FACILITY MANAGEMENT PRE-FINALS REVIEWER

The Internal Customer as End-user

External customers, on the other hand, represent outside parties or individuals who are not part of the organization but are
generally affected by company activities.
Basis for Comparison Internal Customers External Customers
Nature of impact Direct Indirect
They get influenced by the
Obligation They serve the organization. organization's work.
Employed by the entity Yes No
Company’s responsibility
towards Primary Secondary
them
List of internal customers:
 Employees. This group of people works for the company in exchange for remuneration or salary.
 Owners. This group of people owns the organization. They can be partners, shareholders, or sole owners
of the business entity.
 Board of Directors. This group of individuals governs the incorporated entity. They are elected by the
members of the corporation.
 Managers. These are the people who manage the entire department of a particular organization.
 Investors. These are individuals or group of people who invest their money in the organization.
 Operating units. These are different departments within an organization that transact with other
departments to accomplish their tasks relevant to business activities.

List of external customers:

 Suppliers. They provide inputs to the organization like raw materials, equipment, and office materials
among others.
 Clients. They directly purchase or patronize the products and services of an organization.
 Creditors. They can be an individual, bank, or financial institution who provides funds to the organization
in the form of a business loan.
 Intermediaries. They are the marketing channels that create a link between the company and customers
such as wholesalers, distributors, and retailers among others.
 Competitors. They are the rivals in the industry who compete with the organization for resources and
market share.
 Government. It controls the organization through regulations and duties levied on the business, such as
payment of taxes.
insourcing - involves a management decision to undertake organizational activities in-house or within their
internal scope of control.
Outsourcing, - on the other hand, refers to the practice of handing over the control of selected services in an
organization to consultancy firms or private enterprises.

Advantages of insourcing: (POSIBLE TRUE OR FALSE QUESTION)

 Competitive advantage. It allows an organization to build a unique value proposition to the market since
their strategies can be different from competing firms who decide to outsource the same kind of services.
 Trade secrets. These allow an organization to control the access to pertinent information like confidential
data and hidden methods or practices of the company to the general public.
 Organizational culture. It allows an organization to build uniform norms and standards by executing the
organizational activities in-house.
 Direction. It allows an organization to gain complete control over internal functions which they can measure,
improve, and innovate.

Disadvantages of insourcing: (POSIBLE TRUE OR FALSE QUESTION)

  Costs. These involve higher costs, particularly in some cases where labor costs in the home country are high.
 Capabilities. These require tedious hiring process, including personnel training and development since
insourcing requires more skills and abilities in managing business functions like accounting and information
technology.
The In-house Team - it is essential that members of the in-house team recognize that they should operate in the same way
as would an external service provider and that they will be judged on a similar basis.
POSIBLE ESSAY
 The in-house team should be considered in terms of its efficiency and cost-effectiveness.
 The constituent personnel must operate as a team if they are to deliver a value-adding service. In addition,
they must be proactive in looking for areas where value can be added
 It should not regard service levels as permanent, but as providing the basis for improvement. Its expertise
can help assess whether the perceived service levels are the most appropriate.
 Information and Communication Technology (ICT) could therefore be of help to the in-house team by
improving communication and producing appropriate management information.

THE OUTSOURCING DECISION

that outsourcing options should be based on the best possible information available to the organization at the time a decision
whether to insource or outsource must be made. If this information is sufficient for understanding needs, then later
comparison between options for service delivery can be made on an unbiased basis.

the following considerations in defining the baseline for service delivery: (POSIBLE ESSAY TYPE)

 Business objectives. The organization must align the delivery of its services based on its established targets
and goals. This is to ensure that the organization’s business objectives support the core functions of the
company.
 Drivers and constraints. The organization must identify the factors which control or hinder the current and
likely future business of the organization.
 Risks and opportunities. The organization must identify, assess, and regulate the factors or events which
create a negative or positive impact on the delivery of services.
 Stakeholders as end-users. The organization must engage with its stakeholders to define and detail their
needs through survey questionnaires, direct interviews, and other methods of data collection.
 Scope of services. The organization must determine the resources needed to support its business functions
along with the established range of its services.
 Sourcing policy. The organization must decide on the extent to which services are to be provided from within
the organization or procured from external service providers. Since internal and external conditions might
change, a review of the outsourcing decision in terms of satisfying current and future needs should be
undertaken.
 Offshoring. The organization must consider that overseas outsourcing or offshoring of services are generally
seen as ways of extracting cost savings from operations.
 Statutory requirements. The organization must adhere to governmental policies and other organizational
conditions where the facility is located or membered with, such as labor guidelines and quality standard
policies.
Attributes of Service Provision
the attributes of service provision are the criteria by which the various options for service delivery should be evaluated.
Criteria based on attributes of service provision that matter most to the organization and end-users help to focus on the
options or arrangement most likely to offer the best value solution that satisfies needs.
The following are the attributes of service provision, which organizations can consider:

 End-user service. The organization needs to establish the scope and standard of the services it requires.
Some of the measures which can be considered when dealing with external customers include adoption of
performance measures for courtesy, response, presentation, and tidiness.
 Priority. The organization must clearly express the primary services which need to be delivered.
  Costs. The organization must ascertain the direct expenses attributed to its services. In the case of an
outsourced service, the contract sum or value of the purchase order will signify its likely cost.
 Control. The organization must determine the extent of supervision desired or required for each service it
delivers. For many organizations considering outsourcing, a significant concern is perceived loss of control.
Options for Service Delivery
the organization should consider which option, or combination of options, for service delivery most closely matches its
identified needs.
The following are the options for service delivery: (POSIBLE ESSAY TYPE)
 Business unit. It involves the reconstitution of the in-house team into an independent company, to expand its
business by gaining contracts from other organizations.
 Managing agent. It involves the appointment of a specialist to act as the organization’s primary professional
advisor on facility management. This person or organization is then responsible for arranging the
appointment of service providers.
 Managing contractor. It involves the appointment of a single entity to manage individual service providers .
The contractor is paid a fee for providing this service, usually as a percentage of the value of the expenditure
managed.
 Managing budget. It involves the appointment of a contractor who takes responsibility for the payment of all
suppliers and provides a consolidated invoice at the end of each month.
 Total facility management. It involves a single organization in charge of providing services and general
management of the facility.
 Agency. It involves contracted employment of personnel through a manpower agency. Agencies provide
variable standards of selection expertise, personnel support and training, as well as customer support.

MAINTENANCE MANAGEMENT (POSIBLE ESSAY TYPE)

 The needs of stakeholders and the impact of those needs from the perspective of maintenance have to be
assessed and considered when preparing the strategy.
 In addition, the organization must prepare a communication plan to disseminate the strategy, policy, and
operation plans to key stakeholders.
 A well-defined maintenance strategy will support the organization’s business objectives, whereas a poorly
defined strategy, could have significant adverse safety, legal, and commercial consequences.
The Maintenance Policy
 a facility must be maintained to ensure that it fulfills its intended purpose and continues to function properly
throughout its life expectancy.
 Disregarding maintenance will risk failure of components and systems, which may result in needless
additional cost for the company.
 In addition, it causes an interruption to normal business operations which may threaten business continuity.
A reluctance to maintain a facility can arise from a belief that it is an enduring asset that deteriorates slowly.
 A policy should be developed to support the preparation of operational plans in line with the maintenance
strategy.
 The policy should outline the scope and actions to be taken to meet business objectives and how those relate
to goals defined in the facility management strategy with respect to maintenance.
Maintenance Planning
 maintenance plans should be driven by and support the intended outcomes in the maintenance strategy, as
well as being fully aligned with the business objectives.
 The maintenance plan must include requirements for operation demands and constraints, and feedback on
prior maintenance outcomes, and record of expenditure on previous maintenance initiatives.
The following summarizes the rationale for maintenance planning:
 Protecting the value of facility assets. It preserves the functions, capabilities, and durability of assets to
ensure that they serve their intended purposes within or even beyond its life expectancy.
 Strengthening the reliability of the facility. It drives down the cost of future maintenance, improves
 productivity, and reduces downtime which makes the facility functional at all times.
 Satisfying key stakeholder interests. It minimizes product overruns and ensures the safety of the people
operating the assets in the organization.
 Demonstrating practical sustainability. It allows continuous manner of production and undisrupted delivery
of products and services.
Maintenance Methods

Atkin and Brooks (2015) categorized that maintenance methods in three (3) broad groups as follows:

1. Planned Maintenance

 Planned preventive maintenance (PPM). It allows maintenance to be organized and carried out with
forethought and control, based on a predefined plan informed by the results of condition surveys and
inspections. It aims to avoid or mitigate the consequences of failure and minimize consequential costs.
 Shutdown maintenance. It is normally used for continuous production and requires a detailed plan for all
facility assets so that work can be carried out during a total shutdown.
2. Preventive Maintenance

 Condition-based maintenance. It utilizes the results of condition monitoring for building services,
engineering installations, structures, fabrics, and furnishings among others.
 Reliability centered maintenance (RCM). It is a systems-based method used to determine maintenance
required to ensure that a facility asset continues to function safely and correctly to fulfill its purpose, as
designed, in its current operating context. It enables a complete maintenance procedure which includes the
following: monitoring, assessing, predicting, and understanding the operation of facility assets.
 Total productive maintenance (TPM). It is a systematic approach in improving maintenance effectiveness,
which operates at a higher level than methods such as RCM. It normally builds on methods such as RCM and
involves the implementation of facility asset condition monitoring, based on the provision of an asset
register.
3. Unplanned Maintenance

 Corrective maintenance. It is introduced as the response to an observed or measured condition in building

services engineering installations and other elements, before or after a functional failure. It is used to resolve
the problem and ensure a return to correct functional performance.
 Breakdown maintenance. It relates to the task of restoring facility assets so that they can fulfill their original
function after failure has occurred. This method can result in high replacement costs over the life of facility
assets, although it has a low initial maintenance resource requirement.
 Emergency maintenance. It results from a sudden and unforeseen occurrence requiring immediate
corrective action to restore a facility asset to its function as quickly as possible and avoid potentially serious
consequences.