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By Charles Carpenter, CFM
From the November 2013 issue of Today’s Facility Manager
As the year wraps up and budgets grow tighter, it is a good time for “Taking Care Of Business” (TCB) when it comes to spending facility management (FM) dollars wisely. Elvis Presley was famous for his use of TCB (a personal motto he adopted in the early 1970s), but one financial term that Elvis probably never considered was total cost of ownership (TCO). TCO does not seem to get much attention lately. While projects are often judged for their return on investment (ROI), one cannot honestly calculate an ROI without a TCO.
Facility managers (fms) might evaluate the costs of an LED retrofit against the energy savings, only to neglect to consider such things as emergency lighting, disposal of fluorescent bulbs containing mercury, the total hours the lights are really in use, or the possibility of falling electricity prices. A thorough evaluation and “what if” scenarios can provide a true TCO and a more honest ROI.
TCO is easy to overlook; just ask a teenager who purchased a car only to find out that it needs premium gasoline. Fms typically do not make the TCO mistake twice. Those that do could try to save face by allocating unbudgeted expenses to recurring cost centers. Ultimately, shell games might leave others with “Suspicious Minds,” so it is better to base your reputation on facts versus hunches.
In the spirit of “Who Needs Money,” here are some suggestions to lower the TCO or bottom line on many items. Some of these might have you thinking “It’s Now Or Never,” depending on your experience with your facilities and staff.
- Who purchases your janitorial supplies? If you work with an outside service provider and let them do the purchasing, you may find you are paying an unnecessary mark-up and have a hard time scrutinizing your use. Provided you have the bandwidth, it may be better to do your own purchasing.
- When was the last time you reviewed cleaning specs? While each service provider has their own specs, do they really follow them? When checking the specs, you may find you are paying for unnecessary or unwanted services.
- The opinions on day cleaning are mixed. If you can handle daytime cleaning, you may save on utilities and possibly pay differentials. During the day, custodians might see dirt that gets missed at night. The tradeoffs might be complaints about noise or smell and putting up with the closed restrooms “Until It’s Time For You To Go.”
- Many manufacturers provide dispensers (and installation) for exclusive use of their products. With new construction or a retrofit, fms could trim the budget by allowing the manufacturer to handle this instead of paying the “Big Boss Man.”
- If your facilities are located in areas subject to hailstorms, are there hail guards on your equipment? Since “When It Rains, It Really Pours,” these may be a wise investment. If these were not specified in construction documents, aftermarket options are available.
- Do you have economizers on your units? Nothing seems crazier than running air conditioning “When The Snow Is On The Roses.” If you do not have these, many units can be retrofitted with economizers with a low TCO.
- Does the HVAC really work as it should? Thermostats can be out of calibration or off schedule. If maintenance is done at the wrong time, the conditions are not right to test economizers. Some techs might close off fresh air intakes in warmer months to save energy; however, occupants will be the ones who suffer from carbon dioxide buildups.
- Comfort might be a matter of humidity rather than temperature. Depending on the environment, dehumidifiers may be a lower cost solution versus keeping set points several degrees cooler. The EPA says the ideal levels of humidity in a space will be less than 60% in the summer and between 25% and 40% in the winter.
- What would happen if occupants were able to set the temperatures in their personal spaces? You might be surprised to find someone who will push their thermostat higher in the summer months when everyone else wants to lower it. “Don’t Be Cruel;” the important thing is that the occupants have the right comfort for their activity.
- Your facilities may carry an unnecessarily high load or demand factor on your utility bill. If all systems power up at the same time, the factor could be higher than it should be. Unstaggered HVAC start-ups can be the biggest culprit. Even if steps have been taken to prevent this, it never hurts to perform a self audit or to check historical utility usage to see that systems are “Working On The Building.”
- Some facilities are eligible for tax exemptions (commonly called predominant use) on their utilities. There are companies who will get these exemptions and/or refunds for a fee; however, it might be worth a call to your utility provider or state regulatory agency to see if a facility qualifies. If only part of the facility meets the criteria, fms can look at the TCO for submetering qualifying loads.
- Has someone checked unclaimed property for your company? While this is unlikely to be under an fm’s purview, one could knock out a few searches on the subway or during a long conference call. It is worthwhile to search for common misspellings, partial or previous names, abbreviations, subsidiaries, and states outside your own. If you do report something for your company, hopefully you will not get a “Return to Sender.”
FM savings go straight to the bottom line. When fms are able to quantify their frugality, they can hope their organizations will be praising “The Wonder Of You.” And since TFM is loaded with suggestions for eking the most from budgets, you are already a step closer to TCB on TCO. You can check out my June 2011 FM Frequency column that addressed cost savings in “Pinching Pennies; Counting Quarters.”
If you did not appreciate all the references to Elvis songs, “That’s All Right.” While you can send Carpenter your suggestions and comments, you can easily share your thoughts and see what others are saying by visiting the online version of this article at www.FacilityExecutive.com.