Delivering built asset operational excellence

Built assets are typically the largest investments made by both public and private sector clients. In the past Constructing Excellence (CE) has made a priority of examining how outcome-value can be locked into the briefing, design, construction and commissioning of buildings and infrastructure.

We have now published our report “Delivering built asset operational excellence – Insight and tips from construction clients and supply chains”. This report summarises an approach to delivering more value during the operational phase of buildings, based on lessons learnt, insight and tips shared by major construction clients and CE members, with the asset management group, over the last few years.

We do hope that this report proves of value to construction clients, supply chains and CE Members and we welcome your feedback on how we could improve our future guidance and reports.

Delivering built asset operational excellence

Details of the contributing workshops can be found below:

The client challenge

When October 2012
What FM and asset management group roundtable event with major built asset clients and HM Treasury FM team
Outcome Define how CE can support clients and its members to improve built asset outcomes
Key conclusions
  • Clients are currently underserved by the construction industry and supply chains to deliver operational excellence
  • Clients need to proactively manage their supply chain if they’re to get the asset performance they require
  • Industry would benefit from models to help define and deliver operational excellence
  • All sectors struggle to analyse the allocation of capex and opex for built assets to optimise whole life performance
  • Clients would benefit from clearer and easier access to asset management and operational best practice

In October 2012 we hosted a round table meeting between nine major built asset clients (Royal Mail, King’s College London, the Environment Agency, Colchester Hospital University NHS Foundation Trust, University College London Hospital NHS Foundation Trust, Hampshire County Council, East Sussex County Council, BAA and Transport for London), HM treasury and Constructing Excellences Construction Clients Group. Between them these clients invest in and procure billions of pounds worth of built assets on an annual basis to support the operation of their businesses.

There were presentations from John O’Brien and Derek Rees, task group chairman and secretary respectively, Steve Livingstone & Giles Price of BAA, and Roy Evans of the Cabinet Office, after which the following three questions were debated;

  1. What are the key difficulties in getting the right buildings, functioning correctly?
  2. Where are client’s poorly served by construction supply chains?
  3. What output from the Asset optimisation and FM group would make a difference?

In response to these discussions there was a consensus from the group on the following points;

  1. suppliers/ the construction industry are currently paying lip services and servicing clients poorly in a number of key areas to help improve project/asset optimisation such as standardisation, cost benchmarking, BIM for operational improvement, design in flexibility etc.
  2. clients’ needs to play a stronger role to push their construction supply chains into delivering their required outcomes and performance
  3. to deliver successful project/ asset performance clients need to stay in control of time, understand project / operational risk profiles and have a knowledge and information strategy in place that allows them to get the data/info they need to effectively operate their assets
  4. there are real organisational and process difficulties in optimising capital and revenue spend to deliver optimum whole life cost for clients on their projects/assets
  5. there is a real appetite to understand and influence the work of Government in this area
  6. people know what project excellence looks and feels like but not operational excellence

The task group outcomes suggested by the group which would make an impact for their organisations also reflected the above themes

  1. Define how clients can get supply chain engagement and use tools such as BIM to deliver better value/optimisation.
  2. Define how clients pull performance from supply chains and deliver standardisation of outcomes.
  3. Define how capex / opex benefit analysis can be optimised for projects.
  4. Define ideal project approaches summarising best practice in areas such as design, seasonal commissioning etc.
  5. Define how BIM can be used effectively.
  6. Help influence Government’s approach to support client’s optimise asset whole life costing.
  7. Define what operational excellence looks like.

The group articulated frustration with the current performance of the industry in this area, saw that they had a leadership role to play in raising performance, agreed that further guidance was not the answer and valued the peer to peer and peer to Government debate.

This lead us to conclude that CE could make more impact in this space by retaining the task group to examine and share best practice in this area on a peer to peer basis with input from specific sectors leading to the publication of this best practice toolkit for clients to deliver operational excellence/ asset optimisation and support for the supply chain to defining where its’ performance can be raised to help clients optimise their assets.

The commercial sector

When June 2014
What Commercial sector
Outcome How to deliver operational excellence in the commercial sector
Key conclusions To better deliver profitable more productive commercial spaceClients should

  • Engaging the end user and start asking aspirational questions
  • Collect in use data and share it
  • Go to supply chain more often to ask for ideas
  • Be more rigorous in asking for data and evidence to make decisions
  • Lessons learned from project, but also lessons learned from operational use. No one goes back 2 years later to ask if business case was met

Supply side should

  • Offer a better and more structured briefing service.
  • Provide intelligence behind data to encourage good decisions
  • Look at more flexible components and systems
  • Go back to see how buildings are actually being used
  • Aftercare service – commercial opportunity. Move towards being a service sector

Presentations were given by the following individuals

The following key points / insights were identified to remember for clients & supply side in defining, procuring, constructing, and operating this sector’s built assets

  • Construction is only one phase in the life in the building/asset
  • Clients and users being able to ask and articulate the right questions so the right information goes into the database
  • Different data capture module for construction phase and operation phase traditionally – move to common data protocols/environment
  • Increase awareness of BIM from designer and contractor through to the rest of the supply chain and client
  • Interactive and automatic maintenance schedule
  • How much are learning points taken from project to project. Needs transparency, but either not enough time to look back at previous projects or protagonists scared to admit previous fault
  • Only geometry rather than intelligence taken from model unless BIM enabled clients
  • Potential for new business models – e.g. Philips selling illumination rather than fittings
  • Huge waste in speculative development because of “just in case”. Hugely over specified. Issue around PI and conservatism. Can we redefine codes using captured data. Could manufacturer build in more flexibility
  • Could walking end users through models remove some of the changes needed? Some, but not all. Some are just legitimate changes in requirement over time the process takes
  • Can we capture  real data so we have a better grasp of ratios between design/build/operation
  • If you have a recurring problem operationally, put in a process in the design process
  • Bringing health and safety in to the design process to different discipline
  • The health part of health and safety. 50% of occupational cancers come from construction
  • Upskilling the FM people to be able to contribute to design
  • Safety should assist production rather than being the police
  • Shorten the feedback loop between designers getting feedback on how the building is used

The following critical actions were identified in the debate for clients & supply side to better deliver profitable productive commercial space

Clients

  • Engaging the end user and start asking aspirational questions
  • Clients need to be aware enough to either know that they are competent to drive things, or when they aren’t competent and need help
  • Collect in use data and share it
  • Can we collect real data to justify spending more on design
  • Go to supply chain more often to ask for ideas
  • Be more rigorous in asking for data and evidence to make decisions
  • Lessons learned from project, but also lessons learned from operational use. No one goes back 2 years later to ask if business case was met

Supply side

  • Offer a better and more structured briefing service.
  • Provide intelligence behind data to encourage good decisions
  • Look at more flexible components and systems
  • Go back to see how buildings are actually being used
  • Aftercare service – commercial opportunity. Move towards being a service sector

The education sector

When September 2013
What Education sector
Outcome How to deliver operational excellence in the education sector
Key conclusions
  • Listen to the building users, students, staff and other stakeholders, meet regularly and help them to be ambitious
  • Create and estates strategy that aligns your estate with your academic strategic plans and operational requirements
  • Have efficient reporting systems and management plans
  • Agree developments with users and have the courage to stick to the plan
  • Collaborate and Communicate

The following presentations were made to the task group:

The following KPIs for operational excellence were suggested across the three presentations

  • Delivering and improving student experience and one that is above average for the sector
  • Delivering and improving staff satisfaction and one that is above average for the sector
  • Delivering above average performance for the sector in terms of space per student, FTE and £revenue; operational cost per m2, student and FTE; CO2 per student, FTE, m2 and £revenue

The following key challenges were identified as being faced by clients & supply side in defining, procuring, constructing, and operating this sector’s built assets

  • Meeting Student Expectations which includes
    • A safe environment with clean and adaptable space
    • High quality group learning, individual and social spaces
    • Well maintained learning and teaching accommodation
    • Open access and extended hours in learning and resource areas
    • Keeping up with developments in new technology, Wi-Fi, social networking and improvements in multi-media applications
    • Coherent timetabling and academic contact hours
    • Students Union and extra curriculum activities
    • High quality front Desk Interactions and access to student services
  • Defining project briefs and future proofing the buildings and estates
  • Managing and delivering a long-term maintenance and energy management strategy

Identified / recommended solutions which were presented by the speaker or highlighted in the debate are highlighted below;

  • Have an Estates Strategy – know where you are heading. Align you estate with your student curriculum and academic strategic plans and operational requirements
  • Listen to your customer, ask for and act on feedback, build strong open relationships and communicate regularly
  • Create an ethos of Gold Stand Customer Service. Ensure you services are designed and delivered with a focus on customers, recognising the needs of different customer groups. Provide feedback and agree an action plan with key outcomes
  • To deliver effective projects
    • Identify and engage with the right stakeholders. (Those who will use as well as those who will maintain).
    • Form the correct governance group and assemble the correct project team.
    • Education – Explain to our academic stakeholders on the project process and what is expected from them and how they can contribute. (*)
    • Don’t compromise on quality. Be clear and concise when writing specifications
  • Ensure capital investment are optimised for sustainability, environmental impacts, Carbon Reduction targets and Whole life performance
  • Agree change control process in advance
  • Be clear on individual and collective roles and responsibilities
  • Handover a project correctly and ensure the correct documentation is delivered in a timely manner.
  • Keep listening and learning

The industrial sector

When January 2014
What Industrial sector
Outcome How to deliver operational excellence in the industrial sector
Key conclusions
  • Be requirement driven not solutions driven – Standard technical specifications are generally unsuitable best to describe the outcomes you want rather than be prescriptive of solutions
  • Be adaptable – Industrial buildings need to be adaptable to be able to respond to both organisational need and technological changes, this means they need to be designed to be easy to modify
  • Be focused – Projects need to be structured to de-risk asset and capital investment, ensure buildings are designed to simplify the user interface and outcomes are measured and benchmarked to measure and ensure consistent outcomes

Presentations were given by the following individuals

The following KPIs for operational excellence were suggested across the three presentations

  • Ease of use and user interfaces for users
  • Easily adaptable buildings that can respond to business and technological change
  • Buildings that facilitate delivering value without imposing too much resource burden on organisations

The following key challenges were identified as being faced by clients & supply side in defining, procuring, constructing, and operating this sector’s built assets

  • Defining the brief – Most industrial clients do not have one standard operating model so defining their built asset needs is very difficult. Standard built asset technical specifications do not generally suit so it is best to describe the outcomes that are required and use the creativity and expertise of the supply chain to convert these outcomes into technical specifications.
  • Industrial clients require adaptable flexible spaces that can be easily modified to deal with market, business or technological change. Developers of industrial buildings in particular need to be mindful of the ways the environment is changing.
  • Projects should be structured to de-risk asset and capital investment and measure / benchmark the outcomes to ensure consistency of outcomes.
  • Ensuring building user interfaces are appropriate, users and operators of buildings are properly trained and buildings are properly handed over will create tremendous value from real estate projects.

Identified / recommended solutions which were presented by the speaker or highlighted in the debate are highlighted below;

  • Ensure that project briefs are prescriptive of the outcomes required and not the technical solutions.
  • Where possible adopt a standard operating model for elements of the business where built asset requirements and be standardised and continuously improved.
  • Involve the supply chain and technical experts early to add creativity to defining the potential built asset solutions.
  • Ensure users are involved in the design process to improve design in use is optimised.
  • Educate users and operators to be able to use the building effectively.
  • Have an approach which gives full visibility of your supply chain and facilitates the supply chain working effectively together.
  • Have a customer relationship management process in place which constantly reviews the built asset end user requirements and adjust both capex and opex delivery to satisfy client requirements.

The infrastructure sector

When March 2014
What Plane, trains and automobiles – infrastructure sector
Outcome How to deliver operational excellence in the infrastructure sector
Key conclusions
  • The use of information technology BIM supported by robust processes and procedures can reduce variation and change on infrastructure projects delivering up to 20% cost savings
  • Align asset management strategy and KPI measurement with the organisational strategy
  • Asset management approaches need to be aligned across both capex and opex and supply chains

Presentations were given by the following individuals

The following KPIs for operational excellence were suggested across the three presentations

  • Create asset management performance information that allows KPI’s to be created that better align with corporate strategy
  • Use technology to management, collect and review asset performance embedding intelligence in the infrastructure networks
  • Ensure sufficient strategic, operational and technical resource resides in the client organisation to act as an intelligent client and work with supply chains that have similar cultured, behaviours and are willing to invest in understanding the client

The following key challenges were identified as being faced by clients & supply side in defining, procuring, constructing, and operating this sector’s built assets

  • Defining and managing asset information is challenging for infrastructure assets and organisations.
  • Aligning the asset management strategy with organisational and corporate strategy is critical to avoid built asset value not been realised or being leaked from organisations.
  • Collecting the correct asset information for decision making requires planning and forethought.
  • Joining up infrastructure asset management is challenging across large infrastructure organisation because of the potential for silo ways of working to emerge.
  • An appropriate culture, behaviour and values are required across client’s organisations and their supply chains to optimise their assets.
  • Tracking asset condition in use can be very challenging across large complex infrastructure systems.
  • Stimulating innovation in the construction and management of infrastructure assets is very difficult. Using technology to create smart systems that can track and report on asset condition looks promising.
  • Matching the required investment to maintain the condition of assets can be very challenging because of the time horizon of budgeting cycles particularly in regulated or Government controlled sectors.
  • Infrastructure asset clients recognise the need to become intelligent clients and create effective relationships and alliances with their supply chains but getting the correct combination of strategic, operational and technical skills and behaviours is very difficult.
  • Creating a joined up single systems and process that is used across the organisation and supply chain is difficult to achieve due to difficulty in getting different IT systems speaking to each other.
  • It is difficult to identify and agree the sharing of infrastructure risk between clients and their contractors and clients find that suppliers do not supply a consistent level of performance or understand their requirements fully.
  • Forming relationships and contractual relationships that align with client needs is challenging.

Identified / recommended solutions which were presented by the speaker or highlighted in the debate are highlighted below;

  • Invest in defining how assets will support the delivery of corporate strategy and what information need to be collected and tracked to track performance in supporting this strategy.
  • Think about how asset management approaches can be future proofed. For example think what may be required in 2025 and try and design systems and approaches to be upgradable.
  • Ensure there is a responsible person within an organisation for defining asset management strategy and how capex and opex investments are to be joined up.
  • The quality of the digital infrastructure world is dependent on the robustness of data. Processes for defining, managing and updating data need to be agreed and rigorously managed. This data can be used to de-risk both construction and operation phases of built assets.
  • Technological solutions can reduce the cost of acquiring and managing asset information (e.g. mobile devices, RFID, quick response codes etc.).
  • Ensure client organisations have sufficient resource to act as an intelligent client and key skills do not only exist in the supply chain.
  • Ensure asset risk is understood and commercial arrangements and budgets are structured to deliver long term and short term outturns based on investing in mitigating these risks.
  • Look outside your sector for innovation and asset management ideas

The healthcare sector

When November 2013
What Healthcare sector
Outcome How to deliver operational excellence in the healthcare sector
Key conclusions
  • Ensure the right people/ teams are actively involved and ‘speak’ healthcare
  • Regularly undertake Post Occupancy Evaluations across your own estate and learn lessons from other healthcare estates operators
  • Plan for future changes in space/facilities requirements to allow for growth & ageing population and changes in healthcare technologies

Presentations were given by the following individuals:

The following KPIs for operational excellence were suggested across the three presentations

  • Clinical staff and patient satisfaction with workable space with regular feedback sought & obtained
  • Maximising space utilisation
  • Resource consumption to minimise costs
  • Flexibility to accommodate future requirements – particularly large technologies e.g. scanners

The following key challenges were identified as being faced by clients and supply side in defining, procuring constructing and operating this sector’s built assets

  • More with less/same resources – growing & ageing population with increasingly complex health requirements, but no demonstrable increase in resources – urgent need to optimise productivity from built assets
  • Strategic briefs need to improve to better define current and future requirements (as best can be foreseen or allowed for), operational performance targets, Whole Life Costs (& revenues & risks), etc.
  • Inflexibility of existing and new buildings to accommodate future requirements, rapid advances/changes in technology (access, layout/proximity etc.), and space utilisation/expansion
  • Limited radical challenge of current approaches – need more innovative solutions; consultants especially don’t challenge clients enough or ask others for help (pretend competence)
  • Limited understanding/interest from many supply-side companies on core purpose of facilities or patient/user/FM needs – overwhelmingly still focused on project delivery.
  • Procurement – limited early identification/engagement of supply side with demonstrable value-adding knowledge & experience

Identified / recommended solutions presented by the speaker or highlighted in the debate were:

  • Robustly engage all key stakeholders from the outset – patients, clinical staff, health tech providers, CFO, and FM, to maximise mutual understanding of future operational needs, financial constraints, client capability and possible delivery options
  • Have the right people in the client team, in the supply chain, and in the room! Have skilled internal teams led by clinicians; ensure supply side can ‘understand & speak healthcare’; only involve supply side companies that demonstrably add greatest value; use integrated innovative supply chains
  • Obtain regular data on performance in use – through relatively simple Post Occupancy Evaluations (POE) – complex options grind to a halt, overly simplistic options don’t say anything.
  • Monitor space utilisation – use in-use data from existing assets (own/others’ estates) to drive rationalisation/re-allocation and to win stakeholders over
  • Consistently use of Post Project Evaluations (PPE) coupled with POE to identify & share lessons; Government Soft Landings became mandatory from April 2016 on all centrally procured government projects
  • Procurement – P21+ & PSCP framework of pre-approved consultants/contractors really helps as has developed collaborative culture to drive continuous improvement to mutual benefit.
  • Use Whole Life Costing – or at least life cycle costs (BS 8544); identify core & peripheral costs;
  • Ensure the right people with the right attitude are on the right project – ensure all speak healthcare and focus on users’ operational requirements; select on value & values.
  • Have the confidence to participate and challenge – be proactive (not reactive), challenge status quo, be innovative in procurement, design, delivery and operation
  • Use innovative business models e.g. embrace concessions to leverage additional revenues

Drive continuous improvement through appropriate measurement against core purpose of built asset, radical innovation workshops involving all key stakeholders, and import/plagiarise excellence/innovation e.g. funky floor designs allow easy patching, standardise products to reduce cleaning complexity

The retail sector

When July 2013
What Retail sector
Outcome How to better deliver operational excellence in the retail sector
Key conclusions
  • Retailers’ built assets requirements focus on creating welcoming and attractive environments in which the buyer feels comfortable and confident that the purchases they make are from a reputable and reliable supplier; less visible assets include warehousing & distribution centres.
  • 20% of UK retail is now online, still increasing at 15%pa and ahead of all EU states and US, directly affecting retailers’ built asset requirements. Large ‘out of town stores’ giving ground to return of local stores
  • Providing highly attractive retail space is essential in a highly competitive sector – driving up footfall and increasing length of stay within the shopping centre and store is probably the most important factor for retail facilities. Constant tracking of consumer behaviour informs store design and rental yields.
  • Visibly reducing energy consumption is powerful marketing edge for increasingly eco-savvy shoppers and cost savings can increase profits by 5%.

Presentations were given by the following individuals:

The following KPIs for operational excellence were suggested across the three presentations

  • Reputation – its everything in retail
  • Consumer purchases – net sales
  • Consumer rating of the sales experience – enjoyment, satisfaction, repeat purchase
  • Consumer presence creating a sense of vibrancy & success – footfall
  • Tenant demand for space – willingness & ability to pay sustainable rent, continuous occupancy
  • Tenant collaboration to address shared issues e.g. security, crime, waste reduction
  • Health & safety of consumers, tenants and operators
  • Low resource (energy & water) consumption without compromising customer experience or stakeholder expectations
  • Minimal disruption to retail experience during refurbishment and tenant changeover

The following key challenges were identified as being faced by clients and supply side in defining, procuring constructing and operating this sector’s built assets

  • Need to constantly listen to & respond to users requirements
  • Creating a quality environment with the right look, feel & functionality whilst minimising capital investment and operating costs (heating, lighting, regular refits)
  • Anticipating and meeting future requirements of consumers – using foresight and influence to always stay ahead of dynamic competition
  • Creating stable revenues whilst having capacity & churn to bring new offerings
  • Need to engage and win over all key stakeholders in community
  • Maintaining health & safety for all visitors and staff (retail, FM, etc.)

Identified / recommended solutions presented by the speaker or highlighted in the debate were:

  • Constantly gather & analyse data – visitor footfall, consumer demographics through debit/credit & loyalty cards, etc.
  • Learn from mistakes & insights – fail fast & often – capture & share lessons e.g. in design guides or on knowledge portals
  • Create vertically integrated teams, co-located to drive collaboration
  • Drive collaborative action to address shared issues e.g. create & operate retail tenant groups to reduce crime
  • Recognise & reward excellent performance quickly
  • Keep supply side partners focused on value – engage in user workshops, use collaboration between competitors to drive continuous improvement & knowledge sharing