. Lack of abiding to these strategies will not only increase costs, but will also temporarily shut down the unit that had to be maintained.

There are main types of strategies to be considered:

Dependent on time interval

Activities are set with respect to time, operating time, burner start-up and so on.

Dependent on condition

Activities are set with respect to the state of the unit, through inspections or identifications.

Dependent on damage

This strategy occurs after a damage has occurred.

These strategies may be connected by using CAFM (Computer Aided Facilities Management). CAFM may be divided into two components:

Computer Aided Design (CAD), which is used for graphical representation of the unit

Data Base (DB) for the ‘alphanumerical information’

Task 3

Q1.

Why is benchmarking so useful in commercial facilities management?

Definition of Benchmarking

Investopedia defined benchmarking as,

‘A standard against which the performance of a security, mutual fund or investment manager can be measured. Generally, broad market and market-segment stock and bond indexes are used for this purpose.’

Benchmarking is also known as being the discovery of specific practices for:

discovering the specific practices responsible for high performance

understanding how a facility best practices work

adapting and applying these practices to your organization.

The need for benchmarking

Hereunder, one may find valid reasons why customers, staff, management and services provider may benefit from benchmarking:

Benchmarking reduces the need of coming up with already known methodology, resulting in gain of time, and saving up of money.

Benchmarking increases efficiency in restructuring, by:

Making use of already proven practices

Giving an explanations to people who do not believe in said proven practices

Overcoming inertia and complacency by creating a sense of urgency when benchmarking gaps are identified

Benchmarking makes it possible for the creation of new ideas that may increase efficiency of a particular sector.

Benchmarking often forces organizations to examine present processes, which often leads to improvement in and of itself

Conclusion

Thanks to Benchmarking, an organisation has the ability to improve different facility related services, like,

business processes

procedures

cost

consumption

quality-related service areas

By measuring the present total expenses, consumption and quality, benchmarking has the ability to provide the facility manager with a guide to optimise the present results.

Q2.

Differentiate between internal and external benchmarking. Also list possible advantages and disadvantages for both.

Internal Benchmarking

Business Dictionary describes Internal Benchmarking as being, 

‘The process of making meaningful comparisons between the performance of a company and the performance of identified best practices that often become the standard for continued improvement used by employees for more effective ways of getting the job done.’

External Benchmarking

Super Glossary describes External Benchmarking as being, 

‘The process of comparing an organization’s current policies and practices to that of a competitor organization(s) to determine current and future trends in areas of employment and business practice (i.e., compensation, benefits, HR practices).’

Advantages of Internal Benchmarking

Internal cost models are known already, therefore less time is required to obtain the required data.

The services that are being analysed are known, and easily identifiable.

As the analysis is based internally, it is less time consuming then external benchmarking.

It uses similar language, mechanism, system, culture, mind-set and top-management support.

Communication is relatively easily achievable and quick, as the units are found internally.

The results are effortless and quick.

‘It provides a test bed for quicker improvement.’

‘Along with transfer of data, expert services from the benchmarked unit are easily available.’

Transtutor (2010)

Disadvantages of Internal Benchmarking

Since it lacks external effect, it may lack seriousness and lead o complacency.

Weaknesses that are found within the company tend to remain as is, including cultural problems or leadership problems.

Improvement is not major

Advantages of External Benchmarking

Comparison may be made with the best possible external examples.

Knowing what others have achieved will make it possible for a company to know what its milestones are.

Better basis of comparison as there is a larger variety from which to compare.

Disadvantages of External Benchmarking

Very time consuming.

It is harder to achieve data from external competitors.

Competitors may receive data that might be used against the company in question.

Q3.

Explain the difference between process benchmarking, product benchmarking, and key figure benchmarking.

Process Benchmarking (generic)(best practice)

In this type of Benchmarking, the generic processes of a particular company are analysed. These include order receipt and dispatch process, in contrast to the best practice or leadership in any other business. ‘Typical examples include benchmarking the purchasing,

design, order fulfilment or recruitment processes.’

Product Benchmarking (technical)

This type of benchmarking tackles the upgrade of products, and their design. Note that this type of benchmarking may involve some sort of reverse engineering, meaning that products are broken down and analysed, to obtain their defects and how to solve such defects.’ Typical service examples include IT help desk, after-sales service, or customer queries. Typical product examples include domestic goods, compressors, and houses. Studies focused on products and services usually focus on the output from the organization rather than the process of producing it (which would be process benchmarking).’

Key figure benchmarking

Key figure benchmarking helps a particular company to analyse and obtain the necessary data with respect to gaps in the Facilities Management.

Difference between each method of benchmarking

The main difference with respect to each method lies in the success rate when each benchmarking method is compared to another, as seen in the diagram below:

This means that some combinations are more relevant when compared to others. When taking into consideration External/Competitive Benchmarking with respect to Process Benchmarking, the success rate is relatively low, simply due to the fact that competitors are never willing to get their data public. On the other hand, when comparing Functional and Process Benchmarking, will yield a high success rate simply because the partners that are being benchmarked are customers, or suppliers, who most probably are passing through the same problems, and as well would like to find a viable solution for their present situation.

Q4a.

Because of which differences in basic of calculation for key figures and additional costs can discrepancy of results be explained? By reading the table below, name 5 reasons and explain them.

The reasons that were chosen are as follows:

Repair

Breakdown Management

Gardening

Reception

Waste Disposal

Repair

Repair has been included in this breakdown, due to the fact that this company, which most probably is older than its competitor, is focusing on not only preventive maintenance, but also on corrective maintenance, hence the addition of not only repair, but also other aspects like Inspection.

Breakdown Management

As the name implies, Breakdown Management is required for on to be able to identify not only the processes required for each aspect of Facilities Management, but also the roles for each entity working on the project. Even though it only makes up 2.09% of the whole system, it has effect on each phase for the well-being of the company.

Gardening

Said aspect might have been omitted from the competitor’s company due to the lack of requirement for such need. This may be further proved by its low percentage of only 1.05%.

Reception

The reception area is one of the areas that affect a client’s opinion the most. It is the first internal area that is viewed by the client, and one which will have the most effect on the client’s opinion on the company, with respect to quality. A reception that is not well-kept will definitely have its toll on the overall opinion of the company, hence the 5.02% importance.

Waste Disposal

Unlike the competitor, said company requires a separate disposal system due to the fact that there are various processes which would in turn result in a considerable amount of waste, like for example, cleaning interior, and gardening.

Q4b.

Which activity would lead to a comparable confrontation, so that a statement about the additional costs can be made?

When taking into consideration key figures that are both internal and external, one may opt for the role of the Facility Manager. As the data shows, the importance of the facility manager in the internal section is of 13.6%, whilst that on the external section, it adds up to 8.65%.

As previously noted, the internal key figures show that there is a distinctive focus on maintenance, and will in turn increase the amount of work for the facilities manager. Moreover, additional costs would be required due to the fact that more work has to be dealt with for the Facility Manager.

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http://www.facilitiesnet.com/facilitiesmanagement/article/Benchmarking-%C3%B3-Inside-and-Out--4266

http://www.transtutors.com/homework-help/industrial-management/benchmarking/advantages-of-internal-benchmarking.aspx

http://waqasghori.hubpages.com/hub/Benchmarking-in-a-business

http://virtual.vtt.fi/virtual/proj2/benchmarking_network_and_databank/ben_theory.pdf

http://womeninbusiness.about.com/od/commercialleasingterms/g/net-lease.htm

http://www.investopedia.com/articles/mortgages-real-estate/09/real-estate-portfolio.asp