Table of Contents
Asset Maintenance Policy 2
Maintenance Techniques and Programmes 4
Maintenance Costs 6
Benchmarking of Maintenance Cost 7
Maintenance Outsourcing Strategy 8
Advantages of Outsourcing 9
Appendix 1 14
The SSE Hydro, Glasgow has been designed as part of the SECC (Scottish Exhibition and Conference Center) complex. It is a multipurpose indoor arena meant for public events, exhibition, indoor entertainments as well as sporting venue and is situated on the northern edge of the river Clyde. It has the capacity of 12,500 people with 120 meter span of the roof having a shallow dome made up of diagonally latticed steelwork. The façade is an Illuminated Technicolor star attraction of Hydro with the external walls of the venue being completed fitted with translucent, air-filled ETFE cushions. The ETFE panels are arranged with orthogonal fashion in the horizontal rows to create an impression of building being wrapped.
SSE Hydro utilizes a systematic methodology of asset maintenance and management as it plays crucial role for better resource utilization as well. There are many ways that can be considered for doing asset maintenance work related to the creation of organizational structure and designing its operations.
This report is all about the suggestions as to how the assets of SSE Hydro are efficiently utilized and managed. It includes the maintenance policy, its techniques and programs, maintenance costs and the outsourcing strategies being manipulated for the purpose of proper functioning of SSE Hydro.
Asset Maintenance Policy
To put in a proper perspective, maintenance policy refers to a strategy statement that tends to determine as to what level of maintenance is needed so that the assets of an organization are kept in fully operational condition (Ben-Daya, 2009). SSE Hydro has a number of components that effectively define its maintenance policies, procedures and preparations. These are all about maintaining its base asset so that they will continue in its effectiveness for which it is meant. So, it was imperative to assemble a maintenance plan and come up with the maintenance objectives and performance standards. The SSE Hydro has the following elements:
Maintenance Objectives: being a sporting venue with a capacity of 12,500 audiences, SSE Hydro provides a combination of reusable, removable and retractable seating arrangement so that there could be comfortable environment for staging and concert layouts. Not only this, it is also suitable for configuring sporting events. Therefore, it is in good taste that the venue should be kept in proper condition and that its use of assets are maximized. The purpose is to integrate it with district-wide public transportation to facilitate a new civil amenity.
Maintenance Requirements: the intentions of the organizations are to serve with this facility for the next ten years. So the budgets, workloads and priorities are also related to service and policies. There are a large number of programs of works that have been worked out to be undertaken in medium as well as long term with regards to the building’s expected service, standard, budgets and execution methods. Timing and cost are important elements in this, so to make it more productive, the maintenance requirements can be narrowed down to specific terms as: day to day covering of routine repairs, provision of frequent and cyclical maintenance for works like paintings, roof repairs and caretaking. It also includes special upgrading of various components and elements.
Maintenance Management Strategy: in order to ensure the efficiency and effectiveness of the facility, it is also necessary to ensure the usability of the services and assets with minimal interruption (Dhillon, 2006). It starts with a systematic and thorough inspection of the facility keeping in mind it’s all other assets so that the economic life and utility could be maximized (Jones & Sharp, 2007). In the case of clear anticipation of failures, there are appropriate procedures for preventing and rectifying them. Strategies are also well laid down involving a planned course of action to deal with unfavorable consequences such as deterioration caused by climate and activities done by users. As the motto is clearly stated already, that is, to provide an extremely sustainable entertainments and sporting venue. Therefore, the overall performance of the assets can be monitored as per the plans and if the maintenance is not carried out, then the proper explanation of the consequences need to be explained.
Variables that affect Asset maintenance: SSE hydro is intended to cater to a fairly large mass of thousands, so there are obviously certain factors and variables that come into play and these are:
- Size: it is the first and foremost element that needs to be clearly mapped as far as maintenance is concerned. So, keeping in mind the size of SSE Hydro, decisions were taken to formulate the policies in large scale and priority basis.
- Complexities: the complexities of an organization generally add to the woes of its management department. SSE Hydro, however, has taken care of it as every department and worker is assigned a proper task of maintaining it.
- Time: it is an important factor that needs to be taken into account as a top priority. All other maintenance activities are dependent upon it right through the beginning till the end such as procurements of related equipment, availability of technologies as well as quality service providers.
- Internal decisions: the decisions such as financial and executive are based on proper communication and interactions of different departments and they in turn prove to be deciding variable in terms of maintenance.
Maintenance Techniques and Programmes
The maintenance techniques are a set of usable procedures being incorporated by an organization in order to utilize the entire capacities towards maintaining its effectiveness (Schneider, 2006). So, to ensure the effectiveness of most prominent techniques, the management of SSE Hydro needs to address the following strategies:
Planned Maintenance Programme: the planned maintenance programmes in SSE Hydro are effectively interfaced with AMMS. It involves planned preventive maintenance, corrective maintenance as well as planned improvement maintenance. The overall purpose of employing these aspects of maintenance is to efficiently utilize the resources such as manpower, material, machinery and money.
Asset Maintenance Management System (AMMS): AMMS provides a holistic approach with respect to the system operation and performance with a purpose of specifying optimum manpower, machinery and methodologies for measurable results. The inclusion of AMMS is a significant policy measure that determines the direction of proposed maintenance plan. It is basically used to track asset register that is helpful in getting elaborate system information as well as life costing data solutions. The up gradation of AMMS in SSE Hydro is hugely beneficial in having a fair understanding of system and its equipment. AMMS module helps in the scheduling of maintenance so that real time information monitoring and control should be delivered (Jones, 1994). It also assists in preventive maintenance regarding schedule, frequency, resource planning and cost information. AMMS registers all the relevant information with respect to maintenance and response time. Finally, SSE Hydro expects AMMS to also provide life cycle cost by putting detailed information of the equipment in terms of specifications, manufacturer’s instructions, operation and maintenance procedures.
Cyclical Maintenance Programme: the planned cyclical maintenance programmes in SSE Hydro are utilized to carry out regular improvement and renovation works which include maintaining of properties in their proper condition, enhancing the appearance of the features as well as preempting cost rectification work. Also, cyclical maintenance takes care of the value of capital investments along with the life of the property. The management staff of SSE Hydro utilizes complete management and resource in the domain of maintenance painter-work programmes, maintenance and replacement of rainwater objects, maintenance cleaning etc.
Responsive Maintenance Programme: The responsive maintenance is not acceptable in each and every situation. However, when it is employed, it is utilized to achieve minimum 90% of the specified time for the maintenance. It is generally applied for the less-critical works such as cleanliness and paintworks. The systems where the specific performances are essentially needed, the responsive maintenance is not that much needed (Wood, 2005). There is a strong and effective correlation between planned and responsive costs as with more planned maintenance, we need much lesser responsive backup.
The maintenance techniques utilized in SSE Hydro include certain key performance indicators that are effectively used to measure the performance level. These are:
- Planned corrective maintenance monitoring whose basic operating standard is to ensure that the number of breakdown and service disruptions should not exceed too much on a monthly basis.
- Planned preventive maintenance monitoring and it makes sure that there should not be too much lapse of services for more than two days in case of specified preventive maintenances.
- Maintenance customer service rating, also known to be responsiveness, ensures the achievement of minimum 80% produced from customer satisfaction surveys.
In corrective maintenance strategy, the components are operated until they fail and the manager, then, has to decide whether to repair or replace it. A lot of organizations and hence SSE Hydro consider this strategy as a reasonable maintenance strategy due to the fact that low cost is incurred. This technique is only suitable in stages where the asset is of significant importance for the company.
In any organization, cost-effectiveness is the main component as far as its finances are concerned. So, the projected costs made initially remain the focal point of the subsequent activities inside the organization. The building of maintenance costs consists the substantial proportion of financial resources. In case of SSE Hydro also, the Facilities Manager carefully considers and plans the maintenance cost and also needs to look out for any hidden cost during the evaluation. So, it takes an effective and efficient Facilities Manager who is well aware of the organization’s asset management policies as well as business objectives (Tsang, 2002). As the long term implications of the cost related activities in SSE Hydro such as construction could extend far beyond the initial design, so the cumulative costs and operating as well as maintaining the facility influences the overall budget of SSE Hydro. In order to improve the cost cost-effectiveness in construction and other renovation programs, SSE Hydro is investing in the area of designs and systems having a fairly improved performance for longer period.
Life Cycle Costing (LCC): LLC refers to the cost that is incurred right from the beginning of the processes, ongoing of the processes also the disposal of items that undergo replacement, testing and maintenance in the organization. In other words, LLC is used to analyze the costs of building, systems, components and materials. The Life Cycle Cost Analysis (LCCA) helps in guiding the project teams towards establishing the ‘first costs’ with respect to design and construction expenses as well as utilities, operations and maintenance.
Benchmarking of Maintenance Cost
The stages of feasibility and programming require the concerned Facility Manager to create the benchmark budget that have the details of designs and construction cost which is based on the previous data of earlier projects. In the meantime, the project team creates operation and maintenance benchmark with the help of historical data. Benchmarking is immensely helpful in identifying a standard plan in order to give structure to the place. It provides proper means to improvise techniques that are required for designing building and related components with a purpose of incurring lowest possible costs. It is also helpful in effectively evaluating the transactions, investments and production.
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Maintenance Outsourcing Strategy
In simple terms, outsourcing is the strategy incorporated by an organization or a business entity that involves their tasks and operations to be completed by another company either fully or partially. To consider outsourcing involves a strategic decision on the part of the concerned management that is obviously not an easy one to take. The purpose of outsourcing in SSE Hydro is to shift its 50 % of maintenance work that involves improving its security system, reducing operational cost, improving quality as well as better utilization of resources and production for over next ten years. The primary objective of any organization is to reduce the operating costs and attenuate unnecessary manpower activities with regards to lean operations (Levery, 1998). The asset maintenance of SSE Hydro that were to be outsourced, required expert maintenance engineers along with other skilled manpower. Since the company also utilizes environmental friendly procedures with a focus on sustainable development, the decision of transfer of maintenance operations could very well turn out to be crucial one for the organization. The issue that is concerning the Facility Management team is the high cost of in-house maintenance works, which is why, they have taken the decision of outsourcing a minimum 50% of the asset maintenance works so that there is a significant reduction in the overall asset maintenance budget.
The Facility Management department was advised to outsource up to the 50% of the maintenance operations for the duration of next ten years. The best outsourcing strategies are the ones that ensure maximum operational efficiency and reduce in-house cost. So, to carry out the proposed strategy, the management, first, had to divide the business activities SSE Hydro as core and non-core:
Type Facility Management Activities
The above table clearly differentiates the core and non-core activities of SSE Hydro. So, the non-core activities are then selected and outsourced with the help of different phases. This ensures the establishing of an efficient and effective maintenance cycle along with preventing any unforeseen traditional hiccups underway. A part of the present staff could be allowed to be crossover in the service providing company from the non-core activities that are to be outsourced (Linder, 2004). Different services are outsourced in different phases such as cleaning service goes first and the next in the list is based on the discretion of the Facility Manager.
Advantages of Outsourcing
The current market trends suggest that more and more organizations are outsourcing their non-core because of the increasing costs of labor and required materials. The process of outsourcing involves long-term planning to include the service providers responsible for giving effective and efficient services.
SSE Hydro has taken the decision of outsourcing by keeping in mind the following benefits:
- Outsourcing of asset maintenance works is going to help SSE Hydro to focus on its core activities of public events along with managing the resources in order to achieve the overall objectives of the company.
- There is no need on the part of SSE Hydro, to invest in plants and machineries that are required for maintaining building services like AHUs, pumps, generators and lifts etc. by transferring them to other players with a purpose of gaining more resources.
- The Facility Management team of SSE hydro is considering to avail the maintenance service in competitive costs through the process of tendering that helps in saving the cost and increasing the overall image.
- The service providers of SSE Hydro are selected on the basis of relevant experience which helps in better pricing for the replacement of any material by engaging in purchasing in bulk for reducing cost. It also involves utilizing the technology used in other organizations by leveraging so that it could be introduced in-house with minimal cost.
- SSE Hydro follows certain quality procedures to establish service standards through Service Level Agreement. The stakeholders can specify the response time and operational readiness of the services being provided with regards to the priorities in their discretion. The performance of the service providers is effectively measured through Key Performance Indicators (Kremic, Icmeli Tukel & Rom, 2006). The inclusion of liquidated damages allows the service providers to be alert all the time in order to meet the organization requirements.
- By outsourcing the maintenance contracts, SSE Hydro would be able to efficiently reduce the headcount in maintenance department. The plan of SSE Hydro is to retain minimum supervisory staff to oversee the asset maintenance.
The assets of an organization are of high vale potential for it. From the perspective of any organization, its assets are its infrastructure, employees, stocks available, health and safety of employed workers as well as its customers. The asset maintenance management allows the continuous improvement for the existence, reliability and performance by maintaining life cycle of physical assets like plant and equipment on permanent basis.
The structure of Hydro is essentially a concrete-framed bowl excellently designed external walls that strongly support an inclined 45 meter high saucer dome. The primary structure of the Hydro is built with a net of concrete fins that are radially splayed outwards from the center of the dome along its perimeter. These are responsible for bearing a significant load that stretch from 15 m to 33 m high with thickness variations of 40 cm to 60 cm. The roof is 1400 tones and 12m m in length of steel frame making it one of the largest free-spanning roof structure in the Europe. The ground floor of Hydro contains maximum floor area while the accommodation is concealed beneath the hovers. All of these features are extremely attractive for the audiences and serving their purpose well.
The asset maintenance policy of SSE Hydro aims at outsourcing some of the operations for the period of 10 years and the policies contain all the details regarding the infrastructure management, asset life cycle, various aspects of property such as paint, electrical installations, washrooms fittings as well as values of the assets in the long term. It is designed in a manner that sustains eco-friendly designs along with the waste management and recycling processes. As one of the main aims of any organization is to reduce the operating costs and so this resulted in the outsourcing of the asset maintenance.
Taking the considerations of the costs regarding the maintenance of assets and to influence lifecycle costing will improve the operations of SSE Hydro and proper utilization of resources and saving the cost. Applying an efficient maintenance schedule ensures the effective management of the assets and reduce any unforeseen breakdown in any organization. It will definitely increase customer satisfaction and add value to the SSE Hydro’s business.
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