Issue link: http://digital.corporatepress.com/i/284031
46 | march/april 2014 | Facilities Manager facility asset management facility asset management U nless you spend time on many campuses, it's difficult to ap- preciate how different each can be. While they might look similar as you drive past the front gate, the moving parts inside are unique. This is true for the organizational structure in particular. For decades our educational institutions have grappled with the principles of central- ized versus decentralized operations, and continue to do so today. The quandary of the split between facilities management (FM) residing centrally or within auxiliaries is alive and well. Some will argue that cost savings are achieved through economies of scale resulting from a largely centralized opera- tion. Others feel strongly that only decen- tralized FM provision will effectively meet the unique priorities of each major facility owner on campus (be it residence life, athletics, student health, union, or even general fund classrooms and laboratories). The split on this topic is demonstrated by the fact that over time some of our peers have drastically redesigned their FM operations from centralized to decen- tralized and back again. But if you also subscribe to the idea that each campus operation is unique, then it's reasonable to assume that there are a few basic rubrics that assist in finding the "line in the sand." FINDING THE THRESHOLD Size For many, the size of the auxiliary operation makes a difference. Unfortu- nately, smaller operations are unable to employ enough staff to represent every discipline, such as facili- ties management. As such, what is often referred to as "profound knowledge" is not present regard- ing FM. Without this critical mass the operation still struggles to ef- fectively manage any maintenance functions with any sophistication. On the other hand, some auxil- iaries like the large residence life departments on many campuses are more than large enough to employ a full complement of FM staffers. Given this spectrum, what is the threshold that an auxiliary manager would look for when considering the make-versus-buy decision from central operations analysis? Make/Buy Metrics One approach is to base it on normal make/buy metrics. In general when you are spending the equivalent of 150% of the cost of an internal full-time- equivalent (FTE) on purchased services it is likely that FTE should be hired in-house. However, one FTE for a small organization needs to be managed by someone with profound FM knowledge. Typical management/supervisory ratios today suggest a 1 to 7 maximum standard. Therefore, when the pur- chased services of any one maintenance trade reaches the point of 7 (FTEs) X 150 percent ($FTE with overheard mark-up) of centrally contracted trades persons, a manager is implied to be built into that fully loaded cost. At that point the cost of the manager should be nego- tiated out of the $ FTE mark-up and a supervisor can be hired by the auxiliary for essentially a "wash." Funding In any institution budgets and funding are critical, and for central plants and their auxiliary counterparts, this holds true as well. This area also varies from campus to campus, but there are some basic areas of analysis that are universal. The most important distinction is that auxiliaries are typically self-supported. That is to say that they are designed to operate and provide services within the budget funded by the purchase of the services. This is different from other positions on campus included within the general fund or overall campus budget, facility asset management "Line in the Sand" Between Auxiliaries and Central Plant By Matt Adams, P.E.