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<font face="Garamond" color="#0066CC" size="6"><u><b>C A S E S T U D I E S</b></u></font>
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<b><font face="Garamond" color="#0066CC" size="4">Guerin Associates Inc.</font></b>
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<pre style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font face="arial">
MANUFACTURING BENCHMARKING STUDY
Client: International Consumer Products Company
Manufacturing results varied widely across this global organization. A pilot group of plants was
selected for internal benchmarking, including productivity, efficiency, yield, waste, line stoppage,
labor and maintenance comparisons. Results for over 150,000 tons of annual production were compared,
both by plant and by production line.
A workshop was conducted to review the basics of benchmarking, identify key performance indicators
and formulate precise definitions for accurate comparisons. After data collection, a second workshop
was held to compare results and review best manufacturing practices among participants. The final
report provided detailed analysis by plant and by production line, with specific improvement
recommendations.
Over $5 Million in waste reduction and improved productivity was achieved within the first year. Long
term savings are estimated at over $20M.
REAL ESTATE STUDY
Client: International Manufacturing Company
This client retained GA to study potential locations for a major office facility (300K - 500K GSF).
GA developed general specifications for a building program. Local economic development agencies and
(confidentially through them) development firms were contacted. Information was supplemented with
published data from other sources, including the US Department of Labor.
Analysis included:
Land and construction costs
Real Estate and personal property taxes
Local assessed / appraised value ratios
Lease costs (triple net and full service / gross)
Tenant improvement allowances
Employment and tax incentives
Utilities rates and incentives
Historical labor costs (facilities and general workforce)
Estimated long term costs of ownership and operation were developed, comparing five major metropolitan
areas in different regions of the US.
GA found differentials of nearly 50%, representing potential 10 year savings of over $40M.
FACILITIES BENCHMARKING
Client: U.S. Semiconductor Company
With significant new Mergers and Acquisitions, this company wished to obtain internal and external
benchmark comparisons, plus clear cost savings and improvement opportunities. GA analyzed data in
two ways: using the client's internal accounting categories, and also GA's benchmarking database.
Key Performance Indicators were applied in each area, to assess the relative value of services versus
costs. Workshops were held with staffing groups to evaluate internal and external cost differentials,
and review "best practices" to improve performance in each function. Scope included:
Maintenance & Operations
Custodial
Site Costs & Utilities
Space Planning
Move Management
Project Management
Reprographics
Security
Shuttles Food Service
Fitness Centers
Retail Services
Estimated potential savings, based on identified cost gaps, exceed $2M per year.
Early reports indicate prospective savings in utilities alone of $800K - $900K.
MOVE MANAGEMENT EVALUATION
Client: U.S. Computer Components Company
This firm has a high internal "churn rate," with approximately 10,000 internal moves per year in
over fifty buildings. GA was asked to evaluate overall process costs and effectiveness, to assist
the client in major upcoming contract decisions. GA compared detailed cost breakdowns, cycle times
and similar service quality metrics with peer companies and facilities in its own database. GA also
reviewed the organization and its processes, technologies and systems.
Numerous Key Performance Indicators were used to develop a "Value Analysis," balancing service
quality with costs. An assessment of existing conditions --including a report of potential cost
savings and improvements-- was presented to the full management staff.
In addition to identifying cost saving and performance enhancement opportunities, GA assisted the
client with contract scope definition, RFP questions, performance-based contract approaches and
service level metrics. GA was asked to identify vendors providing move coordination and implementation
services, and provided a list of approximately fifteen local and national candidates.
Projected annual savings are estimated at $1.22M.
FACILITIES BENCHMARKING
Client: U.S. Computer Manufacturer
Due to a large recent acquisition, this firm manages facilities in several Midwest and West Coast
locations. Guerin Associates worked with individuals in these locations to coordinate data collection, and
screen information for valid comparisons. Information was reported for mid-year, and GA's data
adjusted to achieve a common reporting year. Site and Utilities costs were normalized to account
for regional variations.
The project scope included:
Maintenance & Operations
Custodial
Site Costs & Utilities
Space Planning
Move Management
Project Management
Mail & Express Mail
Reprographics
Conf. Rm. Mgt.
Security
Food Service
Fitness Centers
Retail Services
The Final Report was presented on-site to a staff of about twenty-five managers.
Estimated potential savings, based on identified cost gaps, equal nearly $3M.
SPACE MANAGEMENT
Client: U. S. Software Company
This company had moved from high-growth to a cost-saving mode, and was interested in evaluating two
very different approaches it had adopted to internal space planning.
One set of buildings employed a significant percentage of closed private offices, while the other
utilized more open workstations. The client needed to evaluate the long-term implications of both
schemes for their 800K GSF headquarters facility.
GA reviewed and compared space utilization results by building and by floor, and also examined
circulation, support and common spaces (e.g. conference rooms). Findings indicated that results of
the enhanced floor plan were not as dramatic as expected, due to circulation requirements. Potential
improvements were also identified in workspace size, occupancy rates, and ratio of conference space to
office workspace.
Using conservative estimates to occupy and operate the facility, potential equivalent savings from these
improvements is over $3.5M (minus the cost of workplace changes).
SPACE MANAGEMENT
Client: International Chemicals Company
The scope of this study was very similar to the one described above.
The facility is a North American corporate headquarters, with approximately 850K GSF. Major wings of
the building are linked with a series of building cores and atrium spaces.
GA analyzed three major aspects of overall planning:
Space Utilization ("Building Efficiency")
Workspace Design ("Furniture Economy")
Occupancy Strategy ("People Effectiveness")
Space and Occupancy results were better than average. (Space Utilization, in fact, was close to "
best performer" levels.) Workspace Design, however, was found to be well beyond average (over 40%)
in allocation of area per workspace.
Based on these findings, the client has created a corporate-wide task force to re-evaluate and
potentially redesign workspace standards, with senior management support.
FACILITIES BENCHMARKING
Client: U.S. Semiconductor Company
The client had conducted internal benchmarking among six of its major sites, totaling 6 million GSF.
External cost benchmarks were sought from Guerin Associates to complement these efforts, and provide a
new perspective on performance measurement and "best practices" in facilities management for
non-manufacturing areas. The project scope included:
Space Utilization
Workplace Design
Occupancy Strategies
CAD/CAFM Systems
Relocation Management
Design & Construction
Maintenance & Operations
Custodial & Housekeeping
Food Services
Mail & Copy Services
Security
A Kickoff Orientation workshop was conducted to review survey forms and answer questions from the
facilities staff. Data collection took place over a three month period. After analysis of the data,
a Results Workshop was held at one of the sites. Numerous improvement and cost saving recommendations
were provided for this site, with representatives from the other five sites in attendance. The Final
Report provided detailed analysis for each of the six sites.
FACILITIES BENCHMARKING
Client: U.S. Computer Manufacturer
This project had the same functional scope as the one described above, plus Fleet Management. Total
facility size was approximately 850,000 SF, with several additional buildings in planning.
By applying GA's methodology to one new building alone, this client improved space utilization by
approximately 25,000 SF (almost 10%), deferring future construction and increasing "internal
rent" (costs charged to internal users) by $690,000 per year.
SPACE MANAGEMENT STUDY
Client: U. S. Network Equipment Manufacturer
Due to a recent merger, this high tech company needed critical performance measures to help improve
space management at its West Coast, Midwest and NYC facilities, totaling 2.4 million GSF. Their goal
was to "measure the right things in the right way."
GA reviewed space planning, move management and CAD/CAFM operations, conducted staff interviews and
performed benchmarking comparisons of several major facilities. The Summary Report identified numerous
major performance gaps in space usage, and provided over two dozen specific metrics designed to monitor
long term improvement in total asset utilization.
FACILITIES BENCHMARKING
Client: U.S. Pharmaceuticals Company
The client was interested in obtaining current, comprehensive benchmarks for management of a major new
facility. Initial occupancy is 1,400, with an ultimate population of approximately 5,000. Questions
to be addressed in this study included:
<i>How can world class service be achieved and maintained from the outset?</i></font></pre>
<pre style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font face="arial"><i> What are the right benchmarks to evaluate cost, performance and customer service?</i></font></pre>
<pre style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font face="arial"><i> What specific measures reflect first class service? (Example: % of work orders completed on time)</i></font></pre>
<pre style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font face="arial"><i> How are other companies organized to deliver service? What are reasonable costs, staffing levels,</i></font></pre>
<pre style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font face="arial"><i> utilities, etc. What is the impact of union involvement?</i></font></pre>
<pre style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font face="arial"><i> What is the extent of outsourcing? Are vendors consolidated locally? regionally?</i></font></pre>
<pre style="line-height: 100%; margin-top: 0; margin-bottom: 0"><font face="arial"><i> What practices and technologies provide superior performance at lower cost?
</i>
Guerin Associates approached 100 peer companies, ultimately working closely with twenty-five
participants from twenty-two leading companies to evaluate management methods, costs and performance.
Participants were evaluated and ranked in fourteen separate categories, including Maintenance &
Operations, Custodial, Space Planning, Security, Site Services, etc.
Leaders were identified in each category, based on integrated scores combining costs, customer
satisfaction methods and service levels (e.g. cycle time for delivery of mail). "Best performers"
in each category were interviewed to validate data and understand reasons for superior results.
Results, analysis and recommendations were presented in a detailed, comprehensive report. Visits
by the client to "best performers" were made for firsthand observations and learning.
SPACE UTILIZATION
Client: U.S. Pharmaceuticals Company
A major pharmaceuticals company needed to dramatically reduce operating costs for its New Jersey
headquarters and related area facilities. Among its concerns were the amount of office space, the
costs of satisfying user requirements, and the capital investment entailed in new facilities. Office
demands were rising, and rental space was unavailable in sufficient quantities.
Guerin Associates was asked to evaluate approximately 2.3M gross square feet of office space. Existing
plans were compared with four pharmaceutical / medical products competitors, and "performance gaps"
quantified. The client learned how efficiently its facilities were utilized, how much additional
internal capacity was available, and where space planning could be improved.
Based on this analysis of existing capacities, the client was able to confirm plans to delay over $50M
in new construction.
CAPITAL PROJECT PROCESS REDESIGN
Client: International Consumer Products Company
The client wished to accelerate implementation of capital projects totaling $140+ million annually by
reducing approval times. An initial survey was conducted to assess cycle times and approval processes,
and identify major reasons for delays, including both business and cultural issues. The existing
process was documented, from local projects up to those requiring board approval.
Results were examined at a Process Redesign Workshop, where each process step was evaluated for difficulty
and value. A new approval process was then developed with the team.
The number of separate process steps was reduced by approximately twenty-five percent.
CUSTOMER MANAGEMENT STUDY
Client: U.S. Food Service Company
Interviews were conducted with nineteen representatives for twelve key customer accounts. The
objective was to assess customer management in areas such as Quality, Customer Service, Product
Innovation and Pricing. Customer participants included Marketing, R & D, Purchasing and Operations
executives.
Findings were presented to the client's executive committee including the company president, and
contained comparisons with competitor ratings. Recommendations for improved product development and
marketing were also incorporated. High level results on trends in food service and significant study
findings were provided to customers, in exchange for their participation.
FLEET MANAGEMENT BENCHMARKING STUDY
Client: U.S. Consumer Products Company
This project involved examination of vehicle acquisitions and management totaling tens of millions of
dollars annually. The major areas of focus were motor company and fleet discounts, fixed and operating
costs, vehicle selection and features, staffing, vendor and disposal issues.
Twelve companies participated in the study, with over 40,000 vehicles. Areas examined include regional
consolidations, preventive maintenance, warranty recovery and technologies supporting acquisition,
ordering, repair, billing, etc.
Improvement opportunities were identified in motor company incentives, leasing holdbacks, national
contracts and model consolidation. Potential 3-year savings exceed $300K.
EMPLOYEE SUGGESTION SYSTEM BENCHMARKING STUDY
Client: U.S. Consumer Products Company
The client wished to improve an existing employee suggestion system, and involve more line manufacturing
workers. Earlier internal efforts had not been successful, and a streamlined process was sought to
optimize procedures, staffing, incentives and results.
Secondary research led to a candidate list of over 100 companies, 75 of which were contacted. Thirty-five
were mailed a detailed survey, and eleven companies ultimately participated. Measures compared included
value per improvement, employee participation rates and processing cycle times. Performance and gap
analysis led to practice recommendations for staffing, team composition, financial incentives and recognition
methods.
SPECIFICATION ADMINISTRATION BENCHMARKING STUDY
Client: U.S. Foods Manufacturer
Leading manufacturers from a number of different industries participated in this study of specification
management. Focus areas included new product development cycle times, productivity, resource deployment
and document management systems.
Eight companies completed the survey, revealing significant differences in areas such as productivity,
document cycle times, frequency of revisions, levels of automation, staffing profiles and linkages to
operating companies. Recommendations were provided regarding management structure, staffing, performance
measurement, document tracking and electronic systems.
</font></pre>
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<td height="16" align=middle width="655"><font color="#0066CC"><i>Copyright 2001. For more information, please call Guerin
Associates at <b>908-903-9070</b><i> or <A href="mailto:[email protected]">
[email protected].</A></i></font>
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