Resource Management Process - Property Management

Process Objectives

1. Control capital expenditures
2. Acquire/construct facilities at acceptable technological/reconfiguration levels
3. Optimise capacity
4. Reduce risk of loss and improve safety environment

Critical Success Factors (CSF’s)

    A.   Accurately plan equipment and facilities needs (1,2,3)
    B.   Procedures to follow environmental regulations/safety training (4)
    C.   Establish maintenance procedures (1,4)
    D.   Maintain current disaster recovery plan (DRP) (4)
    E.   Establish proper procurement procedures (1,2)
    F.   Monitor developments in technology/facilities (2,3)

Key Performance Indicators (KPI’s) Linked to CSF’s

• Square feet utilized/divided by total available; square feet and cost per square foot by department (A)
• Ratio of insurance premium costs to coverage; number and cost of environmental fines (B)
• Maintenance costs to total operating costs; equipment write-offs (C)
• Modifications to disaster recovery plan (D)
• Percentage of orders where discounts taken; costs per unit by vendor (E)
• Equipment/technology costs by department (F)

Inputs

Strategic plan Capital budgets Operating budgets

Suppliers Construction plans Economic environment

Demographic information Maintenance schedule Regulations

Activities

Outputs

Make/buy analysis Disaster recovery plans Capital budgets

Machinery and equipment Land and buildings Risk management plan

Supplier contracts Operating information

Systems

Fixed asset Disbursement / payable

Budget Payroll / scheduling

General ledger Space management

Classes of Transactions

Routine Fixed asset additions Insurance expense Depreciation expense Maintenance expense

Non-Routine Lease classification Incentives / abatements Gain / loss on sale Interest capitalisation

Accounting Estimates Impairment of long-lived assets Uninsured loss accruals Depreciation methods / lives

Risks Which Threaten Objectives

    A.   Insufficient or excessive capacity (3)
    B.   Uninsured or underinsured losses (1,4)
    C.   Impairment in value of assets (2,3)
    D.   Inability to acquire needed assets on time (2)
    F.    Cash flow not sufficient to fund capital expenditures (2)
    G.   No contingency plans for unexpected events (4)

Management Responses Linked to Risks

• Create and monitor facilities plans; compare costs to operate to outsourcing; compare actual utilisation plan (A)
• Conduct environmental and safety reviews; monitor legal and regulatory initiatives (B,C)
• Monitor maintenance plans/periodic inspection; monitor new developments and technology (D)
• Maintain relationships with suppliers; obtain competitive bids (D)
• Monitor capital budgets; compare costs to operating budgets and industry (E)
• Periodically monitor feasibility of disaster recovery plan (F)

Other Symptoms of Poor Performance

Excessive machinery downtime Capital project overages (costs and time)

Manual systems / workflow Excessive number of suppliers

Excessive workers’ compensation claims Increasing property tax

Performance Improvement Observations

Procurement review Maintenance systems review Improved fixed asset systems

Property tax representation Business incentives consulting Management reporting review

Capacity review Benchmarking study Environmental assessment review