Spotlight on an institution in one of the constituent groups: small institutions, community colleges, comprehensive/doctoral institutions, or research universities
By Richard Robben and Tom Moriarty
Restructuring Adds Facilities Maintenance Efficiencies
With postrecession budgets still strained, the University of Michigan (UM) leadership saw further significant reductions coming for 2009 and beyond. The facilities maintenance budget alone was to be cut by 10 percent over four years. At the same time, UM planned to add a 2.1 million-square-foot pharmaceutical research and drug manufacturing facility and a 1.3 million-square-foot hospital.
Something had to give.
Under contract with the business office, a consulting firm worked with plant operations to perform an initial assessment of policies and processes. Results indicated several opportunities to improve our facilities maintenance organization through restructuring.
Early outcomes show significant efficiencies, including reductions in cost per square foot of facilities maintained and the ability to allocate costs to discrete assets, allowing for more control over capital renewal decisions.
Reasons to Restructure
Several factors motivated us to consider significant operational changes, including:
- A workforce of which a large portion would become eligible for retirement within the next five years.
- Rising cost per hour of 13.3 percent for maintenance, between 2006 and 2009.
- Resource expenditures (labor hours, materials, contractor costs) that were not consistently allocated to specific assets. Annual work orders established nondiscrete buckets in which we recorded labor and material resources.
- Work that was not planned or scheduled using a consistent method across work groups, but centered on individual workers planning and scheduling their own projects.
Pushing the Process Forward
Fortunately, the APPA award-winning plant operations department had a sophisticated computerized maintenance management system (CMMS)—and the support of executive leadership. Using CMMS data analytics and the help of a maintenance management consulting firm (Alidade MER), we established five objectives: (1) plan work more deliberately, (2) schedule work more efficiently, (3) align workforce location with work location, (4) identify the most qualified worker for the particular assignment, and (5) establish asset management methods. A key part of our plan was to restructure our large number of independent shops into four regional locations, with one group of centralized trade shops.
In 2010, we started our work with a pilot area on campus, the North Campus Region (NCR), with approximately 4 million square feet of mixed-use facilities. Prior to restructuring, 41 FTE labor years were expended on the NCR annually. We reduced this number to 32, anticipating significant efficiencies.
Understandably, NCR's supervision and workforce had some difficulty adjusting to the culture shift from near autonomy to highly structured management of work activities. Town hall meetings allowed for discussion and airing of issues, and improvement teams developed constructive ideas for problem solving, which led to increased acceptance of the changes.
After the three-month pilot implementation, results were positive, and we expanded the processes to additional parts of the campus. Today, two regions are up and functioning, with a third in development, and we've transitioned half the central shops. Notable performance improvements include:
- Reducing by nearly 15 percent the number of required FTEs.
- Allocating to discrete assets nearly 100 percent of all work.
- Scheduling 90 percent of all work on a daily basis.
- Moving approximately 43 percent of the maintenance organization to the new processes, with total annual savings of more than at $1 million.
The university is continuing to implement this program in the facilities department and will extend it further into utility operations as well.