CPD WORKSHOPS

How to achieve operational cost saving in facilities?

Eng. Abdullah Al-ShehriVP, Facilities Management

Agenda

2

1 What is Budget? Types ?

2Facilities OPEX Reduction –Tools & Techniques

3 Examples of Cost Saving Projects – NCB Facilities

4 Q & A

1

What is Budget?

• A budget is a formal, numerical expression of how an organization

expects to operate for a defined period of time.

Budgeting Benefits:

• Improves communication and coordination.

• Forces management to plan.

• Provides a basis for performance evaluation.

Budgeting Approaches

Authoritative Participative Combined

• Senior management sets

everything from strategic

goals down to the

individual items.

• Lower managers and

employees fulfill these

goals.

• Known as a top-down

budget.

• Managers at all levels

and certain key

employees cooperate to

set budgets.

• Top management usually

retains final approval.

• Known as a bottom-up

or self-imposed budget.

• Combines the features of

authoritative and

participative methods.

• Known as an iterative

budget.

• Characterized by two-

way communication.

Types of Budget

• Short-term budget (usually one year)

• Projecting all estimated income and expenses during a given period.

• It excludes capital expenditures because they are long-term costs.

Operating Budget

• Long-term budget.

• non-routine expenditures for items like property, plant and equipment.

Capital budget

Budget Monitoring

Weekly analysis Annual analysis

►Frequency may be weekly, monthly, quarterly, midyear orannual.

►Helps to determine if allocated funds have been spent asspecified.

►Allows variations between the approved budget and actualspending to be analyzed and, if warranted, appropriateadjustments to be made.

Guidelines for FM Financial Operations

Understand the organization’s mission and

how the FM budget and financial decisions

move the organization toward that mission.

Facility Manage a huge cost center within

an organization & Must understand their

costs of doing business.

Clearly define roles in the FM budgeting

process (top-down versus bottom-up and

the approval process).

Understand fundamental accounting

practices and organization-specific practices.

Keep accurate financial records.

Compile accurate historical data for evaluating trends

and forecasting.

Prepare accurate and timely operational and capital

budgets.

Maintain clear, well-understood and documented

financial handling processes.

2

Facilities OPEX Reduction – Workstream

Implement Energy saving

Projects

Operation Re-modeling

Quality

Technologies“IOT”

Sustainability

Facilities OPEX Reduction – Tools & Techniques

Implement Energy saving

Projects

• Energy Auditing.

• Natural lighting concept.

• Smart Thermostat.

• Precooling System

• Smart Timers and occupancy sensors.

• Thermal isolation film

• LED

• Solar Power System

Operation Remodeling

• FM Contracts Re-Modelling

& Consolidation.

• Get Smart with Operating

Time.

• Space Optimization.

Technologies Sustainability

• Apply high quality

preventive & predictive

maintenance.

• IFMA, MEFMA, BIFM, …

• ISO 41001

• ISO 50001

• ISO 14001

• Green building concept

Quality

• CMMS

• BMS

• Predictive analytics

tools

• Water recycle systems

• Water saving

• Waste management

(paper recycling, Carton,

Plastic, Cane,..etc).

3

Grey Water Recycling Plants

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Cost saving: SR 118,000/ year

Send on a daily basis to cooling towers

Some examples of achieving OPEX Savings in facilities

Grey Water: Wash basins, tea pantry & AHUs Condensate water.

Capacity: 50 m3

Pre-cooling system for A/C units

15

Average monthly saving: 20-30 %

assist the compressor to deliver the demanded cooling requirements with lower energy consumption

payback is 3-4 years

Some examples of achieving OPEX Savings in facilities

Waste management (paper recycling, Papers,Carton, Plastic, Cane).

16

Average yearly income= SR 100,000/-

Thru Waste Management Service Providers to properly manage

its waste disposal as per ISO 14001 EMS standard

Some examples of achieving OPEX Savings in facilities

Energy Audit

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Average monthly saving: 5 - 10 %

Starting from level 1( walk through audit) which will save energy with neglected cost, up to detailed audit level 3

Some examples of achieving OPEX Savings in facilities

BMS

18

Average monthly saving: 5-10 %

Provide full monitoring and control overvarious parameters ,that will lead tominimize the operational cost

Some examples of achieving OPEX Savings in facilities

Smart Thermostat System

19

Some examples of achieving OPEX Savings in facilities

Average monthly saving is 8 %

PB period is 1 year

Programmable thermostat that will make the HVAC units work efficiently

Replacement of lighting with LED

20

Some examples of achieving OPEX Savings in facilities

Average monthly saving is 20-30 %

PB period is almost 18 months

• LED replacement is a quick win strategy.• Up to 80% from the conventional type.• Reduce the thermal load.

Installation of Lighting Timers and Occupancy Sensors

21

Some examples of achieving OPEX Savings in facilities

Average monthly saving is 7 - 10 %

Optimizing the usage of the lighting , to operate efficiently and effectively.

Supply & Installation of photovoltaic Solar Power system

22

Cost saving per year = SR 350,000/-

Total installed power for all branches is 500 KWP.

PB period from 7 to 8 years

Some examples of achieving OPEX Savings in facilities

Eng. Abdullah Al-Shehri, VP, Facilities Management

eng.ad.alshehri@gmail.com 0-50-561-4226