Facility Management: A Literature Review
Firms commonly manage resources such as human resources, financial, information and products that have been significant for the competitiveness, profitability and sustainability of the business. However, there is another resource or asset which has not been discussed and given so much attention: the facility. Facilities are commonly known as the supporting infrastructure, equipments and tools which are essential in the workplace and for the business to function properly.
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In this paper, the focus is on facility management which has recently gained attention from the managers. Discussed herein are the origin, concepts, and scope, as well as its importance not only in business but also to other organizations such as hospitals and schools. The objective of the paper is to review related literatures that provide information and better understanding of facility management.
2. Origin of Facility Management
The concept of facility management (FM) was first conceived in the United States and in 1980s, it has been spread over the US and Europe (Nonoyama, 2006). Facility management then was originally focused on cleaning, maintenance and security but has eventually developed to include more strategic and broader services. The concept was brought to Japan during the mid-1980s when businesses realized the need for facility management during consolidation of office or when building new ones. FM has become helpful in determining the design that would facilitate proper work flow, document flow and movement of people (Nonoyama, 2006). Facility management today is not only concerned on the maintenance and security but also on the proper design of the system of facilities for better maintenance, security, cost reduction, and maximum functioning of every facility involved in a business.
3. Facility and Facility Management Defined
One can imagine how a business performs its activities without the necessary facilities to support such activities. According to Alexander (1999), facilities in a business context are the premises and services required to accommodate and facilitate business activity. Therefore, facilities include the building itself where business activities are conducted and where hardware such as equipments, tools and furniture are located. Because it includes the equipments and tools, it has direct significance to product or service development. The quality of the products and services that a business creates depends so much on the functionality and performance of its facilities. Additionally, the building itself and the related systems (e.g. HVAC system) should be designed based on its identified function. For example, the design and function of a hospital building is definitely different from the design and function of an industrial building and will depend on the type of equipments that will be put into it and the people that will use the building.
The concerns therefore of facility management encompasses the management of the above mentioned facilities. Traditionally, facility management was concerned with the ‘hardware’ such as the buildings, furniture and equipments (Becker, 1990); Cotts & Lee, 1992). However, Alexander (1999) and Then (1999) later included the ‘software’ such as people, process, environment, health and safety in the responsibility and scope of facility management. This definition suggests that facility management should be concern not only in the physical assets but also in the workplace itself where people and process interact with the physical assets and the results of such interactions which involved the health and safety of the people and the environment of the organization.
Moreover, Becker (1990) further defines facility management as the building in use, the planning, design and management of occupied buildings and their associated building systems, equipments and furniture to enable and to enhance the organization’s ability to meet its business or programmatic objectives. Cotts & Lee (1992) define facility management as the practice of coordinating the physical workplace with the people and work of the organization, integrating the principles of business administration, architecture, and the behavioral and engineering sciences.
For Alexander (1999), facility management is the process by which an organisation delivers and sustains agreed level of support service in a quality environment at appropriate cost to meet the business need while for Then (1999), it is a hybrid management that combines people, property and process management expertise to provide vital services in support of the organisation. Tay and Ooi (2001) provide a broader definition of facility management as the integrated management of the workplace to enhance the performance of the organisation.
With all these definitions, facility management therefore is a practice or discipline that encompasses a wide scope while its primary objective is to provide support for the enhancement of the workplace. In short, facilities management is simply the administration of the workplace, its people and its environment.
4. Scope and Objectives of Facility Management
As noted above, the primary objective of facility management is to support an organisation in enhancing the workplace. The workplace, on the other hand, involves the people, the physical and financial resources, and the processes and operations of a business, thus facility management practices must have positive effects on these resources. Additionally, the strategic objective of facility management is the effective management of facility resources and services in providing support to the operations of organizations (Nutt, 2000).To be able to enhance the workplace, the objectives of facility management are:
(1) to design facilities for efficient use;
(2) to optimize facility operating cost; and
(3) to improve job satisfaction of employees (Nonoyama, 2006).
Therefore, the result of facility management is a highly functional workplace. Read also under what circumstances should a company's management team give serious consideration
4.1 Objective 1:To Design Facilities for Efficient Use
It is included in the practice of facility management to design the workplace (e,g. plant, office or store) and other facilities in such as way that they will be efficient and of importance to its users. The users may include the workers for manufacturing industry settings while for commercial service organizations like hotel, restaurants and malls, users include the customers. Efficient here means that every space and equipment is functioning and useful for the business not only for the present but also during its life cycle. Design of facilities includes: (1) the architecture, structure and location of the building; (2) the strategic positioning of equipments that will help users perform their task efficiently; and (3) the presence of important systems or facilities that are necessary to perform business activities.
For example, a manufacturing plant must be located near its suppliers and where there is an easy access to transportation; its equipments must be position based on the processes involved (e.g. all machines for assembly must be placed in the assembly area while all test equipments can easily be found at the test area); and there should be warehouse where finish products are stored and that warehouse must be designed to be accessible to delivery vehicles.
The design of facility is often perform by external resources like outside contractors. Contractors are companies whose focus and expertise are on the design and construction of facilities. They employ architects, engineers, surveyors, and technicians. According to Payne (2000), there are four areas in which various professionals are involved in facility management:
(1) property and built environment that require the professional skills of architects, legal services, space planners and quantity surveyors;
(2) the interaction of people with the built environment that has required human resources professionals, building services and environmental engineers;
(3) the technical expertise of maintenance staff (e.g. equipment technicians); and
(4) the process that take place within the buildings such as catering, cleaning, security, mailroom that require practical operational management form a range of professional backgrounds. Organizations need these professionals to ensure that the design has integrated the “hardware” and the “software” components of facility management.
In the design of facilities, most organizations seek professional help from external sources because the activities involved in designing are not their core competency; as noted above facility management only supports core business, it is not the core business. For example, a manufacturing organisation (e.g. Semiconductor company) wants to have an assembly facility in another location. Although the organisation may be able to determine the strategic location for the facility, the company, since its activities are in electronics field, it would be better and practical for them to externally outsource the design and construction of the facility in order to focus more on the business itself.
However, it is important that the corporate plan of the firm is integrated or in line with the design of the facilities. According to Bernard Williams Associates (1999), facility management has three facets: sponsorship, intelligence and service management. Sponsorship pertains to the ownership of responsibility for the provision of facilities, the implementation of the policy involved in the provision of the facilities, and the provision of maintenance, allocation, accommodation and services of facilities in order to perform corporate objectives. Intelligence, on the other hand, is the component of the facility management that determines the needs of the business and ensures that these needs are met effectively by employing techniques and technology that will support the facilities.
Service management is the services related itself such as the design and construction, cleaning, maintenance and security that are usually provided by external resources. Design and construction are outsourced from construction companies while cleaning and maintenance (of building for example) are outsourced from janitorial services companies. Maintenance of equipment such as machines is either outsourced from the supplier or performed by in-house staff like technicians to ensure continuous operation of the machines.
In other words, the design of the facilities, not only the building but also the equipments and tools, is created based on the needs, processes and objectives of an organisation but are carry out by the experts that are usually external to the organisation. As noted, an organisation must create a corporate plan where the strategic and operational needs, core business and objectives of the organisation are clearly stated. Additionally, the needs of an organisation are continuously changing that requires the facility design and layout to easily adapt and comply to the changing needs of an organisation.
4.2 Objective 2: To Optimize Facility Operating Costs
According to Nonoyama (2006), the greatest advantage of facility management is cost reduction through optimization of facility operating costs. In Japan, for example, the facility operating costs are composed of rent and service fee, maintenance, depreciation, administrative, taxes, cleaning, utilities and others (JFMA, 1998). When an organisation owned its facility, depreciation accounts to almost 50% of the total operating costs followed by maintenance and administrative costs which are both 15% of the total operating costs. Since facility management has design the facility to be at its most efficient, it can then reduce costs. To reduce maintenance costs, a facility must be designed to be low-maintenance. For example, the HVAC system of a building may include energy-saving equipments and low-maintenance air conditioning systems. Cost can also be optimized by designing every space in the workplace in such a way that it can contribute to productivity and efficiency of the organisation.
Outsourcing of facility management-related services also reduces the cost of services needed by organizations especially today that many facility management-related service providers have emerged. Presently, facility management has also become another industry; there are companies who offer clear-cut energy savings and cost reduction, building maintenance which includes maintenance of the systems in the building and the building itself, and office furniture supplies and interior design (Nonoyama, 2006). There are also computer manufacturers and software providers that offer services for the maintenance of an organization’s information technology facility. This industry exists primarily to help an organisation become more focus on its core business.
In the United States, US companies outsource most of their facility management-related operations to service providers according to the American Management Association (Nonoyama, 2006). Figure 1 shows the percentage of the operations that have been outsourced by American companies. In the figure, it is noticeable that US companies do not outsource the maintenance of their equipments because it is more practical to have in-house experts that will maintain their machines and equipments to ensure continuous operations and production. Additionally, equipments in the manufacturing industries have become part of their core business; that is equipments have become a critical part of a company’s production process and must not be entrusted to external resources.
In Europe there are also several companies that specialize in providing comprehensive facility management services as shown in table 1:
Table 1: Facility Management Service Providers in Europe (Nonoyama, 2006)
Outsourcing of FM-related services has provided an organisation the expertise needed for the maintenance of its facility while the organisation has maintain its focus on its core business. Operating cost has been reduced because facilities have been maintained, will not depreciate easier and have longer life.
4.3 Objective 3: Improve Job Satisfaction of Employees
Employees are the primary users of an organization’s facilities, thus are affected by facilities design and operations. Employees are actually part of the “software” facilities that are considered in the design of every facility. Considerations are given to how users can maximize the usefulness of the facilities, to what facilities are needed by the workers, to how safe to use the facilities and to how such facilities can improve their work and their performance. When employees are safer in the workplace, employees will be satisfy with the job thus increasing production and benefiting the organisation. Company provides facilities for the safety and comfort of the employees through facilities management.
5. The Facility Manager
The primary practitioner of facility management is definitely the facility manager aside from the experts mentioned above. According to Tay and Ooi (2001), “a facility manager reports directly to the director or top management of the firm on workplace issues and performance. He received formal training in multiple skills like human resource management skills, financial management skills, and technical skills to manage the workplace for the purpose of enhancing corporate goals. He is likely to lead and manage a facility management team, which assists the day to day operations in the workplace while he focuses on strategic workplace planning and organizing issues.”
Moreover, a facility manager is also a business manager who is responsible for promoting organization’s productivity and protecting the employees’ quality of life. Productivity is promoted by the facility manager by ensuring that every facility that are important in production function properly and effectively and as stated above, every space in the workplace contributes in productivity. A facility manager protects the quality of life on employees by creating comfortable and safe facilities and workplace that help employees perform their job easily. A facility manager ensures that no facility can create harm, hazard or danger to employees through maintenance and regular inspection of facilities. He is a business manager by performing responsibilities not only at the operational level but also at the business level, keeping in mind that he has to perform his jobs strategically to create improvement and give the organisation a competitive advantage. At the business level, a facility manger must ensure that facility strategic plans match corporate strategic plans; capital expenditures are planned and controlled; employee productivity is maximized; and costs are minimized and predicted (Connors, 2003).
Because of the broadness of the tasks of a facility manager, it is recommended that facility managers have previous experience in office services, construction and/or engineering (Price & Akhlaghi, 1999). This is because the job of a facility manager is technical in nature but also requires understanding of aspects of business such as cost reduction and people management. Cotts & Lee (1992) and Bernard Williams Associates (1999) added that leadership and communication skills are the most important attributes of facility manager to be able to hold effective employees. This is because a facility manager should effectively lead a team of mostly technical people at the same time should have the awareness of how to provide quality life to the people at the workplace.
Facility managers are also responsible in protecting the organization’s assets by providing security. The importance of security in the facility management profession is driven by (1) homeland security; terrorism and war; public and media; liability and corporate alliance; increase in cyber threats/attacks and identity theft; and technology (TFM. 2006).
Information technology also drives and requires a facility manager to be highly technical to be able to have the intelligence needed in integrating technology with the facilities of the organisation. According to Bull (1996), IT today is not only considered as one of the facilities of an organisation but has become extremely important in managing the business because it holds external company information, customer and supplier information, building security information, and production and operation information. IT is also important in planning, designing and storing facility information. Computer Aided Designs are used in the design of the building while data bases are linked to CAD for facility management applications (Connors, 2003).
For the facility manager to measure the performance of his team, Nutt (1999) suggests the following performance criteria:
(1) the extent to which facilities support or can be adapted to the changing needs of an organisation;
(2) the contribution that facilities make to organizational effectiveness;
(3) the value added by effective management;
(4) improvements in service and environmental quality; and (5) the risks associated with using facilities.
6. The Future of Facility Management
It is more likely to see facility management as driven by the changes in technology and the business environment. It is also likely to see the industry of facility management to grow due to the need to reduce operating cost and due to the need of companies to focus more on its core business driven by increased level of competition. The NLI Research Institute also formulated a diagram that shows the environmental changes that encourage the spread of facility management.
Based on the most literatures, facility management has been an important practice for the organizations that seek to integrate the physical assets (facilities) and the intangible assets of the organisation. Such integration requires careful management but has been proven to be of great benefit to the organizations.
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