KNH 5073 Lecture Notes - Updated 21072016

International Islamic University Malaysia
Centre for Strategic Continuing Education and Training

(IIUM CRESCENT)
Certified Healthcare Facility Manager

HART 104
Facility Management and Maintenance
Revised For Use
KNH 5073
Operation and Maintenance Management
at
UNIMAS
Compiled by
Muhammad Ariffuddin Arifin
(14th July 2016)
Ariff Arifin | IIUM CRESCENT | 2016
FACILITY, OPERATION AND MAINTENANCE

MANAGEMENT
Facility plays a very important part in every industry. In order for each industry to
operate and realise its missions and goals, a good facility is needed. The diverse
environment of the industry has made each facility unique to each industry. For
instance, the manufacturing industry might posses a different type of facility
compared to the one that is used in the healthcare industry.
Facility Operations includes all the services required to ensure a facility will do
what it is designed to do. Facility operations typically includes the day to day
operations of the facility; and depending on the industry, each facility might operate
differently.
And like everything that operates, the facility needs to be maintained in order to
avoid any defect from occurring. Thus the second part of the learning is the Facility
Maintenance where it involves a scheduled maintenance, testing and inspection
of the facility to ensure that it is operating safely and efficiently, to maximize the
life of equipment and reduce the risk of failure.
Facility Operations and Maintenance falls under the science of Facility

Management where it encompasses all the broad spectrum of services to ensure
that the built environment performs all the functions required.
Facilities management is the integration of processes within an organisation to

maintain and develop the agreed services which support and improve the
effectiveness of its primary activities. Facilities management encompasses multi-
disciplinary activities within the built environment and the management of their
impact upon people and the workplace.
Effective facilities management, combining resources and activities, is vital to the

success of any organisation. At a corporate level, it contributes to the delivery of
strategic and operational objectives. On a day-to day level, effective facilities
management provides a safe and efficient working environment, which is essential
to the performance of any business – whatever its size and scope.
1
FM (from the perspective of operation and

People maintenance) is at the center of:
 Occupant needs
 Business and communication
processes
 Management and workflow technology
 Physical infrastructure
Technology
FM Place
Processes
Operations and maintenance usually addresses the day-to-day activities

necessary for the facility i.e. the building, its systems and equipment to perform
their designed purposes. Operations and maintenance are combined into the
common term O&M because a facility cannot operate at peak efficiency without
being maintained.
The daunting task of a Facility Manager lies in these several areas, where his
expertise is needed to interpret the needs and balance all the requirements:
1. Environment
Provide safe and healthy, and most importantly, a productive work
environment in compliance with all the codes and regulations
2. People
Hires, trains and manages O&M staffs and contractors and to consult with
departments across the organisations – interfacing skill
3. Costs
To ensure that the lowest possible failure and highest possible reliability
achieved – at the lowest overall cost
2
4. Planning
Develop operational planning requirements and anticipate any need for
adaptation
In order to apply a strategic facility plan and resulting to the best O&M plans, the
Facility Manager first needs to:
 Determine physical assets as an inventory
 Determine maintenance and repair cycle
 Determine maintenance schedule
 Determine applicable regulations, codes and standards
 Determine occupant services and requirements
The Facility Operations and Maintenance is mainly related to these areas:
1. Real Property Inventory (RPI) – Provides an overview on the type of

system needed to maintain an inventory of an organisation's assets and
manage those assets.
2. Computerized Maintenance Management Systems (CMMS) – Contains
descriptions of procedures and practices used to track the maintenance of
an organisation's assets and associated costs.
3. Computer Aided Facilities Management – is an approach in Facilities
Management that includes creation and utilization of Information
Technology or IT-based systems in FM practice. Latest: Building
Information Modelling (BIM).
4. O&M Manuals – it is now widely recognized that O&M represents the
greatest expense in owning and operating a facility over its life cycle. The
accuracy, relevancy, and timeliness of well-developed, user-friendly O&M
manuals cannot be overstated. Hence, it is becoming more common for
detailed, facility-specific O&M manuals to be required as a part of the total
commissioning process.
5. Janitorial/Cleaning – As the building is opened the keys are turned over
to the janitorial, custodial or housekeeping staff for interior "cleaning" and
maintenance. Using environmentally friendly cleaning products and
incorporating safer methods to clean buildings provides for better property
asset management and a healthier workplace. Grounds maintenance and
proper cleaning of exterior surfaces are also important to an effective overall
facility maintenance and cleaning program.
The scope of O&M includes the activities required to keep the entire built
environment as contained in the organisation's Real Property Inventory of facilities
and their supporting infrastructure to be used to meet their intended function during
their life cycle; which includes the utility systems, parking lots, roads, drainage
structures and condition of the grounds . These activities include both planned
preventive and predictive maintenance and corrective (repair) maintenance.
3
Preventive Maintenance consists of a series of time-based maintenance

requirements that provide a basis for planning, scheduling, and executing
scheduled maintenance. A good preventive maintenance would minimise the risk
of corrective maintenance. This includes adjusting, lubricating, cleaning, and
replacing components.
Predictive Maintenance attempts to detect the onset of a degradation mechanism

with the goal of correcting the degradation prior to significant deterioration in the
component or equipment. Corrective maintenance is a repair necessary to return
the equipment to properly functioning condition or service and may be either
planned or unplanned. Some equipment, at the end of its service life, may warrant
overhaul. The definition of overhaul is the restoration of an item to a completely
serviceable condition as prescribed by maintenance serviceability standards.
And as the number, variety, and complexity of facilities increase, the organisation
performing the O&M should adapt in size and complexity in order to ensure that
mission performance is sustained. In all cases O&M requires a knowledgeable,
skilled, and well trained management and technical staff and a well planned
maintenance program. The philosophy behind the development of a maintenance
program is often predicated on the O&M organisation's capabilities.
The goals of a comprehensive maintenance program include the following:

 Reduce capital repairs
 Reduce unscheduled shutdowns and repairs
 Extend equipment life, thereby extending facility life.
 Realise life-cycle cost savings
 Provide safe, functional systems and facilities that meet the design intent.
4
Operations
Administration Maintenance
Facility
O&M
Training Engineering
The O&M should contain five distinct functions: Operations, Maintenance,

Engineering, Training, and Administration (OMETA).
Some of the functions of OMETA are listed below (Meador, 1995):
1. Operations:
 Administration - to ensure effective implementation and control of
operation activities
 Conduct of Operations - to ensure efficient, safe, and reliable process
operations
 Plant Status Control - to be cognisant of status of plant systems and
equipment
 Operator Knowledge and Performance - to ensure that operator
knowledge and performance will support safe and reliable plant
operation
 Operations Procedures and Documentation - to provide appropriate
procedural direction that can be effectively used to support efficient,
safe, and reliable operation of the plant
5
2. Maintenance:
maintenance activities
 Work Control System - to control the performance of maintenance in an
efficient and safe manner such that economical, safe, and reliable plant
operation is optimized
 Plant Material Condition - to maintain the plant in a condition that
supports efficient and reliable operation
 Conduct of Maintenance - to conduct maintenance in a safe and efficient
manner
 Preventive Maintenance - to contribute to optimum performance and
reliability of plant systems and equipment
 Maintenance Procedures and Documentation - to provide directions
when appropriate for the performance of work and to ensure that
maintenance is performed safely and efficiently,
 Maintenance History - to support maintenance activities, adjust
maintenance programs, optimize equipment performance and improve
equipment reliability
 Maintenance Facilities and Equipment - to effectively support the
performance of maintenance by providing adequate facilities and
equipment
 Materials Management - to ensure that necessary parts and materials
meeting quality and design requirements are available when needed
 Maintenance Personnel Knowledge and Performance - to keep
maintenance personnel knowledge and performance at a level that
effectively supports efficient, safe, and reliable operation
3. Engineering Support:
 Engineering Support Organisation and Administration - to ensure
effective implementation and control of technical support
 Plant Modifications - to ensure proper design, review, control,
implementation, and documentation of plant design changes in a timely
manner
 Plant Performance Monitoring - to perform monitoring activities that
optimize plant reliability and efficiency
 Engineering Support Procedures and Documentation - to ensure that
engineer support procedures and documents provide appropriate
direction and that they support the efficiency and safe operations of the
plant
 Document Control - document control systems should provide accurate,
legible, and readily accessible information to support station
requirements
4. Training:
training activities
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General Employee Training - to ensure that plant personnel have a basic

understanding of their responsibilities and safe work practices and have
the knowledge and practical abilities necessary to operate the plant
safely and reliably
 Training Facilities and Equipment - the training facilities, equipment, and
materials effectively support training activities
 Operator Training - to develop and improve the knowledge and skills
necessary to perform assigned job functions
 Maintenance Training - to develop and improve the knowledge and skills
 Chemistry Training - to develop and improve the knowledge and skills
 Emergency Response Training - to develop and improve the knowledge
and skills of emergency response personnel to mitigate an emergency
5. Administration:
 Station Organisation and Administration - to establish and ensure
effective implementation of policies and the planning and control of
station activities,
 Management Objectives - to formulate and utilize formal management
objectives to improve station performance
 Management Assessment - to monitor and assess station activities to
improve all aspects of station performance
 Personnel Planning and Qualification - to ensure that station positions
are filled with highly qualified individuals
 Industrial Safety - to achieve a high degree of personnel and public
safety
What is “operation”? According to Merriam-Webster:
Simple definition – an activity of a business or organisation

Full definition – performance of a practical work or of something involving
the practical application of principles or processes
Operations Management refers to an area of management that concerned with

the administration of the business practices to create the highest level of efficiency
within the organisation. It revolves around converting materials and workforce into
goods and services efficiently in attempt to maximise the profit of that very
organisation.
Operations management is the management of processes that transform inputs into

goods and services that add value for the customer.
Operations management team deals with the task of balancing the cost with the
revenue in order to achieve the highest net operating profit possible.
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The goal of operations management is to maximize efficiency while producing

goods and services that effectively fulfil customer needs.
Operations management focuses on utilising the resources from labour, materials,

equipment and to a certain extent, the technology; where an operation manager
needs to acquire and develop goods and services based on the clients’ needs and
wants.
For instance, a team of operations manager in a furniture store is required to

produce decision on these aspects:
 Purchasing wood and fabric

 Hiring and training workers
 Location and layout of the furniture factory
 Purchase cutting tools and other fabrication equipment
A good operation decision will enable the organisation to maximise profit while
producing affordable and attractive goods for the customers.
Another example:
JetBlue airlines is a successful airline that has an organisation strategy of

providing high-value air transportation service to travelers. JetBlue strives to
provide fun, comfortable and safe air service to popular destinations at a price that
middle-income passengers can afford. Given JetBlue's organisation strategy, the
airline features an operations strategy that focuses on low costs, competent and
service-oriented employees, and reliable aircraft.
JetBlue locates ("location" is an operations decision area) its main transportation

hub in New York City, a city of 19 million people that helps ensure that JetBlue's
planes fly at full capacity. In the area of equipment decisions, JetBlue operates
only one type of aircraft, the Airbus 320, which has high passenger carrying
capacity (to maximize revenue), provides good fuel economy and requires only two
pilots (versus three) to operate. Having one type of aircraft reduces training costs
for pilots and mechanics, reduces investments in parts inventories, and enables
JetBlue to negotiate greater discounts on high-volume purchases from Airbus.
Operation is one of the three strategic functions of any organisation which mean
that it is a vital part of accomplishing the strategy and the long term survival.
8
Marketing
Operation Finance
Organisation
The other two areas are marketing and finance. The operations strategy need to
support the overall organisation strategy meaning that it requires a very detailed
planning.
Many decisions – and good decisions – in regards to operations must be made for
both long and short term impacts on the organisation’s ability to produce goods
and services to the customers. If the organisation has made mostly good operating
decisions in designing and executing its transformation system to meet the needs
of customers, its prospects for long-term survival are greatly enhanced.
The operations strategy should support the overall organisation strategy. Many
companies prepare a 5-year pro forma to assist in their operation planning. The
pro forma uses information from past and current financial statements in an effort
to predict future events such as sales, and capital investments.
Operations decisions include decisions that are strategic in nature, meaning that
they have long-term consequences and often involve a great deal of expense and
resource commitments.
Strategic operations decisions include the following:
 Facility location decisions

 The type of technologies that the organisation will use
 Determining how labour and equipment are organized
9
 How much long-term capacity the organisation will provide to meet

customer demand
Tactical operations decisions have short to medium term impact on the

organisation, often involve less commitment of resources, and can be changed
more easily than strategic decisions. The following are some tactical decisions:
 Workforce scheduling
 Establishing quality assurance procedures
 Contracting with vendors
 Managing inventory
•Workforce scheduling
Tactical •Establishing quality assurance
Decision procedures
(Short/Medium
Term) •Contracting with vendors
•Managing inventory
•Choosing facility location

•Type of technologies to be used
Strategic
Decision (Long •Organisation of labour and
Term) equipment
•Amount of long-term capacity
to meet customer's demand
Strategic and tactical operations decisions determine how well the organisation
can accomplish its goals. They also provide opportunities for the organisation to
achieve unique competitive advantages that attract and keep customers.
10
An example:
United Parcel Service (UPS), an international package delivery service, formed a

partnership with its customer, Toshiba computers. Toshiba needs to provide a
repair service to its laptop computer customers. The old approach of providing this
service was cumbersome and time-consuming:
1. UPS picked up the customer computers.

2. UPS delivered the computers to Toshiba.
3. Toshiba repaired the computers.
4. UPS picked up the repaired computers and delivered them back to the
customers.
Under this traditional approach, the total time to get a laptop computer repaired
was two weeks. They then came up with an innovative idea for Toshiba to provide
better service to its customers where UPS hired, trained, and certified its own
employees to repair Toshiba laptop computers. The new repair process is much
more efficient:
1. UPS picks up computers from Toshiba owners.

2. UPS repairs the computers.
3. UPS delivers the computers back to their owners.
The total time to get a computer repaired is now about two days.
So what are the examples of operations management in healthcare services?

Some of the most prominent examples of operations management in healthcare
include controlling costs, enhancing the level of service and improving the quality
of service provided to clients.
11
Healthcare is an extremely diverse industry. It primarily includes institutions and

practitioners that offer services for the diagnosis, treatment and prevention of
injury, illness, disease, and other physical and mental impairments.
There are a wide variety of specialties that focus on specific treatments. Healthcare
refers to primary, secondary and tertiary care, as well as to public health. Social
and economic conditions largely affect access to healthcare, as do the policies and
management of services. For a healthcare system to function efficiently, necessary
aspects include generous financing, a well-trained and well-paid workforce,
credible information on which policies can be structured, and health facilities that
are well-maintained and reliably managed.
Operations management is essential for the efficient functionality and provision of

health services. Because the healthcare sector is currently undergoing a
considerable amount of reform, the jobs of those who manage healthcare
operations are changing as well. One of the first areas of focus for operations
managers is controlling costs. The current healthcare system overuses
expensive, technological and emergency-based treatment. High costs from care
that remains uncompensated due to patients being uninsured. A prevalence of
services in expensive settings creates a burden on taxpayers, health insurance
holders and healthcare institutions themselves.
The goal for operations managers is to help strike a balance between necessary
high-tech treatment and community centres that offer preventative services.
Primary care institutions are also a part of keeping patients from needing
expensive emergency services. Cost control also affects the levels and quality of
services that are provided to clients. Inefficiently managed costs cut down on
budgets, limiting the technology and equipment that can be purchased and used
to provide necessary services. For operations managers, the goal is to streamline
costs and to create necessary funding to maintain adequate levels and quality of
services offered.
Operations management plays a vital role in the healthcare industry. It is

responsible for the oversight of healthcare facility operations, how efficiently they
function, and how capable they are of providing adequate and reliable treatment
to the community they serve.
The second part of the lesson is about the maintenance management. But what
is maintenance?
Maintain means:
1. to cause (something) to exist or continue without changing
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2. to keep (something) in good condition by making repairs, correcting

problems, etc.
Maintaining means the upkeep of property or equipment. The term maintenance

covers all activities undertaken to keep equipment in a particular condition, or to
return it to such condition.
Why maintaining and why maintenance management? Modern maintenance

management is not about repairing broken equipment rapidly; rather it is about
keeping the equipment running at the highest capacity while producing or providing
service at the lowest cost possible.
Tens of years ago, the machineries and equipment are relatively simple and
production works was done by the involvement of manpower, or labour.
Maintenance too was simple due to the nature of the machines. But during the
industrialisation era, the equipment have become more complicated and
developed; which has required the productivity rate to become higher and causing
machines to be used largely. It is the era where the work has moved from hands
of man to the machines.
This has caused maintenance to be a very important part of the organisation. And
by times, maintenance has become a major aspect. For example, in developing
countries where many old machines are operating, replacement/spare-parts would
be the problem; where it is very difficult to find them, and if they are available, the
cost would be very expensive.
Therefore, in order to reduce the need of the parts, a very detailed maintenance
management is needed, while keeping the productivity rate high.
Maintenance management is an essential part of life cycle cost (LCC) where the
maintenance aspect has to be taken into consideration in the earliest stage of work
to ensure a good and cheap operation. This includes the procurement of the new
equipment. High quality equipment will give a high reliability and maintainability
that can secure high productivity and equipment efficiency.
The lifetime of equipment can be categorised into six phases:
1. Idea
2. Specification
3. Design
4. Procurement
5. Operation
6. Windup
13
The early cost to buy a machine is high. During its lifetime, the cost would not be
that expensive, and the failure rate would be constant. However, during its wear
out term, the cost i.e the maintenance rate would become expensive.
Machines, spare-parts and all types of equipment have their own individual lifetime
which varies from part to part and is influenced by the quality of the product.
However other factors may also influence the individual lifetime such as
environment, handling etc. Some failures are occurring after a certain, expected
time and can almost be predicted.
14
Failures
Random
failures
• Non-predictable
Regular
failures
• Predictable
What is failure developing time (FDT)? Some failures are random or regular,
and some have longer or shorter failure development time. The failure
development time is the deterioration time from the moment condition departs from
the normal condition until the breakdown occurs.
Failures with failure development time (FDT) is easier to handle than the failures
without the FDT
Shorter FDT – continuous on-line condition monitoring has to be applied
Longer FDT – off-lone condition monitoring has to be applied
LCC is commonly known or understood to be the customer’s total cost and other
sacrifices throughout the actual lifetime of a product. Thus, LCC includes the
acquisition cost as well as future cost for operation and the support for the product
until it is finally discarded or abandoned.
The main objectives of LCC are:
1. To compare alternative products

2. Improvement of the products
3. Adaptation of the maintenance and support organisation
15
Why maintaining? Before this, maintenance function has been seen as a

necessary evil, where it is deemed as a cost generator in an organisation.
Frequently, the maintenance strategy has been about reducing the maintenance
cost as much as possible without forecasting the consequences. Objective of the
maintenance is to create an availability performance which is suitable for
production demands in the organisation – and this is priority number one. An
organisation will not produce with halted equipment and this would cost losses to
the business.
Besides that, the equipment, or the machine, must be working at the lowest cost
as possible within the safety prescription.
Availability performance – the ability of equipment to function properly despite

occurrence failures, disturbances and limitations in the maintenance resources.
Availability performance can be divided into three parts:
- Reliability performance
o The ability of an item, under stated condition of use, to perform a
required function under stated conditions for a stated period of time.
- Maintenance support performance
o The ability of a maintenance organisation, under stated condition, to
provide upon demand of the resources required to maintain an
equipment.
- Maintainability performance
o The ability of an equipment, under stated conditions of use, to be
retained or restored to state in which it can perform a required
function, when maintenance is performance under stated conditions
using stated procedures and resources.
There are two ways in managing the maintenance cost. The first would be cost
controlled maintenance, and second would be the result controlled maintenance.
Cost-controlled maintenance is a traditional form of maintenance management.

The reason why maintenance has been treated as a cost controlled activity is often
that the engineers and technicians had some dilemma to measure the result of
investments in maintenance in total economical terms. It is rather simpler to find a
direct cost for maintenance, but it could be very difficult to see the result.
The upper priority in the objectives of maintenance is to keep up planned

availability performance at the lowest cost possible; which means that the long
term results are important – result-controlled maintenance.
Among the hidden possibilities that can be caused by lacking of maintenance are:
16
 Capital costs
 Dangerous work environment
 Capacity losses
 Losing the market
 Production losses
 Quality losses
 Energy loses
 Increased investment
Costs
Direct maintenance costs
•The costs that are directly related to the performance of maintenance
works
•Salaries
•Material costs
•administration costs
•Training costs
•Parts
•Etc
Indirect maintenance costs

•Losses incurred due to the lacking of maintenance works
•Loss of revenue or other form of losses as a result of interruption to
production due to maintenance
The term maintenance consists of three main parts:
1. Corrective maintenance (CM)
17
2. Preventive maintenance (PM)

3. Improvement maintenance (IM)
CM • Corrective maintenance covers all

maintenance aspect which is carried out
in order to repair a faulty equipment
What is failure? Digress of demands of a certain quality. By right, if a machine is

not performing like it should, its quality is depreciated hence it cannot meet the
demand i.e. for it to work properly.
Corrective
Maintenance
Unplanned Planned
Emergency Impossible to Planned Prepared Possible to

Breakdown
repairs control maintenance properly control
You are You control

controlled by the
the equiment equipment
PM
• Preventive maintenance covers all
programmed maintenance which is carried
out in order to prevent the occurrences of
failures before it interrupt the production
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Condition Based
Maintenance
(CBM)
Indirect
Detection of
failures before
breakdown
Preventive
Maintenance
Fixed Time
Maintenance
(FTM)
Direct
Cleaning,
lubricating, fixed
time replacement
Subjective
• Using human senses
i.e. look, feel,
hearing etc.
Objective
• Using off-line
instruments
• Continuous on-line
monitoring
19
IM • Improvement maintenance is used when

the equipment need to be modified so
that the condition improves
Maintenance
Corrective Preventive
maintenance maintenance
Indirect condition
Unplanned Planned-controlled Direct monitoring
monitoring
- Decrease corrective
- Expensive - Reduce cost
maintenance
- Low availability - Increase avalability
- Increase avalability
Preventive maintenance may help in reducing numbers of breakdown and urgent

repairs. However it requires more planning and control of corrective maintenance.
But it will result to an increased availability performance as well as deficiency and
in the same time decrease the cost of maintenance.
How to get unplanned repair jobs planned? One of the objectives of

maintenance job is to get them planned. This would increase the availability
performance and lower direct maintenance costs as well other advantages. The
load on the maintenance department will for instance become lower and the quality
of jobs become higher.
The use of conditioning monitoring can help in observing failure development

and therefore it is possible to plan the forthcoming jobs before any breakdown
occurs. Planned maintenance will result to lower costs in maintenance and lessen
the down time.
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A proper planning will help in providing a correct maintenance work to be carried

out:
- At the right time

- In a right way
- By the right professional
- With the right replacement parts
Total productivity maintenance (TPM) is one way of organising maintenance to

support productivity and quality through increased equipment efficiency and to
reduce cost.
TPM concept means that all employees work in small groups to maximise the
improvement of equipment efficiency. Operators are working independently with
all maintenance activities of their own equipment and also have the total
responsibility of operation and maintenance.
The goals of TPM are:
 Increased productivity and quality

 Zero defects
 Reduced cost of maintenance and production
 Increased motivation among all employees
 Zero accident
 Shorter lead time
 Zero unplanned stops
 Development of staff through training
 Improvement of work environment
In carrying out the maintenance management, there are tools available and one of
them would be CMMS, or Computerised Maintenance Management System.
The CMMS program assists a maintenance department in organising the various

maintenance activities especially with respect to the Planning and Scheduling of
maintenance. It can also provide the organistion with the reporting of critical
information that helps drive better business decisions in the future.
A CMMS software package maintains a computer database of information about

an organisation’s maintenance operations, i.e. CMMIS – computerised
maintenance management information system. This information is intended to help
maintenance workers do their jobs more effectively.
21
CMMS packages can produce status reports and documents giving details or
summaries of maintenance activities. The more sophisticated the package, the
more analysis facilities are available.
Work order Asset management Safety
• Inspection • Record data about • Management of

• Details condition equipment and permits and other
of assets property including documentation
• Preventive maintenance required for the
maintenance activities, processing of safety
specifications, requirements. These
• Keeping track of
purchase date, safety requirements
preventive
expected lifetime, can include Lockout-
maintenance jobs,
warranty Tagout, confined
including step-by-
information, service space, foreign
step instructions or
contracts, service material exclusion
check-lists
history, spare parts (FME), electrical
• Machine breakdown etc. safety, and others.
• Incidence of
machine
breakdown, details
of repairs
completed and
repairs "to do".
Among the perks of using CMMS are:
 Reduction of mean downtime (MDT) – about 20%

 Increased machine life – about 20%
 Saving on labours and parts – 10-20%
 Savings on maintenance budget – 10-20%
22
Planning
Analysis Performance
Recording
Further reading:
Meador, R. J. (1995), “Maintaining the Solution to Operations and Maintenance

Efficiency Improvement", World Energy Engineering Congress, Atlanta.
Boundless. “Operations Management.” Boundless Business. Boundless, 26 May

2016. Retrieved 10 Jul. 2016 from
https://www.boundless.com/business/textbooks/boundless-business-
textbook/operations-management-10/introduction-to-operations-management-
69/operations-management-327-7790/
What are some examples of operations management in healthcare? Investopedia,

15 May 2016. Retrieved 10 Jul. 2016 from
http://www.investopedia.com/ask/answers/051515/what-are-some-examples-
operations-management-healthcare.asp#ixzz4E7P0R33Y
23
WARRANTY, SERVICE CONTRACT, INVENTORY,

PROCUREMENT AND ENERGY MANAGEMENT
WARRANTY MANAGEMENT
Warranty is a critical element of new product strategy. It not only provides

assurance to customers, but also serves as a very effective promotional tool. A
change in the approach to warranty management is needed so that warranty
related decisions are made in the context of the product life cycle and take into
account the interaction between warranty and other decision variables. This new
strategic approach is similar to that which has transformed supply chain
management over the last 10 to 15 years.
Warranty Management had been traditionally viewed by companies as a cost of

doing business. The costs of warranty management were found to be costing
between 4 to 5 percent of the total sales revenue of the company per annum and
were considered to be the cost of providing customer satisfaction and as an
opportunity to building customer relationship.
However over the last few years, many organisations have realised the underlying
value that can be achieved in this area. Today, Warranty Management is
considered to be a separate revenue stream. The process of Warranty
Management has evolved over a period. The benchmarking of best practices have
led to reduction in cost of service delivery of parts with increase in customer
satisfaction and an independent revenue stream of warranty services.
What is warranty? Warranty is a statement of assurance or undertaking issued

by the manufacturer of a product concerning the performance of the product and
parts supplied by him by way of sale transaction to the customer, for a certain
period as stated in the Warranty Card accompanying the product. In other words,
it is a performance guarantee for the product given by the manufacturer. In case
of any poor performance due to the malfunction or defect in any part of the product,
The contractually agreed warranty period commences when equipment is handed

over to the client and this is confirmed. In the case of a fault, the client has the legal
or contractual right to correction by the manufacturer/supplier. If there is a conflict,
the opinion of a neutral expert to estimate the extent of the fault and the damage
caused may be sought. Following the end of the warranty period, warranty claims
may be fulfilled at the discretion of the supplier. Warranty management coordinates
the entire process.
24
it will be made good by the supplier/manufacturer with either replacement of the

part or product or repair of the product.
The markets for all types of new products consumer durables, industrial or
commercial products – are characterised by the following:
 New products are appearing at an ever increasing pace making existing

products obsolete.
 Products are becoming more complex due to a significant increase in their
capabilities and/or performance relative to the products which are being
replaced.
 Customers are more demanding with regard to product performance and
support.
 Governments have passed stringent regulations to protect consumers
against products not meeting explicit or implicit performance standards.
 Markets are becoming more global and competitive.
Product warranty is a key element of post-sale product support. A warranty implies

that the manufacturer will either rectify and/or compensate the buyer should the
item purchased not perform satisfactorily over the warranty period. Warranties
increase costs to the manufacturer as a result of the servicing of claims during the
warranty period.
The average warranty cost varies from 1% to 10% of the sale price, depending on
the manufacturer and the product. For large businesses, this can run into billions
of dollars annually and has an impact on the bottom line of the business. American
manufacturers are spending an average of 1.7% of their product revenue on
warranty. The automotive sector accounts for just under half of all warranty claims,
while the telecommunication & IT sectors account for another third.
From the customer's point of view, the main role of a warranty is protective,
insuring against a loss due to a faulty or defective item that fails to perform
satisfactorily. The warranty assures the buyer that such an item will either be
repaired or replaced at no cost or at reduced cost or that a monetary compensation
will be provided (e.g. a money back guarantee).
A second role is informative. Customers find it difficult to assess product

performance, reliability and durability prior to the purchase. A product with a
relatively long warranty period conveys the message that it is a more reliable and
longer-lasting product than one with a shorter warranty period.
25
This is the warranty management from production point of view. What about
Facility Manager? What does a Facility Manager got to do with managing the
warranty?
A Facility Manager is responsible for the ongoing operational management of the

facility – in your case, the hospital. This includes the subsequent warranty
management of the equipment in the building which include furniture, machines,
departmental and workstation as well as other materials under your responsibility;
everything that requires a day-to-day management in order to reduce risk and
provide a healthy environment to the users.
Although you did not sell the equipment to place that you are managing, as a
Facility Manager, you are required to manage the equipment warranty programme;
which is part of facility maintenance processes. In fact, you are giving the warranty
to the client – the hospital – that you are responsible to claim the warranty from the
manufacturer in case of the defect and malfunction.
Apart from that, you are responsible in giving warranty to the whole facilities i.e.
the building that you are managing. The HVAC systems, elevators, even the
hinges of the doors in the building.
Warranties fall into two general categories: implied and express.
Implied warranties are created by state law and are neither spoken nor written
promises about the condition of a product when sold. Express warranties in most
cases explicitly define what the warranty covers and what the warranty excludes
from coverage. In many cases, an express warranty will also define the resolution
process should a claim be made.
The difference between express warranty and implied warranty is that implied
warranty does not offer any specifics about the goods. An express warranty can
exist if, for example, samples were provided during the submittal stage of a project,
in which case the seller is warranting that the product to be used in the roof is equal
in quality to that of the sample. Even language used in a project proposal can be
used to form the basis of an express warranty.
Facility Management may be considered a cost centre, but it also holds

tremendous potential to impact a company’s profitability. A dollar saved by a facility
management team goes directly to the bottom line; which is why cost savings is
the bottom line concern for facility management professionals.
26
What Facility Managers are doing:
 Avoiding unnecessary repair costs through client self-help systems and

knowledge bases
 Flagging all assets and equipment under warranty to prevent unnecessary
payment
 Establishing and monitoring not-to-exceed pricing agreements with vendors
Among the biggest mistakes managers make that can cause problems with a
warranty involves making repairs improperly. But warranties also can present a
host of other potential pitfalls. There are a lot of clauses in the warranty that can
void the warranty. Manufacturers often are looking for any reason to find a warranty
invalid.
What Facility Managers should do:
1. Get the warranty early, and read it.

2. Understand the warranty’s language describing the claim-resolution
process.
3. Finally, look beyond the number of years the warranty covers.
SERVICE CONTRACT MANAGEMENT
What is a service contract? It is an agreement whereby a contractor supplies time,

effort, and/or expertise instead of a good (tangible product).
It is a form of extended warranty, a prolonged warranty offered to consumers in

addition to the standard warranty on new items. The extended warranty may be
offered by the warranty administrator, the retailer or the manufacturer. Extended
warranties cost extra and for a percentage of the item's retail price. Occasionally,
some extended warranties that are purchased for multiple years state in writing
that during the first year, the consumer must still deal with the manufacturer in the
occurrence of malfunction. Thus, what is often promoted as a five-year extended
guarantee, for example, is actually only a four-year guarantee.
It may have terms and conditions which may not match the original terms and
conditions. For example, these may not cover anything other than mechanical
failure from normal usage. Exclusions may include commercial use, "acts of God",
owner abuse, and malicious destruction.
In any facilities management operation, the effective delivery of service contracts

will be a priority. Where multiple services are provided, most large organisations
27
(both public and private sector) will have a professional facilities management
department in place to co-ordinate and manage the contracts. This will be
particularly important where multiple services are provided by specialist service
providers. The importance of the intelligent client unit cannot be stressed too
strongly in delivering value for money facilities management services.
Where services are provided in house, service level agreements (SLAs) are likely
to be in place between the facilities departments and the organisations' various
divisions. It is recommended that the management of these SLAs is treated as if
they were for external service provision contracts.
An SLA is the set of criteria by which the performance of a contract will be

evaluated in order that client expectations are properly managed.
Effective contract management processes ensure that all parties to the contract
fully meet their obligations as efficiently and effectively as possible, to satisfy the
business and operational objectives needed from the contract, and particularly to
provide value for money, while at the same time ensuring that the host organisation
is at all times compliant in both statutory and contractual terms.
Contract management plan: As part of the contract mobilisation process, it is

advisable to develop a contract management plan, outlining the key issues within
the contract, including deliverables through SLAs and KPIs. This plan should detail
service delivery methodologies. In addition, the mobilisation process will establish
systems and processes, including those for review, and will set up the supply chain
required for service delivery. The mobilisation process will establish the platform
for contract operation.
It is the responsibility of the Facilites Manager to maintain an absolute knowledge

of all contracts, their terms and conditions and, together with the host organisation
or client, ensure that those terms and conditions are appropriate as the contract
progresses and as the business needs of the client change over time.
To ensure that best practice is adhered to at all times, such contracts need to be
regularly reviewed.
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CLIENT RELATIONSHIP MANAGEMENT
One of the most important roles Facilities Managers can undertake is to ensure
that good and effective client relationship management is maintained and that the
expectations of the client are identified at an early stage in the contract and
managed accordingly. In delivering the contract, it is recommended that Facilites
Managers ensure, through formal reporting frameworks and informal relationships
that all stakeholders are, at all times, fully informed and have ownership of all
decisions and actions taken. All too often contracts fail, not because of
underperformance but because of a breakdown in communication and key
relationships.
The very nature of facilities management operations dictates that rarely is service
delivery at 100 per cent because of influences that are outside the direct control of
the Facilites Manager, such as, for instance, adverse weather conditions. An
appropriate organisational/client relationship will ensure that issues are addressed
early with a minimum of disruption and impact on the contract outputs
Facilites Managers should also look to best practice supply chain management
principles in this regard.
INVENTORY MANAGEMENT
Reference and further reading: Mike Cowley, 2006. Retrieved from

http://www.facilitiesnet.com/software/article/Inventory-Management-Whats-in-
Your-Storeroom-Facility-Management-Software-Feature--5207
As a Facility Manager, do you know what is in your store room?
Ample spare-parts, rapid purchase-order processing, critical spare-part

determination, standardization of suppliers, high-quality parts, consignment of
high-use items, and rapid check out of parts. These are among the most common
demands maintenance and engineering managers make on their departments.
They know that to help create a high-performance maintenance organistion or

world-class maintenance team, technicians must have the parts and supplies to
carry out tasks. But throughout their careers, most managers have been unable to
dedicate the time and energy needed to maximize the operation of supply rooms
and stores.
29
Few departments have had the opportunity to fully stock all repair parts and stores
needed for their operations. Many dream of having this responsibility, but few have
had the opportunity to manage and maximize parts and supply storerooms.
Even in organistions that give managers this responsibility, quite often they have
been unable to put the required effort and energy into understanding the way the
process should function, then to developing management tools and techniques to
maximize performance.
Obviously, having such authority lets managers adjust programs faster and more
easily. But in either case, maximizing a department’s performance means taking
the time to properly manage parts and supplies by measuring supply-room
performance and adjusting for continuous improvement.
To get started down the right path, managers need to return to the fundamentals
learned through training or experience. If planning and scheduling is critical to the
success of a world-class maintenance organistion, and if having the proper parts
and supplies is critical to carrying out the maintenance plan and schedule, then
having a world-class maintenance organistion requires a well-managed inventory
and procurement program.
What happens if an inventory management system operates poorly? The first

consequence is increased equipment downtime. When the proper parts and
supplies are not available from the supply room if technicians need them — or
when the emergency purchase of parts and supplies is slow and cumbersome —
downtime increases.
The ultimate goal is to have commonly used parts in house most of the time. But
when an emergency order is required, the order must be processed easily and
quickly. In some cases, the wrong part is stocked. This situation arises from not
having proper asset information or from a purchase-order system that does not
properly order and receive the part into inventory.
The second consequence of a poorly operated inventory and procurement

program is lower maintenance efficiency. One primary function of managing a
maintenance organistion is improving technician efficiency. A critical step in
achieving this goal is having the right parts or supplies available for technicians
who must make unplanned trips to the supply room.
This point is especially important as the maintenance planner plans and schedules
maintenance work. When planners are preparing work orders for technicians’ work
schedules, their job will be faster, simpler and more complete if they can rely on
30
parts availability from the supply room, rather than having to work with the
purchase order or procurement side of the business.
The third consequence is poor component quality. When systems are not in place
to ensure the right parts are ordered and stocked, problems occur because
technicians check out parts for repairs for which the parts are not intended. This
situation will cause additional lost time while technicians attempt to adjust or
modify. It also will lead to a shorter-than-optimal life for the part, which in time might
fail and cause more downtime, increased parts use, and higher labour costs.
The fourth problem that becomes apparent with a poorly operated supply and
inventory system is the increase in parts that are obsolete, identified incorrectly,
poorly designed and built, incorrectly labelled, or stocked in multiple locations
without cross-referencing. All of these situations drive up the total cost of the parts
used because technicians give up searching and, instead, buy a new part. This
action ties up valuable capital and increases operating costs.
The last major concern involves changes in employee attitudes. Technicians soon
will develop the mindset that the supply room isn’t useful and that travelling there
for parts is a waste of time. This outlook leads to unneeded emergency orders,
higher overnight shipping costs, lower efficiency, and increased downtime.
Increased Lower
Poor component
equipment maintenance
quality
downtime efficiency
Increase in parts
Changes in
that are obsolete,
employee
incorrect labelling
attitudes
etc.
How to get past this? CMMS is one critical foundation of a well-operated

maintenance program. Therefore, the first task involves ensuring the organistion’s
CMMS can assist with this effort. It is important to have a well-installed system that
is completely populated with asset and component data and that is managed and
maintained with discipline.
31
Most CMMS offer an inventory-management module. Having an integrated CMMS

with work-order management and inventory and procurement components
provides a considerable advantage to the management team, primarily the
maintenance planner. And having repair parts and supply information available to
management and the planner from in-house stores, as well as from outside
purchase orders, will streamline the process and add considerable value.
The managers then need to identify the critical equipment operations, utilities and
processes to determine which repair parts to stock. Managers should thoroughly
review each piece of equipment and process to determine if the needed critical
repair parts should be included in inventory.
As a manager, you need to consider the lead time for parts arriving from a
manufacturer or supply house, the cost of downtime while waiting for the parts to
arrive, and the cost to keep the part in inventory. Remember that the main role of
you as a Facility Manager is to keep the facility running at lowest cost possible.
The next task is to review each item in inventory and answer the following
questions:
 Is the piece of equipment for which it was purchased still in use?

 Is it the proper part for that piece of equipment?
 Is it critical to the operation of that piece of equipment?
 Is the right quantity in stock?
 Can technicians use or cross-reference this part for any other piece of
equipment?
Once managers have answered these questions, they can logically decide whether
to purge and scrap the part or modify the quantities in stock.
The process of identifying critical spares and the process of reviewing each stock
item for usefulness is an ongoing process. Managers must continue to revisit it
regularly to prevent the spare-parts inventory from becoming obsolete.
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PROCUREMENT MANAGEMENT
Procurement management is one such form of management, where goods and

services are acquired from a different organisation or firm. All organisations deal
with this form of management at some point in the life of their businesses.
Procurement Management is a key factor to running a successful company

because it helps you meet business goals and live up to stakeholders’
expectations. it is the systematic approach used for buying all the goods and
services needed for a company to stay sustainable. Manage your procurement
well, and it will add value to all your business practices and save you both time
and money.
Identification of need – When the company needs goods/services, the company’s

needs must be identified in order to choose which type of service or product will fit
best. Then the buyer needs to find them at the best quality for the best price while
also making sure the supplier is able to deliver.
Finding and qualifying the suppliers – Using the Internet or your supplier
databases, you assemble a list of all potential product and/or service providers.
Sometimes it’s useful to run RFIs or gather additional information, like years on the
market and turnover rates, to pre-qualify suppliers.
Requesting proposals – To make sure you buy the products or services under the
best conditions – price, quality, etc. – you request proposals. Based on the results,
you know with whom to start negotiations. The RFP results can be considered an
overview of current market capability.
Negotiating with suppliers – To achieve the best conditions regarding prices, terms
and delivery, you negotiate with suppliers. It’s especially essential if it’s the first
time you are working with them. This process can help you evaluate their
trustworthiness as well.
Contracting – If both parties, the buyer and the supplier, agree on all terms (pricing,
delivery, quality, etc.) you can make it official by signing a contract.
Delivery – Throughout the delivery process, you need to evaluate the products
and services delivered to ensure they are what you had planned to buy, they meet
your quality standards, they arrive on schedule and you are charged the prices
outlined in the contract.
Analyzing results – Once the project is complete, it is essential to analyze the

process and evaluate its success as well as record observations for future projects.
You may need to present the outcomes to company management or relevant
33
stakeholders. The results can be used the next time you need to make a similar
purchase.
To keep the procurement processes transparent for buyers, suppliers and

stakeholders, it’s essential for the executives (procurement managers) to have a
full overview of the process. This ensures accountability, helps improve
procurement processes and allows them to coordinate the team’s workload.
You need a clear chain of command in order to achieve accountability and define
measurable objectives for the team. Then you should consistently and
transparently follow up on those objectives.
Keep all involved parties well informed about the processes, including
benchmarking and reporting. This means they should be clearly visible and not
done behind someone’s back.
 Supervising procurement – Make sure all the processes are run according
to the procurement policy and best practices for eliminating the risk of fraud
and maverick spend. All involved parties should be well aware of the
processes being supervised.
 Analyzing processes – To improve your activities, periodically analyze your
ongoing procurement activities, like RFP processes, spend across different
categories, low value- vs. high-value requests, team performance, etc. You
should have all this information on one central procurement dashboard.
 Benchmarking and KPIs – Measure your success by consistently
monitoring the performance of KPIs and set up a benchmarking process.
These are the metrics that reveal the success of procurement management.
 Reporting – The procurement manager reports at set intervals to company
management, to other stakeholders and to the procurement team. By
keeping the process transparent, you can make sure all involved parties are
on the same page.
 Ongoing procurement improvement – To deliver top performance, refine our
procurement processes when necessary, but also understand that this is an
ongoing task. For example, some improvements may require rewriting the
policy, others may require better coordination of team resources.
34
ENERGY MANAGEMENT
One of the roles of the Facility Manager is as a key factor in organisational energy
management. A Facility Manager has the considerable impact on workplace
energy consumption; whilst having number of factors that constrain their agency
and capacity to act. These include demands to meet workforce expectations of
comfort; a lack of support from senior management; and a shortage of resources.
The FM's role can only be understood with reference to their middle management
position, which outside the energy literature has a long history as a subject of
research. From this position the FM can potentially apply influence downwards to
building occupants, upwards to senior managers, and sideways through external
organisations, such as professional trade bodies, and specialist contractors.
The energy management decision process:
1. The key to energy efficiency is management – it doesn’t matter how much

you spend on technology, without management you will waste money. The
first maxim of energy management is that you can’t manage what you don’t
measure, thus establishing a baseline of energy use should be your top
priority as a facilities manager. Get the bills out and check consumption –
keep a record of it. If in doubt check the meters, and consider how
operational changes and external factors such as the weather have affected
energy consumption.
2. After a baseline has been established, you should then tackle the ‘no cost’
then ‘low cost’ measures suggested in this guide. A no-cost measure is one
that is free to implement (although it may take an hour or so of your time),
and low cost measures are ones that will pay for themselves within six
months. No cost measures are applicable to both leased and owned
buildings as they do not involve changing the building’s services.
35
3. Once these have been completed, the ‘medium cost’ measures suggested
should be considered. These measures should pay for themselves in less
than two years. If you are the manager for a leased building, these should
be discussed with your landlord using a cost-benefit argument. Lease
renewal negotiations are an ideal time to request energy efficiency changes,
as landlords may prefer a small capital spend to keep a tenant rather than
risk an empty building.
4. It may be that immediate implementation of an action, is not appropriate but
when any major change is planned for the building portfolio the decision
making process should be repeated, to see if any measures which were not
previously possible could be implemented during the refurbishment /
relocation.
5. Throughout this process energy use should be monitored and energy
savings reported to enhance the business case for future energy efficiency
plans. Meter readings or bills should be compared on at least a quarterly
basis with data from the previous year to see if unit consumption has fallen.
Set up a simple spreadsheet to track monthly consumption and record
savings.
This section presents the top ten actions to carry out to reduce the energy costs
and carbon emissions of your facility. The actions are based on a review of the
international literature on energy efficiency and draw upon experience from a
number of sectors and best practice case studies. The information sheets on the
top ten actions can be printed out and put up on the notice board, presented to
your landlord or used in office briefings. No cost – Establish current energy usage
and check bills to make sure you are on the right tariff
1. No cost – Incorporate energy efficiency into maintenance activities

2. Low cost – Exclude draughts
3. Low cost – Increase the energy efficiency of water heating systems
4. No cost / Low cost – Improve the efficiency of air conditioning / ventilation
systems
5. Low cost – Improve the efficiency of lighting systems
6. Low cost - Install or top up loft / roof space insulation
7. Medium cost – Insulate walls
8. Low cost – Increase the efficiency of space heating systems
9. Medium cost – double or triple glaze all windows
36
FACILITY MAINTENANCE CHALLENGES AND FACILITY

ASSESSMENT
In 2010, Corrigo Inc, a company that specialises in work order and time tracking
solutions, has carried out a survey on over 1200 organisation to find out the Top 5
Facilities Management Challenges.
#5 Allocating work to the right vendor
#4 Making changes without having enough reliable data
#3 Getting more work done with fever resources
#2 Finding ways to extend the life of existing assets
#1 Saving money
#5 Vendor management
- Improved vendor management increases the control you have over your
operations, and by implementing price controls, can reduce your costs.
- What facility managers are doing:
o Making vendor decisions based on accumulated performance
feedback
o Recording and comparing information on vendor pricing
o Maintaining searchable records of vendor certifications
- Conclusion for Challenge #5: There are a lot of details to address when
considering vendors and the real cost of using outside vendors as well as
staff resources and be vigilant about the insurance. (Cool, 2015)
37
#4 Operational visibility
- Capturing and then making use of the information associated with all your
service and maintenance work equips you to make informed and effective
business decisions.
-
o Comparing spending trends across their organisation to target areas
of waste
o Using historical repair data to inform new equipment and warranty
purchase decisions
o Monitoring real time progress on important repair work
- Conclusion for challenge #4: Historical and real-time data is critical for our
ministry facilities. Develop or buy a system that can track this kind of data,
or partner with someone that can do this for you. An Excel spreadsheet will
most likely not work unless you have a very small facility. (Cool, 2015)
#3 Workload management
- Doing more with fewer resources is not a temporary situation in a

competitive market; you’ll always have pressure to keep operational costs
as low as possible. To succeed in this environment, you need tools that
extend your reach and productivity.
o Moving away from ad hoc communications by phone, fax and email
o Sharing a common platform with their clients and vendors to process
work requests electronically
o Automating vendor job routing via intelligent systems
- Conclusion for Challenge #3: Develop, buy or subscribe to a system that
allows you to communicate with your vendors (not as the only form of
communication) and tracks their ETA, pricing, PM work and other work
order management. (Cool, 2015)
#2 Asset Management
- Spending the right amount on preventative maintenance and being able to

back up that decision with accurate data can turn a facility manager in to a
cost saving hero.
- What facility managers are doing
o Comparing preventative vs. repair costs on all asset types and
adjusting PM spending accordingly
38
o Using accumulated repair data to implement intelligent, predictive

maintenance schedules
o Applying proactive maintenance on mission critical equipment
- Conclusion for Challenge #2: Preventive Maintenance, rather than
corrective repairs, is a far better approach to caring for the resources God
has entrusted to us. (Cool, 2015)
#1 Cost savings
- Facility Management may be considered a cost center, but it is also holds

tremendous potential to impact a company’s profitability. A dollar saved by
a facility management team goes directly to the bottom line. This is why cost
savings is the bottom line concern for facility management professionals.
- What facility managers are doing
o Avoiding unnecessary repair costs through client self-help systems
and knowledgebase
o Flagging all assets and equipment under warranty to prevent
unnecessary payment
o Establishing and monitoring not-to-exceed pricing agreements with
vendors
- Conclusion for Challenge #1: I believe that in today’s economy we are
looking for ways to save money. Sometimes we cannot see the obvious
items that will allow us to be more efficient and effective. The principles
addressed in this article are right in front of us. (Cool, 2015)
Allocating work to the right

• Vendor management
vendor
Making changes without

• Operational visibility
having enough reliable data
Getting more work done

• Workload management
with fever resources
Finding ways to extend the

• Asset management
life of existing assets
Saving money • Cost saving
39
FACILITY ASSESSMENT
Recent growth in the healthcare industry, along with technological advances,

legislative reforms, and economic conditions, have led many hospital
administrators to consider renovating their existing facilities rather than building
new ones to address their changing facility needs. Clearly, it’s time to do more with
less.
And if you’d be even a little tempted to make this response to a pointed question
about your facility’s infrastructure, you might want to consider conducting a facility
assessment.
It’s easy to resist the planning needed to justify spending new money when our
budgets seem to have scurried somewhere between a rock and a hard place and
current projects are all due yesterday. But without an adequate assessment to
develop knowledge about the affected equipment and systems, a planned project’s
budget, schedule, and occupancy date can be put at significant risk. The loss of
revenue when an occupancy delay is caused by the need to fix a problem that
could have been fixed during design and construction will likely far exceed the cost
of an initial facility assessment.
“Due diligence” is a term more commonly associated with professions like banking,
real estate, and the law. It is a process used to reveal and evaluate debts, property,
legal ramifications, etc., in order to provide an overall baseline of information to the
involved parties. This same kind of effort is appropriate for healthcare, where it can
be described as a discovery process used in planning renovations to existing
buildings and infrastructure to ensure that building systems will perform in
accordance with the owner’s present and future requirements.
In the healthcare industry, the more common term for due diligence is “facility
assessment.” Typically, a facility assessment provides data gathered by a team of
experts (architects, engineers, and others) from existing records, plant staff
interviews, on-site surveys, and the extensive facility experience of team members.
The assessment team investigates the condition of the facility and its infrastructure
systems and sorts out what is new or old, good or bad, broken, expiring, renewed,
missing, or deficient with respect to building code or regulatory requirements.
Why perform a facility assessment? Because an assessment can establish an

agreed-upon framework for informed and objective decision-making. For facility
administrators and their governing boards, the assessment is a useful tool that
provides authoritative and defendable data they can use to enhance development
efforts, achieve committee or board buy-in, obtain grant funding, and more,
depending on the type of organisation. A facility assessment can provide
40
descriptions and projected costs for the repair, overhaul, or replacement of

facilities and equipment needed to support renovation or new construction
projects. Further, however, the experts on a healthcare facility assessment team
provide objective insight that can help an organisation meet its business
imperatives and strategic objectives.
The facility assessment process outlined below is based on knowledge of the effort
and results from many actual healthcare facility assessments. The intent is to
present an approach to facility assessment that supports prudent facility planning
and careful capital expenditure decision-making.
Some specific benefits of a well-executed facility assessment are listed here:
 Support for strategic planning efforts

 Support for facility master planning
 A basis for developing and managing an infrastructure planning budget
 Help defining projects, budgets, and schedules that meet available funding
 Facilitation of communication and record-keeping among facility
administrators, design and construction teams, and plant managers
 Response to code and guideline requirements
 Preservation of institutional memory
There are four parts in carrying out the facility assessment.
Part 1: Planning the Assessment
1. Define the purpose and scope of the assessment. Are you looking for a
condition assessment, a facility inventory, a facility performance evaluation,
or a combination of all three?
2. Define the team. Who from the owner’s side will participate and be the main
contact point for the team? What kinds of expertise, experience, and
knowledge need to be represented on the team? Consider that the team
might need help from third-party personnel for testing and/or verification of
existing system performance and equipment status and for addressing
special pricing issues.
3. Define the report formats. Once the purposes for the information to be
gathered have been decided, report formats must be developed to ensure
the collected data is suited to its expected use.
Part 2: Implementation
41
Pre–inspection phase
To get an accurate picture of building conditions before a facility is actually

inspected; the assessment team can gather information in several ways:
1. Conduct interviews. A condition assessment is not just technical; it’s also

political to a degree. Few people understand a building’s deficiencies and
its needs for improvement as well as the facility’s stakeholders: key
administrators, managers, staff, maintenance personnel, and others.
Involvement of these stakeholders and any relevant external sources is an
essential element in conducting an assessment that results in successful
program implementation.
2. Research existing documentation. This step often saves time; it includes
review of existing drawings, construction records, maintenance records,
equipment records, TAB (testing, adjusting, and balancing) and
commissioning reports, and other assessments. (Keep in mind that the
quality of existing documentation depends on the quality of the original
design, installation, and TAB/commissioning efforts as well as the
quality of any follow-up efforts conducted to verify and maintain the original
level of operation.)
3. Solicit information via questionnaire. Questionnaires sent to stakeholders
who have access to the buildings often elicit different perspectives on
building use. Information gathered from questionnaires cannot define
problems, but it can indicate where problems exist.
Facility inspection phase
1. Conduct inspections. Some typical parameters that guide team members’

investigations are deterioration of system performance and equipment;
code and guideline compliance; safety, security, health, and sanitation
measures; excessive energy usage and cost-effective energy retrofit
opportunities; aesthetic problems; and structural integrity. Collaboration
between in-house staff and consultants is often the most effective way to
collect information. In-house staff have an advantage because they know
the facilities and the users; they can take measurements and help distribute,
collect, and tally questionnaires. Outside assessment consultants bring
third-party impartiality to the task as well as experience in doing other such
assessments.
2. Assign priorities to deficiencies found. A priority sets an agreed-upon
urgency, determining which projects will be done and which will be deferred
when the budget is limited.
42
High-priority deficiencies typically include:

 Those required to correct life safety or code violations or that create
potential liability problem.
 Those that will cause increased expenditures if not fixed soon (e.g.,
a roof leak that will cause further damage if not repaired)
 Those that might cause a system or piece of equipment to fail,
shutting down a facility or process
Medium-priority deficiencies typically include:

 Those that, if not corrected, would soon become high priority
 Those that, if corrected, would save money (e.g., energy retrofit and
HVAC commissioning)
Low-priority deficiencies typically include:

 Those that, if not corrected, would not be life-threatening or
expensive to maintain
 Those that, if corrected, would improve the aesthetics of buildings
and grounds
Part 3: Analysis
Once the assessment team has collected all of the basic data, the next steps
require the team to:
1. Analyze each deficiency. Assign a price to each deficiency and categorize

it as a correction, an addition, or an improvement.
2. Assess whether more effort is required. Determine if more in-depth testing
or system/component evaluation is required, including involvement of
outside specialists.
3. Prepare final report. Make a final evaluation of deficiencies according to
degree and urgency of need, cost, practicality, and likely stakeholder
acceptance, and compile a report in the originally agreed-upon format.
(Keep in mind that system requirements are often subject to changing
codes. Many existing conditions “grandfathered in” by old codes are allowed
to remain as-is only until renovation or replacement occurs. Thus, a
renovation or replacement project can have a significant ripple effect
throughout a system and facility.)
43
Part 4: Execution
After the necessary information has been collected, reviewed, and compiled in an
agreed-upon report format, the facility staff responds to the data presented,
typically in conjunction with the entire assessment team. Next steps include these:
1. Prepare a correction plan. The facility assessment effort yields a database

of information that provides a framework for short- and long-term goals.
Once data has been gathered and analyzed, the assessment team can help
package, sequence, and schedule identified projects. This is where the
experience of the assessment team helps inform the work of staff planners.
2. Develop design and construction strategies. An assessment report should
help a client package the assessment findings into design and construction
contracts. For example, based on their shared type, multiple projects in
multiple buildings across a facility might be contracted for together. Or,
based on their shared location, all the work in a single building might be
grouped in a contract.
3. Staff and manage execution. With the work defined, the assessment team
can help staff develop a management plan for its execution. This would
encompass everything from fund-raising for some larger projects through
construction and occupancy for all projects.
Planning the assessment
Implementation
•Pre-inspection phase
•Facility inspection phase
Analysis
Execution
To ensure the success of the facility assessment, this steps need to be taken:
44
 Identify the purpose of the assessment. The owner should start the
facility assessment process with a clearly articulated objective for why the
assessment is needed and how the organisation will use the information it
provides. The “whys” and “hows” of the assessment (e.g., maintenance,
budgeting, expansion, renovation) will likely shape its scope and determine
the nature of the investigations to be made.
 Select an experienced team. The owner should select a team with good
healthcare and facility assessment experience and enable them to staff the
project with knowledgeable people.
 Foster open communication. An open dialogue should be maintained
between the assessment team and designated facility personnel to ensure
that questions that come up as members of the assessment team are seen
working throughout the facility are responded to.
45
HOSPITAL ENGINEERING SERVICES

Hospital Engineering Services is a very important component to the Healthcare
Facility Management which with its absence, the hospital may not properly
function. The efficiency of the patient care delivery system depends on the HES
efficiency.
The slightest breakdown may induce catastrophic effects to the whole healthcare
function.
Among the functions of Hospital Engineering Services are:
1. Planning and implementation of a program of planned preventive

maintenance.
2. Ensuring that all the facilities, systems and services under its scope are well
maintained and kept in a state of optimum operational efficiency.
3. Maintaining an updated inventory of all equipment available.
4. Update the history sheet of the equipment in the hospital.
5. Anticipating the requirement of the spare parts and their stocking.
6. Ensuring that the breakdown maintenance is swift and prompt to avoid
interruption to the services.
7. Provide safe and hazard free environment.
8. To ensure that the facility under their care is in compliance with relevant
law.
9. To provide conducive and high quality facility for the patient care.
10. Advise management about the cost in managing the facility.
11. Provide training to the staff.
It can be broadly classified as:
46
Civil Assets
Engineering Electrical
Bio-Medical
Services Supply
Mechanical
Services
•Medical gases
47
CIVIL SERVICES
The civil component of engineering services can further be elucidated via the
diagram below:
Building &
Infra
Circulation
Civil
Horticulture
Natural
Light
Civil assets of a hospital consists of the land on which the hospital premises stand,
the buildings as well as other features that serve it including the roads and
pathways. Apart from that, the general environment created around the buildings
are deemed to be part of its assets.
Hospital are planned in accordance with norms, standards and laws.
The circulation areas such as the streets, corridors and passages including the
entrance halls, staircases and lift lobbies inside the hospital account for 30% of
total floor area.
FAR = Total All Floor Covered Area

Total Land Area
% of Coverage = Total Ground Area X 100

Total Land Area
48
 Apart from that, the lighting should consist of the maximum availability of
the daylight to provide sufficient illumination.
 The colour should be bright but soothing.
 Sound – any noise need to be avoided.
 Temperature should be maintained within the comfort level – 22O to 32O.
ELECTRICAL SUPPLY
Electrical energy is an essential source of power to the hospital which almost all
the equipment in a healthcare facility need electric to function. This system used
for environmental control including HVAC, heating and cooling of water, lighting,
refrigerating and operating all type of medical facilities.
Thus, its proper maintenance is necessary for safety and reliability.
Main Source
Dual Supply
Electrical Supply
Control Panel &

Power Circuits
Cable & Switches
Alternate Source
Generator
Transformers
CVT/Voltage
Stabiliser
 Switchgears and control panels should be inside the building; in a shaded,

dust-free environment.
 Earthing should be in good condition
 All essential areas like the ER, OT, ICU, CCU etc. to have dual supply
 Standby diesel generator
 One electrical circuit for 10 lights/fan
49
 One power circuit for two 15 amp sockets

 Appropriate MCB
 Provide steel conduits tubes
MEDICAL GASES SUPPLY AND STORAGE
Medical gas supply systems in hospitals, and most other healthcare facilities, are
essential for supplying piped oxygen, nitrous oxide, nitrogen, carbon dioxide and
medical air to various parts of the facility. These systems are often monitored by
various alarm systems, at the point of supply and in particular areas. Equipment is
connected to the medical gas supply system via station outlets.
These are among the gases installed in a hospital:
 Oxygen, O2 (4 Bar)
 Nitrous Oxide, N2O (4 Bar)
 50% O2 + 50%N2O, ENTONOX (4 Bar)
 Medical Compressed Air(4 Bar atau 400kpa), MA
 Surgical Compressed Air(7 Bar atau 700kpa), SA
 Medical Vacuum, Vac
In the United Kingdom, there is a specific way of handling the medical gases under
the Health Technical Memorandum 02 (HTM02) guidelines.
HTM02 provides comprehensive guidance on the design and construction of

medical gas cylinders stores. Below is a summary of the key requirements for the
design of a medical gas cylinder store. There are 2 parts embedded in HTM02,
Part A and Part B. Part A focuses on the design, installation, validation and
verification. While Part B focuses on the operational management.
The safety characteristic of medical gases relies on four factors:
1. Identity – type of the gases

2. Adequacy – whether the gases supplied are meeting the demand
3. Continuity – to ensure that there will be no insufficiency in supply i.e. in the
event of electrical failure, the gases will still be available for use
4. Quality of supply – the quality, purity and cleanliness of the gases
Medical gas cylinder store design
Medical gas cylinders should be kept in a purpose built cylinder store that should
allow the cylinders to be kept dry and in a clean condition. When designing the
cylinder store a risk assessment should be carried out to ensure that the chosen
50
location is as safe as is practicable and that any manual handling issues are
engineered out at the planning stage.
As far as possible the medical gas cylinder store should:
 Allow cylinders to be stored under cover, preferably enclosed and not

subjected to extremes of temperature
 Be kept dry, clean and well ventilated (both top and bottom)
 Have good access for delivery vehicles and reasonably level floor areas
 Be large enough to allow for segregation of full and empty cylinders and
permit separation of different medical gases within the store
 Be totally separate from any non medical cylinder storage areas
 Be sited away from storage areas containing highly flammable liquids and
other combustible materials and any sources of heat or ignition
 Have warning notices posted prohibiting smoking and naked lights within
the vicinity of the store
 Be secure enough to prevent theft and misuse
Medical gas cylinder store operation
The layout and racking within the medical gas cylinder store should;
 Allow for strict stock rotation of full cylinders to enable the cylinders with the
shortest expiry time to be used first
 Allow large size cylinders (such as F, HX, ZX, G and J sizes) to be stored
vertically on concrete floored pens
 Allow small size cylinders (such as C, CD, D and E sizes) to be stored
horizontally on shelves (made of a material that will not damage the surface
of the cylinders)
 Allow for all ENTONOX cylinders to be stored at above 10°C for 24 hours
prior to use. (Where this is not feasible, it is important to consult the
ENTONOX Medical Gas Data Sheet for further information before using the
cylinders)
Handling cylinders
In order to comply with current manual handling regulations, it is advisable that

when handling medical gas cylinders, the following precautions are followed:
 Allow cylinders to be stored under cover, preferably enclosed and not

subjected to extremes of temperature
 Be kept dry, clean and well ventilated (both top and bottom)
 Have good access for delivery vehicles and reasonably level floor areas
51
 Be large enough to allow for segregation of full and empty cylinders and
permit separation of different medical gases within the store
 Be totally separate from any non medical cylinder storage areas
 Be sited away from storage areas containing highly flammable liquids and
other combustible materials and any sources of heat or ignition
 Have warning notices posted prohibiting smoking and naked lights within
the vicinity of the store
 Be secure enough to prevent theft and misuse
52
SHARIAH COMPLIANCE HEALTHCARE

What is Islam? It is the religion of the Muslims, a monotheistic faith regarded as
revealed through Muhammad as the Prophet of Allah.
Literally means “peace”.
Shafi’i
Others:
Zahiri, Hanafi
Tsauri etc.
Islam
(Peace)
Maliki Hanbali
What is Shariah? Shariah is a word that has always been related to Islam. Some
have largely interpret it as the law of Islam, while others have a deeper perspective
that it is not just a law but also a moral code.
Basically, Shariah is the Islamic law, which incorporates all the features of Islam
based on the Quran and Sunnah.
These two can be considered is the strictest source of Shariah while the scholars
have disputes against whether another two source – Ijmā’ (consensus amongst
scholars) and Qiyas/Ijtihad analogical deduction – can be included as the main
source.
Shariah or rooted from the word of Sha-Raa-‘Aa. The scholars denotes that the
word Shariah as an archaic Arabic word denoting “pathway to be followed” or “path
to the water hole”.
Ibn Taimiyyah (d. 1328) said Shariah is: “What has been shown by the Prophet
and what has been legitimised by him.”
Sources of Shariah can be classified as:
53
Primary Secondary
Consensus
Quran
(Ijma’)
Sunnah
Reasoning
(Prophetic
(Qiyas )
traditions)
Juristic
discretion
(Istihsan)
Public interest
(Al-Masalih Al-
Mursalah)
Local custom
(‘Urf)
What is Shariah compliance? The terms ‘Shariah-compliant’, ‘Shariah

compliance’, or ‘Shariah compliancy’ have never been really found defined in any
literature.
Oxford Dictionaries Online (2012) defines the word ‘compliant’ as “disposed to

agree with others or obey rules, especially to an excessive degree; acquiescent”.
Thus, the term “Shariah -compliant” may refer to an actions or activities that is
carried out in line with the tenets of Shariah, or obeying the rules and standard of
Shariah, and does not contravene to it.
The spirit of Shariah-compliant does not only exist in the practise that is complying
with Shariah, but as well as in realising its objectives (maqāsid al-Shariah).
Therefore, any activity that fails to protect and preserve the public interest or vice
versa can be deemed to be included as a Non Shariah-compliant practise
Maqāsid is the plural of maqsud or objective. Maqāsid al-Shariah brings the

meaning of “the objectives of Shariah”.
Shariah in general is predicated on benefits to the individual and the community,

and that its laws are designed to protect these benefits and to assist the
improvement and perfection of the conditions of human life. The objective of the
54
Shariah is to promote the well-being of all mankind, which lies in safeguarding their
faith (dīn), their human self (nafs), their intellect (`aql), their posterity (nasb) and
their wealth (māl). Whatever ensures the safeguard of these five serves public
interest and is desirable.
Religion
(dīn)
Wealth LIfe
(māl) (nafs)
Maqāsid
al-
Shariah
Lineage Intellect
(nasb) (`aql)
Nonetheless, these five is not the only objectives aimed at ensuring the wellness
of human-being, where there are others stated in the Quran, and Sunnah, or
inferred by the scholars
But the five objectives are the primary (Al-Asliyyah) or the essential part to the
normal order of the society as well as to the continued existence and individuals’
spiritual well-being.
A Shariah-compliant concept is a commercial (mu’āmalah) activity where its

practises are adhering to the Shariah derived from the substantive sources (al-
Quran, al-Sunnah, al-Ijmā’ and al-Qiyās) with the aim to safeguard the faith, life,
intellect, posterity and wealth.
Characteristics of Characteristic of Shariah Compliance in Healthcare:
 Halal Foods and Beverages

 Halal Medicinal Products
 Prayer Room
 Biomedical Procedures
 Operation and Management
55
TESTING, COMMISSIONING AND ACCEPTANCE OF

FACILITIES
The Navy: Commissioning means to ensure that ships and submarines, and the
equipment and systems that operate them, perform according to the design
intent is simple: Take it out and run it until it breaks.
From these roots, commissioning has evolved into a formalized and complex
process for buildings, as equipment, systems and operating procedures have
grown more complex. Ideally performed before owner acceptance,
commissioning provides documented confirmation that building systems perform
in compliance with the criteria to satisfy the owner’s operational needs as stated
in the project documents.
“Commissioning” as a process intended to assure that all building systems in a

facility, including sustainable building technologies, are installed and perform in
accordance with the design intent, that the design intent is consistent with the
owner’s project requirements, and that operations and maintenance staff are
adequately prepared to operate and maintain the completed facility. (American
Society for Healthcare Engineering (ASHE) Health Facility Commissioning
Guidelines)
“A commissioned building provides optimized energy efficiency, indoor air quality

and occupant comfort” and that “conventional commissioning has limited the
focus to HVAC systems but that coordinating other building sustainable design
systems in the commissioning process results in higher performance, sustainable
buildings.” (LEED-New Construction (NC) Reference Guide)
A Lawrence Berkeley National Laboratory study on commissioning found that “…

commissioning is one of the most cost-effective means of improving energy
efficiency in commercial buildings.” In fact, the authors concluded that
commissioning potentially can save as much as $18 billion a year in commercial
buildings.
Due to a number of factors – including the current health care business

environment, diminishing fossil fuel supplies, escalating and volatile energy
costs, global warming concerns, and a fragile electricity transmission grid – a
growing percentage of the population now supports sustainable design and
construction initiatives, which focus on stewardship of natural and fiscal
resources. Many in the healthcare industry believe that a societal “tipping point”
has been reached regarding the importance of green initiatives, and healthcare
56
facilities often elect to employ sustainable design and construction practices on

their projects.
A widely recognized indication of sustainable design and construction practices is

LEED certification. LEED is an acronym for Leadership in Energy and
Environmental Design, a sustainability rating system for buildings developed and
promoted by the U.S. Green Building Council (USGBC). In recognition of the
environmental benefits of commissioning, a minimum level of commissioning
activity – referred to as “fundamental commissioning’ of building energy systems
– is a prerequisite for LEED certification.
In Malaysia, eleven hospital projects have been certified as green in March 2016
under the GBI Hospital Tool, which was launched in 2015. The GBI Hospital Tool
covers six key criteria: Energy Efficiency, Indoor Environmental Quality,
Sustainable Site Planning and Management, Materials and Resources, Water
Efficiency, and Innovation.
"A green and resource-efficient hospital could promote public health by

continuously reducing its impact to the environment. It also recognises the
connection between human health and the environment, and demonstrates that
understanding through its operations, governance and strategy." (Chan Seong
Aun, 2016)
57

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International Islamic University Malaysia

Centre for Strategic Continuing Education and Training

Certified Healthcare Facility Manager

Revised For Use

FACILITY, OPERATION AND MAINTENANCE

Facility Operations and Maintenance falls under the science of Facility

Facilities management is the integration of processes within an organisation to

Effective facilities management, combining resources and activities, is vital to the

FM (from the perspective of operation and

Operations and maintenance usually addresses the day-to-day activities

The Facility Operations and Maintenance is mainly related to these areas:

1. Real Property Inventory (RPI) – Provides an overview on the type of

Preventive Maintenance consists of a series of time-based maintenance

Predictive Maintenance attempts to detect the onset of a degradation mechanism

The goals of a comprehensive maintenance program include the following:

The O&M should contain five distinct functions: Operations, Maintenance,

Some of the functions of OMETA are listed below (Meador, 1995):

General Employee Training - to ensure that plant personnel have a basic

What is “operation”? According to Merriam-Webster:

Simple definition – an activity of a business or organisation

Operations Management refers to an area of management that concerned with

Operations management is the management of processes that transform inputs into

The goal of operations management is to maximize efficiency while producing

Operations management focuses on utilising the resources from labour, materials,

For instance, a team of operations manager in a furniture store is required to

 Purchasing wood and fabric

JetBlue airlines is a successful airline that has an organisation strategy of

JetBlue locates ("location" is an operations decision area) its main transportation

Strategic operations decisions include the following:

 Facility location decisions

 How much long-term capacity the organisation will provide to meet

Tactical operations decisions have short to medium term impact on the

•Choosing facility location

United Parcel Service (UPS), an international package delivery service, formed a

1. UPS picked up the customer computers.

1. UPS picks up computers from Toshiba owners.

So what are the examples of operations management in healthcare services?

Healthcare is an extremely diverse industry. It primarily includes institutions and

Operations management is essential for the efficient functionality and provision of

Operations management plays a vital role in the healthcare industry. It is

1. to cause (something) to exist or continue without changing

2. to keep (something) in good condition by making repairs, correcting

Maintaining means the upkeep of property or equipment. The term maintenance

Why maintaining and why maintenance management? Modern maintenance

The lifetime of equipment can be categorised into six phases:

Shorter FDT – continuous on-line condition monitoring has to be applied

Longer FDT – off-lone condition monitoring has to be applied

The main objectives of LCC are:

1. To compare alternative products

Why maintaining? Before this, maintenance function has been seen as a

Availability performance – the ability of equipment to function properly despite

Cost-controlled maintenance is a traditional form of maintenance management.

The upper priority in the objectives of maintenance is to keep up planned

Indirect maintenance costs

The term maintenance consists of three main parts:

1. Corrective maintenance (CM)

2. Preventive maintenance (PM)

CM • Corrective maintenance covers all