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Efficiencies, Targets: FM’s Response

Efficiencies, Targets: FM’s Response. 15 July 2009 Prof Ilfryn Price FMGC, Sheffield Business School. Some background. Operational Efficiency Programme http://www.hm-treasury.gov.uk/vfm_operational_efficiency.htm

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Efficiencies, Targets: FM’s Response

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  1. Efficiencies, Targets: FM’s Response 15 July 2009 Prof Ilfryn Price FMGC, Sheffield Business School

  2. Some background • Operational Efficiency Programme • http://www.hm-treasury.gov.uk/vfm_operational_efficiency.htm consistent, comparable data – organisations need consistent, comparable data to be able to benchmark their performance against others to know whether the services they deliver constitute good value for money. Both public and private sector best practice should be used to raise standards • ERIC (and similar) are not consistent and comparable as to cost (B Williams pers com) • Cost (per m2) encourages inefficient asset utilisation (Price)

  3. The Lean Asset™ Keep what is needed to the standard needed. Dispose of what is not needed • Businesses need to focus on enough asset to deliver needed outcomes • Compare Toyota and General Motors. GM focussed on cost per unit produced, Toyota on cost per unit sold. Toyota produced the same volume, at higher quality, with 38 % less space. • Conventional asset management makes the same mistake • Asset appraisals on indicators of outputs per unit of space such as income, patient suitability, customer attractiveness, staff productivity, occupancy effectiveness • Peer reviewed theory @ http://digitalcommons.shu.ac.uk/fmgc_papers/

  4. The Lean Asset™ • GM ended up with low cost production but went bust • c.f the (NHS, and others) who still end up with a large portfolio of low quality, underutilised space and a back log maintenance bill • They then over estimate the new space needed and pay too much per unit area to construct it! (Price and Williams in preparation) Cost = Area

  5. A different approach • How much space have you got? • How much should you have for the size of business? • Where is the excess? • What should the rest cost?

  6. Meta-perfomance (ERIC)

  7. Foundation trusts & applicants

  8. Large Acutes, T Hospitals and Specialists

  9. As before with Acute specialist trusts removed

  10. Teaching trusts outside London

  11. Occupied area within departments

  12. The challenge Removing 55,000 m2 (15 wards' worth) of space from the total without affecting the patient area raises the RHQ relative efficiency to 100% relative to other teaching Trusts outside London

  13. Preliminary data analysis Good corporate and government HQ environments achieve 10 to 12 m2 Best achieve ca 7 m2

  14. Pitfalls and problems • ERIC data (now getting worse) • Carparks, residencies, operational service buildings • Can make old, cramped space look efficient (especially ? Mental Health) • Trust estates databases do not categorise space by service-line (which is hindering specific benchmarking trials) • Goodhart's law

  15. The future should be clinical comparisons

  16. What should be there

  17. What is currently included but not separated out • Residencies • Multi-storey car parks • FM Operations (Power, workshops, launderies, catering units) • Leased / detached office premises • Conference / education Centres

  18. Data Needed: Trust Level

  19. Data Needed: Building Level

  20. Data Needed: Building Level

  21. Physical space, the most important and least appreciated tool in contemporary knowledge management (Peters) An estates strategy must support, but can contribute to, a business development strategy.

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