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Banking on savingsJune 2007

Maintenance based on the actual needs of the business can be cheaper and more effective than just sticking to manufacturers' service schedules. Roderic Bunn visits financial services house Nomura to see how business-focused maintenance has saved money and improved performance.

Mark Hounslow takes his responsibilities seriously. He has to. He runs Nomura International's Facilities Infrastructure Operations Team, whose job is to ensure that the bank s financial services are never disrupted by plant failure.

In the banking world, time is money. Down-time can lose millions of pounds in lost income. Even a recent refurbishment of Nomura's London headquarters - the move of two trading floors and a 900 m2 data centre - had to be done in situ without interruption to financial trading.

While asset management is part of the daily routine for Mark Hounslow and his maintenance team, it's easier said than done. "Planned preventative maintenance is based on generic tasks and frequencies," explained Hounslow. "Plant operating 24 h/day, seven days per week is maintained in the same way as plant operating nine to five thirty, five days per week. Heavily loaded plant is maintained the same as lightly loaded plant. This costs time, money and effort," he added.

Nomura's solution has been to adopt a business-focused approach to maintaining its building services. Business-focused maintenance differs from planned preventative maintenance by matching the servicing of plant to the needs of the business.

Enter BSRIA's Design and Facilities Management Innovation Group, armed with BSRIA s Business-Focused Maintenance (BFM) Toolkit. The BFM Toolkit is a set of electronic spreadsheets that enables facilities managers to assess the consequence and likelihood of failure for every item of plant in a building, and to provide a criticality rating according to business needs. This informs the required levels of maintenance.

Nomura's facilities team applied the BFM Toolkit to both its City headquarters building and its business continuity/disaster recovery site in London's Docklands. The information gained from assessing the building services using BFM - details of the assets, the maintenance frequencies, the tasks and the instruction sets enabled the facilities team to refine the tender for the M&E maintenance contract in 2005.

"As a consequence of using the business-focused maintenance approach, the tender return for the new maintenance contract came in around £130,000 lower," revealed Mark Hounslow.

Applying the BFM approach

The first step involved a full visual assessment of Nomura's engineering assets.

"Maintenance engineers tend to look at things from a systems perspective rather than a user's perspective," explained Nomura's facilities operations engineer Mark Rudd. "The business-focused approach concentrates on single points of failure and allows you to prioritise resources."

All plant was assessed for its condition and likelihood of failure, a process that also identified plant items that were deteriorating more quickly than normal. This process used a combination of reliability data for generic plant items, backed up by engineering judgement. Existing maintenance tasks and frequencies were compared with industry norms for all items of plant. Plant loading, maintenance history and redundancy were all factored in, as was the competency of the maintenance staff.

The likelihood of failure was rated on a 1-10 scale, with 10 as the highest likelihood. The consequence of failure to the business was rated on the same scale. Time to failure was estimated on a scale of one to 20 years.

The negative effects on the business were based on a number of criteria:

  • loss of revenue as a result of failure (for example, over £20,000)
  • loss of staff productivity (for example, when staff were not able to work for more than three hours)
  • increase in customer complaints (say, by 20 percent)
  • negative media coverage.

Once the consequence, time to failure and likelihood of failure for each plant system or component was rated, Nomura's facilities team were able to apply the appropriate levels of maintenance according to the determined risk. This ranged from basic housekeeping, through legislative requirements to best industry practice.

Higher-level maintenance would involve monthly inspections as a minimum, along with condition monitoring.

As a result of the BFM exercise, Mark Hounslow was able to change many maintenance frequencies. For example, shower heads are now pasteurised on a monthly rather than a weekly basis, and the 24 h chilled water circuit is maintained on a three-monthly basis rather than monthly.

"This approach also highlighted systems that we had missed, and maintenance that we weren't doing," explained Hounslow.

The facilities team created a new database of maintenance requirements and used it to inform the tender for the maintenance contract. "Once the tenders were assessed and the contract awarded, we deleted the old database and started the new business-focused system," said Hounslow.

Reaping the benefits

Nomura's facilities team report that the BFM approach has vastly improved its maintenance regime and the performance of the business.

"Many continuous failures of equipment have been eradicated, either through refurbishment or by designing redundancy into the system," said Mark Hounslow. "The building is also no longer running at 110 percent all the time."

The biggest benefits have undoubtedly been in reducing labour requirements and reducing the cost of the three-year maintenance contract. Nomura made a saving on the maintenance contract of £300,000 in the first year, of which around £130,000 is directly due to adopting BSRIA's BFM Toolkit, which will be repeated in years two and three. The remaining savings are due to the restructuring of assets during Nomura's refurbishment works and by reducing the amount of plant and equipment.

"The BFM Toolkit also helped to inform the capital investment plan, because it identified pieces of kit that may need to be replaced early," said Mark Rudd. "It makes refurbishment more predictable, which makes the finance director happier."

Nomura also invested £100,000 in systems awareness training over two years for its own engineers and those working with service providers. "This has made them more informed about complex systems" explained Mark Rudd. "Maintenance engineers don't always understand the consequences to the business of turning things on and off."

Lessons learned

While the BFM approach has directly benefited Nomura International to the tune of £130,000/y, there were other benefits.

"I don't get as much negative feedback as I used to, and not as many moans from business heads," admitted Mark Hounslow. "The BFM Toolkit also revealed that our computerised management system didn't contain enough detail, such as the number and location of valves and so on. That can cause problems with maintenance instruction sets."

Does Nomura feel that it has achieved maximum savings?

"Maybe we need a trigger point halfway through the maintenance contract to re-focus the service provider in the last year of the contract," suggested Hounslow. "While the BFM Toolkit did all the hard work for them, perhaps we should revisit it, look at the failure rates and maintenance history, and see if we can fine-tune it. But it might take too much time and effort to find an extra five percent," he warned.

Hounslow is openly critical of maintenance providers who are failing to keep up to date with the latest thinking.

"We sent a request for information to nine contractors containing a standard set of questions" said Hounslow, "and one of those questions was: what is your understanding of business-focused maintenance? None of the final six contractors - in their tender returns, or presentations - made any mention of business-focused maintenance."

"When you consider that profit margins on service contracts are very low, leaving it out seems a bit shortsighted," said Hounslow.

"A contractor's presentation on the benefits of business-focused maintenance, covering capital investment, prioritised resources, and the use of labour only on the areas where it s needed, would push my buttons. If they could produce a £130,000 saving, they'd get the contract."

For more information contact Design & FM Engineering at BSRIA:

Tel: +44 (0) 1344 465600
or Email fm@bsria.co.uk 

 

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