Cleaning & Maintenance Management Online

More bang for the budgeted buck

September 19, 2010

"It was the best of times, it was the worst of times...” wrote Charles Dickens in A Tale of Two Cities.

And the budgetary situations facilities managers face today may not be that dissimilar.

As a facilities manager sits down yearly or bi-annually to write a budget for the next fiscal cycle, he/she is faced with some harsh operational realities.

Reality number one — the worst of times — is that dollars expended on maintenance and operations (M&O) is at or near an all-time low.

Introduced as “Tough Times: M&O spending as a percentage of total budget dropped slightly as difficult conditions continue to affect colleges”, American School and University magazine (ASU) unveiled its “10th Annual M&O Cost Study — Colleges” in April 2004.

In the same edition of ASU, the “33rd Annual M&O Cost Study — Schools” stated that districts are continuing to spend small amounts of their budgets on M&O.

In fact, amounts hover around historic lows.

Reality number two — the best of times — is that construction of new buildings is facing an upward trend.

According to the June 2003 issue of College Planning and Management, more than 67 percent of survey respondents said their colleges are planning to build more residence halls.

Dangers of reality
Diminishing funds for M&O — a very real and dangerous trend — is becoming an increasing threat to the stability of facilities throughout the United Sates, with little hope that trend will decrease.

The real dilemma is that many universities, colleges and school systems have embarked on building programs that will cost hundreds of millions of dollars; in turn, budget money allocated to meet M&O needs of existing buildings is dwindling.

So what can a facility manager do to ensure that M&O gets a seat at the budget table and a reasonable hearing of their budget requests?

What elements, strategies or tips can help in the budget process?

A strategic budget plan
Facility managers should be able to clearly demonstrate where the department is at and where it is going.

A strategic plan clearly describes an organization’s current state at point A, where the organization is going to point B, and what strategies will be used to get there.

For instance, whether asking for additional monies or being asked to absorb a 10 percent budget cut — a more real scenario — the manager should be able to clearly define a method to accomplish the increase or decrease.

Even though the budget request may only be for one or two years, the proactive facilities manager will seek to develop a strategic budget plan for five or 10 years down the road.

This forward-thinking methodology will assist the manager in not just reacting to each individual budget request, but in looking toward the future and in communicating to administrators the fiscal vision for many years to come.

Performance indicators
In the budget process, the best strategy is to clearly demonstrate one’s successes as a method to justify current or increased expenditures.

A facilities manager should be able to lay out information to the senior leadership team, indicating how well or poorly the organization functions.

Every facilities department should have clearly defined indicators that keep track of performance for an upward of five years.

Indicators could include:

  • Cost of labor per square foot
  • Cost of supplies per square foot
  • Square feet cleaned per custodian
  • A customer quality index
  • On-the-job injury rates
  • Absenteeism rates

An organization that does not have clearly defined and displayed performance indicators will face severe problems justifying its overall existence, and even more so in the budget arena.

Clearly defined performance indicators can be used to communicate where an organization is at, where it needs to be going, and what it will take in order to get there in relationship to personnel, productivity, supplies, equipment, etc.

Peer or cohort comparison
Increasingly, it is no longer acceptable for a facilities organization to be inward looking, reviewing its own successes; it needs to be outward looking and learning from the successes of other comparable organizations.

It is not uncommon for facilities managers to be asked by administrators to compare their organization (and their performance indicators) with peer institutions or a cohort group.

Such reviews may include the top 10 industries in the field, the top 10 schools in a conference, or the top 10 universities in the nation.

The more similarities the institutions share, the greater the transference and applicability of the information.

However, it is also wise to look at dissimilar organizations. They may have a different way of looking at a particular process that could save your organization significant resources.

Once one has compared their organization to their peers or cohorts, the results are compared and ranked so that one can learn from the comparison.

For instance, if facility A is able to clean X square feet per custodian and your organization is only performing Y square feet per custodian, why is that the case?

One may learn that the organization has concentrated heavily in automated cleaning equipment, such as autoscrubbers or riding sweepers.

This could be a significant line item to include in your budget for next year.

Best practices
Much can be learned by scouring the industry for best practices.

Integrating such practices into your way of doing business could significantly enhance productivity and decrease operational costs.

Many years ago, the majority of in-house cleaning operations were using upright vacuums when backpack vacuums were introduced to the industry.

These vacuums can be worn over the shoulders or on the hips, and are light, mobile, and easy to operate.

Many contract cleaners picked up on the benefits of these types of vacuums and, in turn, in-house operations learned about the benefits of backpack vacuums from contract cleaners.

There is no doubt that all segments of the industry can learn from each other.

Best practices enable us to extend the resources of our operation and assist us in getting the most “bang” for our “budgeted buck”, a trend that administrators appreciate during tight fiscal times.

Justification
It is imperative that a facilities manager provide solid justification for all line items requested in a budget.

The justification should be clearly aligned with the strategic plan and should clearly contribute to the performance indicators of the organization.

For instance, if requesting additional capital expenditures for automated equipment, how will this investment impact the bottom line?

Justifications that clearly link the return on investment for the dollars expended will greatly facilitate the successful submission and approval of any operation’s budget.

If automated equipment will save on man hours and labor costs, it may be worth it to your organization to make the expensive purchase.

Life-cycle costing
Throughout the budget process, it is important to integrate information about life-cycle costing.

For instance, a large automated riding scrubber is a significant investment.

Not only is it an expensive purchase, but it requires on-going maintenance. It will also have a limited life expectancy.

The life expectancy and replacement costs for all equipment should be built into the budget cycle so equipment is functional and operating at an acceptable level at all times.

Failure to build in life-cycle costing will make it increasingly difficult to keep the fleet up-to-date and in operational order.

Life-cycle costing also enables the manager to be prepared for equipment repairs or replacement, and minimizes the need for urgent supplemental budget requests.

Technological advancements
One strategy to use in the budget process is to include technological advancements that will enhance your operation by making it more efficient and effective.

Technology does not need to be highly sophisticated, but it should be tested and reviewed prior to your budget request.

For example, automated chemical dispensing equipment has demonstrated significant savings in dollars and chemical usage.

It may seem cheaper to purchase gallons of chemicals that are mixed with water at appropriate ratios, but investing in metered dispensing equipment can reap rich rewards, as mixing is no longer left to choice or luck.

The right amount is dispensed correctly every time, and is a much more effective strategy for the budget control of chemicals.

Many organizations may still use the “glug-glug” method, but in the long run, chemicals may literally be going down the drain if they’re not measured and dispensed correctly.

Incorporate as much new technology into the budget as is practical for your organization.

Dispensing systems
Dispensing systems for paper products and hand soaps can significantly decrease product and labor costs.

Giant rolls of toilet paper — rather than standard rolls — decrease the need for repeated refilling, require fewer trips to restock, and demand less effort and labor costs.

By utilizing the appropriate dispensing system for paper and other products, the facilities manager can clearly demonstrate that the return on investment for installing such systems is significant — and dispensing systems will continue to contribute to savings after the initial investment is paid off. Touch-less systems Probably one of the most significant advancements from the past 10 years has been the integration of touch-less technology into cleaning operations.

Dispensing systems now dispense soap and paper towels without being touched.

Toilets and urinals flush on their own and hands are dried by driers, without the touch of a button.

Reduced touching means reduced cleaning, leading to less effort and labor.

This equates to significant savings that can be used to justify the inclusion of such items into a budget.

Regardless of the savings, customer satisfaction will increase as public restroom users do not like to touch surfaces.

Purchasing strategies
A facility manager can expend an inordinate amount of time arranging for and purchasing items. Consolidating purchases to a minimum number of providers can result in significant cost decreases.

In addition, when more buying leverage is provided, the purchasing agent and the facilities manager may be able to negotiate discounts on supplies.

Some companies may allow you to order through a “just-in-time” delivery program that minimizes the large quantities of items stored at your facility.

Just-in-time ordering models often allow the facilities manager to order the item today, with arrival the next business day.

Coupled with electronic payments, this route pleases all parties; the vendor is happy for rapid payment and the facilities manager is happy with rapid delivery.

By incorporating detailed purchasing strategies into your budget, you will be able to maximize savings on supplies, chemicals and equipment and be able to purchase more for less, thus making the budget dollars go further.

Standardizing inventory
Standardization of custodial inven-tory can be a significant budget strategy.

Too often, organizations amass dozens of different cleaning chemicals, numerous varieties of buffing pads, duplicated equipment, etc.

By developing a long range standardized plan for minimizing duplicated items, purchasing and bidding power can be increased.

By conducting an inventory of all old, obsolete or extra equipment, one can reduce repair costs, realize better pricing for replacement parts, and develop a degree of interchangeability of machinery.

Rationing of efforts
Rationing of effort is a significant contributor to budget savings and an integral part of the budget process.

Is it really necessary to dust every ledge every day or even every other day? Is it critical that interior windows be cleaned once a week? Prioritize your facility’s needs and meet those goals.

When preparing budget requests, incorporate rationing of effort into the mix to help stretch the budget. The need for unnecessary labor costs will be minimized.

Remember, even though there are best times and worst times, think proactively and toward the future.

Your organization will appreciate — and hopefully benefit — from your efforts.