How to Make 2018 the Year of Continuous Improvement
When it comes to building operations, few real estate companies can honestly state that there is a culture of continuous improvement. Even portfolios that are operated exceptionally well rarely can point to cultural reasons for the success. More likely, there are a few highly experienced building operators who intuitively know which adjustments to make and how to fix the myriad of problems that arise in buildings on a regular basis.
Unfortunately for all of us, these operations rockstars cannot be everywhere at once, and many are retiring soon. What are real estate owners and property management companies supposed to do when the current crop of highly skilled individuals are no longer around? The answer may be to develop a robust training program to transfer this knowledge from one generation to another. A better option may be to leverage technology to create processes that can plug in any reasonably knowledgeable individual to get the job done, and continuously improve over time.
Where to Start
When a property finishes construction, the building systems are commissioned to ensure that equipment is installed properly and tuned to the optimal settings. However, most teams do not have a system in place for dealing with equipment degradation and performance “drift” over time. Scheduled filter and belt replacements, oil changes, bearing inspections, and the others only scratch the surface of what should be done on a continuous basis to keep a building operating at optimum levels.
Continuous commissioning on the other hand, is an ongoing process to resolve operational problems, improve tenant comfort, and optimize utility consumption. In essence, continuous commissioning is the process of collecting data from the equipment critical to a properly functioning building every second of every day, instead of more ad hoc intervals. These data are used to generate an accurate baseline of normal operating performance and occupancy patterns. Any deviations from this norm can be immediately spotted by analytical software, and operators can be directed to the root cause of issues in real time.
(The individual elements of this process, including highly granular data collection, robust analysis using machine learning, and a focus on actionable insights have been covered in previous articles)
But how does this connect to a culture of continuous improvement?
With continuous commissioning, building operators do not need years of experience through trial and error to do their job effectively. Instead, an individual with some knowledge about building systems should be able to begin contributing immediately, and help improve how the building runs going forward.
Like anything in life, if most of someone’s time is spent reacting to problems, they will be less able to think strategically or implement long-term solutions. This is the case in many portfolios, where just maintaining the status quo in building operations is a full-time job. Responding to tenant complaints, investigating the cause of issues, and troubleshooting solutions is slow and mentally costly. If you add the time it takes to complete preventative maintenance schedules, there is little left over for improvement initiatives.
Conversely, if technology can be leveraged to notify operators when equipment conditions require maintenance, and predict equipment failure before it occurs, time will be made available to commit to continuous improvement. In this fundamentally different culture, building operations executives and on-site teams can work in coordination to improve metrics on a variety of levels.
What to Improve
According to a recent survey by Building Engines, most building operators say that their number one priority is to ensure the health and comfort of tenants. Operations teams should be striving to develop and continuously improve upon metrics related to this goal. Obviously, not everything will be within the control of operators or the result of equipment issues, but there are meaningful and measurable improvements to be made in nearly every commercial real estate portfolio. Similar metrics have been used in the manufacturing industry for decades, yet the effectiveness (or lack thereof) of building operations in CRE portfolios largely remains a mystery.
Some possible metrics to measure include:
Number of tenant complaints received
Ratio of planned vs unplanned maintenance
Utility cost reductions relative to baseline
Number of “extreme” failure events with equipment
There are legitimate reasons that these metrics have not been developed in commercial real estate. The most obvious is that, up until recently, there was no conceivable way to get data around the performance of equipment or the utility costs associated with operations. In addition, there would be no reason to record, for example, the number of tenant complaints received if there was no reason to believe this number could be affected.
Technological developments now make this data available, automatically collected, and continuously analyzed to help improve performance without adding additional workflows or reporting requirements. Early adopters have immediately recognized the usefulness of being able to continuously commission their buildings, and are investing in these technologies to provide the foundation for a culture of continuous improvement, as well as a competitive differentiator.
How to Improve
Continuous fault detection software can discover issues in buildings before there are noticeable effects on tenant comfort. By addressing these problems proactively, metrics can be improved, and building operators of all levels can be confident in their ability to deliver a well-run, profitable asset. For example, one multifamily apartment building had an issue discovered in one of its elevators before there was an emergency shutdown. Without continuously commissioning the elevator, this issue would not have been discovered, and tenants would likely be trapped in the elevator when full failure occurred.
Other times, tenant discomfort is the direct result of the mistake of a building operator or outside vendor working in the building. Building systems get turned off to perform maintenance, and sometimes are not turned back on, or are set to the wrong schedule afterwards. Sometimes, an outside vendor working in an unfamiliar space may simply bump into a off switch and turn off a piece of equipment. Humans make mistakes, it’s part of life. But a culture of continuous improvement would not accept that these mistakes go unnoticed long enough to affect tenant comfort. Continuous commissioning not only identifies failures, but also identifies when equipment is off when it should be on.
The opposite scenario is equally important. When equipment is left on when it could be off, it may not directly affect tenant comfort, but it is adding unnecessary wear and tear to equipment, and wastes utility costs. These are not fluffy, marginal costs either. Many commercial office properties leave lights on around the clock, either because there are no controls installed, controls are misprogrammed, or due to a simple oversight. In one building, changing lighting schedules to exactly match occupancy patterns reduced the costs associated with lighting by 57%, which improved the asset value of the property by over $500,000.
Continuous commissioning, and the culture of continuous improvement that it enables, is not a silver bullet solution to one specific problem, it is more like riding a bike. When you ride a bike, you are subconsciously making micro-adjustments to ensure that you stay upright and move at the desired speed. In the same way, operating a building without continuous commissioning is like riding a bike without balance, and making repairs after you fall over. The first step is to acquire constant feedback on whether you're balanced. Then you can push yourself to not only stay up, but improve how efficiently you ride the bike.
Enertiv's Asset Intelligence solution is a plug-and-play continuous commissioning software that can quickly start improving how your buildings are operated. Schedule a demo today to see how!