Sometimes it seems ironic that while we have more data than ever, we may not have enough useful information. I suppose this is a modern day version of the needle in a haystack – too much hay makes it hard to find the needle.
A key premise of the Strategic Facility Guide approach is that we probably already know a lot of what we need to know, but it may not be organized in a way that makes it easy to see, understand, and use. A second key premise is that understanding how much more we need to know right now reduces the amount of additional information to obtain (making things faster, less expensive, and easier to see the needle with less “hay” to go thru to find that needle).
Dimensions to Assess
Our approach is to build a scorecard of facility dimensions with summary values (metrics) based on varying levels of “Facility Assessments.” This can both summarize what we know about a particular property (the value), and describe the accuracy and precision of this information (metadata about the value).
For example, one often important dimension of real estate is location.
- The raw data about a location is the physical street address.
- The useful information is whether the location is good or not.
- The metric would be how much value the facility’s location provides.
Context is important. Right away, you can see the assessment of “good” and measure of value will vary depending upon the primary purpose of the facility. Location is important for a retail site in terms of customer market and traffic. It is important for office/R&D sites in terms of labor market. It is important for logistic centers in terms of transportation efficiency. It can be important for access to natural resources, favorable regulatory/tax environments, or even just status. Conversely, for some facilities, location just may not be that important.
There are a number of dimensions that can be considered for each of your facilities: location, utilization, condition, value, net operating cost, etc. The various dimensions will be discussed more elsewhere.
The key question about each dimension is: How precisely do we need to measure it? (as in the precision of the measurement). The answer to this will tell us the level of assessment we should use and the units of measurement.
Levels of Assessment
Several levels of assessment can be done, so let’s clarify those first. ASHRAE defines levels of Energy Audits that I find useful, so if you are aware of them, the levels below will sound familiar. I have clearly taken some artistic license with also added a base level (Opinion) that they are missing:
Opinion
This is the most basic level of assessment, one that is free on every topic. This is our intuitive, biased, judgement based on whatever data or misconceptions we have about this particular dimension of the facility. This assessment can be that of a single person or from a survey of random sample with almost no qualifications required.
An Opinion level assessment is the starting point, and we can quickly have these for every dimension of every facility. They may be precise enough when the dimension being evaluated is not critical for that particular facility. Widely agreed-upon perceptions can approach the next level of precision, while sharply different perceptions indicate a need for further assessment.
Many people question the value of an Opinion level assessment, so I am going to digress for a moment to address this. This level assessment can provide the highest ROI since it costs so little to execute and sometimes “bad, good enough, great” is a precise enough measure. Even more important is the “visibility of thought” it provides. When you document an assessment of a facility’s location as “good enough” based on an Opinion level assessment, the relatively low confidence rate of that information is clear to decision makers allowing better assessment to be made as needed.
Inspection
This is a basic audit level assessment, and includes things like tabletop review of data, visual inspection, calibrated estimate, review of sample testing/readings, and benchmarking. This level of assessment is typically performed by a qualified person or group.
An Inspection level assessment is useful to set the baseline for the dimension being evaluated and is often enough for steady state operations. This level assessment can identify no-cost/low-cost opportunities, help prioritize detailed assessments, and provide order of magnitude budgets. This is a recommended minimum level of assessment on high value and critical facilities.
Assessment
An assessment (as the term is used here) level will include a more detailed evaluation of a dimension of interest. This type of assessment would include facility condition assessments, planning-level and feasibility studies, typically with some data collection/validation and business case level financial analysis.
The purpose of this assessment could be to quantify potential performance improvements, identify cost savings opportunities, adjust to changes in business need, improve the facility asset life or value, and address sustainability issues. The results would include defined operational changes or capital improvements with planning level costs and benefits.
Technical Study
This is the highest level of assessment, which includes engineering studies and modeling resulting in investment-grade project scopes. These assessments are typically unique in scope to the facility and need, defined during an Assessment level evaluation.
This level of assessment is warranted for large, expensive, and complicated projects, those that require this level of detail for capital investment approvals, or any evaluations required for key decisions on a facility’s disposition.
Using the premise that all metrics help reduce the level of uncertainty (see article on Measurement vs. Planning), we can apply the level of assessment that is “good enough” for this facility for right now. We can use the lower precision assessments across the board and selectively use higher precision assessments where warranted and within our budgets.
