Part One was published last month. Click here to see it.
In last month’s article, we used a real manufacturing facility, located in Florida, to benchmark maintenance costs. We started by looking at several filters to understand its performance better. Initially we filtered by:
- Size of facility (Large: >600,000 GSF)
- Type of facility (Manufacturing)
- Age of facility (>21 Years)
As a rule, you want to use as few filters as possible, as the more filters you use, the larger the data sample will have to be (in order to have enough buildings in your filter set). It is ok to test many filters, as we did last month, but keep the number to be applied simultaneously to a minimum so that you have enough buildings in your filter set to analyze properly. Thus, finding the correct filter set is critical. See last month’s article for more information on defining the correct filter set.
In our analysis last month, we looked at how our performance changed with each of these filters and concluded that the most significant filter impacting our performance was the age of our facility, although facility size and industry also had an impact. In reality, what we are doing with these various filter options is changing our peer group for comparison purposes—by modifying the filter set, we are modifying the peer group. If you haven’t compared your facility with the right peer group, the charts will not provide a realistic picture of your benchmarked costs. Comparing data or even processes isn’t a very effective way to improve your performance unless the comparisons are made with a relevant peer group.
Getting Results: Integrating Best Practices into the Benchmarking Process
As a result of our analysis, let’s say you have looked at the results from enough filters and you are comfortable that you are comparing your building with the right peer group. So, are we done with our analysis? On the one hand, yes, we’ve created a valid scorecard and can see where our facility stands in comparison to other similar facilities. But is there more we can do? Is there a way to improve our facility’s performance? Yes on both counts!
To improve our facility’s performance, we must look at the best practices being employed in similar facilities that are outperforming ours. We then can compare them to the best practices we have implemented in our facility. Benchmarking can be used for that as well. To illustrate, let’s continue with the same manufacturing facility in Florida and see which best practices it has implemented and how they compare with those of their peer group.
In Figure 1 below, using only the filter for size, we see that the cost for our building is $2.25 per gross square foot (GSF). In the diagram, we have shown the 1st Quartile (left-most buildings), Median (horizontal red line) and 3rd Quartile points. Our building’s maintenance costs (yellow line) are in the 1st Quartile about midway between the lowest cost building and the 1st quartile. This sample has been filtered for:
- Size of facility (Large: >600,000 GSF)
- Type of facility (Manufacturing)
- Age of facility (>21 Years)
We’ll look at the some of the best practices that have been implemented at our facility and by our peers in our Quartile (1st). Even though we are in the 1st Quartile there is room for improvement. By looking at which best practices have been implemented we may see some options that we could implement at our facility to improve the performance.
Listed below in Figure 2 are just a few of the best practices from the database. At our manufacturing facility we have not implemented item BPM4 (Equipment standards for replacement components and new design are developed and followed to minimize spare parts storage and reduce training requirements). While that is a good Best Practice only 51% of our peer group has implemented them. There may be better opportunities.
Note item BPM6 (Maintenance management system has been implemented to track work orders). This item has been implemented by 88% of our peer group, the highest implementation percentage in the group. This would be probably be the item we should consider implementing to improve our performance the most.
On the last line, note that 78% of the participants in our Quartile have implemented BPM8 (Maintenance work is performed on an as needed basis as trouble calls develop). This would be another excellent item to consider implementation since it has such a high percentage rate.
What is really happening is that the FM is able to develop very carefully a targeted peer group and then see what has been done to achieve results. This is benchmarking with integrated best practices—it shows what options you can implement to improve your building’s performance.
Looking at facilities without good peer group comparisons can be a major waste of time. Last month, we saw that you need to apply tools iteratively to define the appropriate peer group for your specific situations; this month, we saw that by creating an accurate scorecard, while great for knowing where you stand when compared to others, doesn’t help your building perform better—that’s where the best practices come in.
By comparing the results with costs and best practices, we will have the clearest idea of which best practices to implement. This is the only way one can use benchmarking to improve a building’s overall performance and reduce costs without cutting service.
