Software Aids Hard Space Use Decisions : Firm Specializes in Cost-Saving Programs for Companies to Plan Physical Layout
A “house,” sure enough, “is not a home .” Nor does an office or work station necessarily translate as a place of productivity, alas.
It’s a lesson--like the design of the wheel--that large corporations constantly relearn despite the well-publicized fact that second only to payroll, their physical facility is their second largest out-of-pocket expense. And how well, or how poorly, employees function within that facility is spelled out in hard dollars and cents.
“The maintenance alone on a facility will run about $30 a year per square foot,” according to Donn Allen Carter, director of marketing for Marina del Rey-based Computer-Aided Design Group, “or $15 million a year to support a 500,000-square-foot office or plant.”
A Disruptive Move
A stiff price for “openers,” and a figure that escalates rapidly if growth projections--as to the size of the work force and where they are going to be placed for maximum productivity--are wide of the mark.
“Every time an employee’s work station is changed,” Carter adds, “it’s a disruptive ‘churning,’ and you can figure the cost of it at about $10 a square foot in physical renovation. And a work station of 100 square feet is considered pretty tight. This is in addition, of course, to downtime while the move is being made, which is completely nonproductive time.”
And while, nationally, this “churn” rate averages about 25%--every fourth employee is moved once a year--”we’ve found some organizations where the churn rate hits 100%, and we even had one with an unbelievable rate of 150%.”
Founded by three computer-oriented architects in 1978 as a consulting firm for architects, interior firms and major corporations, Computer-Aided Design Group (CADG) slipped out of the conventional consultation mode last year when it began emphasizing the sale of its sophisticated, multifaceted, Facility Space Management software package enabling licensees to run their own on-going analytical forecasts and design needs.
Although on the surface a baffling, interlocking, series of 15 software modules--each covering such planning factors as inventory, location and layout planning, drafting, cost accounting, maintenance and site location--the modules interface and, in the words of Carter, “talk to each other as if they were one system.”
Rarely, if ever, he continues, would any client require all 15 software packages although the seminal module essential to any application of the CADG system is the Facility System Coordinator--licensing fee: $15,000.
“But from there on,” Carter adds, “it’s a matter of custom application. An industrial engineer would buy the coordinator and inventory software, of course, but would also probably need the space requirement programmer, the facility location software and the layout planner. In addition to the Facility System Coordinator, however, a bank would probably purchase the licenses for the ‘Facility Real Estate Strategist’ program, the one covering cost accounting and, possibly, the ‘Facility Master Planner.’ ”
A typical corporate CADG client, (generally defined as any entity trying to maintain coherence in an office or plant of at least 500,000 square feet) he continues, “will probably incorporate three or four modules representing an investment of between $100,000 and $200,000, although you can really get into a facility management program for as little as $70,000 to $80,000.”
Not subject to whims and upheavals in the hardware end of the computer industry, CADG’s software not only runs on the mainframes produced by the giants--IBM and Digital Equipment--but also on 25 other operating systems from more than 15 major hardware vendors as well.
While installation and training are separate from the licensing fees for the software, Carter adds, full support and consultation, including a telephone “hot line,” is always at hand.
As an example of the cost efficiency of the CADG facility management decision-making package, Carter cites the instance of a recent client--a large Midwest oil company--which was maintaining a 500,000 square foot facility, costing $15 million a year to operate.
“The 3,000 employees in this building,” Carter adds, “were growing at the rate of about 5% a year. Roughly 750 employees had been moved in the previous year and had experienced 12,000 hours of downtime--eight hours to pack up and eight hours to unpack--which represented $180,000 in nonproductive salary. In addition, the renovation of 125,000 square feet were involved in those changes at a cost of $1,250,000.
“One more thing happened near the end of the time period we studied--25 employees were moved into the division on a rush basis. The facility management staff didn’t have an automated inventory of space in which they could look up vacant space or develop a ‘move strategy’ that wouldn’t be overly disruptive.
“They did know, however, that there were more than 25 vacant stations spread around the building but, with only a month to find space for the new employees, their only option was to go outside to lease 4,000 square feet, which added $120,000 to the company’s annual expenses.”
Reviewing the company’s plight in terms of the software that would have been available to it, “we discovered,” Carter adds, “that we could have avoided 12,500 square feet of the renovation--a savings of $125,000--and the elimination of 1,200 hours of non-productive time, or $13,000 in salaries. We also discovered that they could have housed the 25 employees in the existing building and saved the $120,000 increase in rental.
“In all, we helped them uncover $263,000 in savings on that one 500,000 square foot building and, since their total facility holdings were many times that single example, they came up with savings that ran into the millions. They’re currently acquiring our facility management software.”
Admittedly, Carter adds, no computer software package is worth the physical space it occupies without the proper data that only the client can provide (the old “garbage-in, garbage-out” syndrome).
“And the data input can be an effort,” he continues. “Most of it is being kept on paper and it may take a week or longer for us to work with the client, sort through it all and determine the specifics. Not many corporate planners can tell you off the top of their heads how many managers they have with offices in excess of 150 square feet, for instance.
“With one client, it took over two months to accomplish this--not because we were slow or because they were disorganized, but simply because so much relevant data was needed that required detailed questionnaires and interviews.”
Founders and principals of Computer-Aided Design Group are Jeffrey M. Hamer as president, and executive vice presidents Charles E. Reeder and William J. Mitchell.
The holder of a master of architecture degree with honors and a certificate in urban design from the University of California, Hamer headed the computer-aided design efforts at Albert C. Martin and Associates, the pioneer architecture and engineering firm, before founding CADG in 1978. He is a member of the faculty of the UCLA Graduate School of Architecture and Urban Planning, and his book, “Facility Management Systems,” is slated for publication this year.
Reeder earned his master of architecture degree from the University of California, Berkeley, and before becoming affiliated with CADG, was director of computer research and development at Morganelli-Heumann & Associates, Los Angeles design firm, where he coordinated and implemented all software projects and managed space planning projects for corporate clients. His background includes consultant work for the IBM computer museum in New York and computer special effects for “Star Trek--The Movie.”
A native of Australia, Mitchell earned his bachelor of architecture with honors from the University of Melbourne, a master of environmental design degree from Yale University and a master of arts degree from Cambridge University, England. He heads the architecture/urban design program at UCLA and is a full professor in UCLA’s Graduate School of Architecture and Urban Planning. His text, “Computer-Aided Architectural Design,” was published in 1977 and his “The Logic of Architecture” will be published later this year.
