Property Management Transformation

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Enabling the intelligent enterprise

Consulting Services Software

SBA certified 8(a), Small Disadvantaged Business

Property Management Transformation

Property Management process, technology

and organizational improvements at a DOE

Science Lab

Project Overview

http://www.brillient.net

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The challenge

Effective property management is a challenge for any Government agency

Tax payer dollars spent in acquiring assets have to be properly accounted for

Acquisition, receiving, tagging and control

Inventory management across multiple locations

Managing proper use, custodianship, loans, borrows, transfers, property pass, excess

Preventing theft, pilferage, loss

Wall to wall inventories, audits and reporting requirements

Changing regulations on definitions of controlled and sensitive assets

Managing agency IG audits, GAO audits

Adverse media publicity on stolen or lost assets invites congressional scrutiny

Technology issues – quality & accuracy of property data, integration of property

systems with procurement and rest of supply chain

Process issues – lack of well designed and documented processes & procedures

enabling effective property management

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Introduction

Brillient Corporation has built strong capabilities in Property Management

Transformation

Property management transformation involves

Taking a holistic approach to Property Management

Data analysis and data driven approach to identify problems and gaps

Analysis of processes, procedures and policies

Evaluation of people, training and best practices

Technology and software applications used

Integration with the rest of the supply chain process

Identify transformational changes and recommendations to improve the state of

property management

Tie improvements to organizational goals – cost savings, reduced risk, compliance

with policies and regulations

A past performance project executed for a

Department of Energy (DOE) science lab

in two phases is presented (referred to as “

Client

” or “

lab

” in the following slides)

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Phase 1 summary

Defined a “to be” state to achieve the lab’s property management goals

The “as is” and “to be” states were measured using quantitative and qualitative Key Performance

Indicators (KPIs)

Executed a gap analysis which identified “contributing gaps” with processes, technology, and

organization

Detailed recommendations were identified to bridge the gaps and achieve the “to be” goals - listed by

priority (critical, important, needed and optional); along with implementation estimates

The overall state of property management at the Client is complex, evolving and can be further

improved. This is not atypical of any large organization involving multiple departments, systems and

complex processes

Brillient Corporation was contracted to

perform a Phase 1 assessment of Property

Management at the Client

The team assessed the current “as is”

state of the Client’s Property Management

System data quality, standardization,

taxonomy as well as asset management

processes and the technology elements

impacting data quality

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Goals & challenges

Reduce Risk – with

passing IG/GAO

audits and any

adverse publicity

Ensure compliance

with DoE policies

and regulations

Cost reduction &

cost avoidance

Key value levers

Data quality issues with

inventory data

Inconsistent definitions and

lack of standardization with

taxonomy

Process gaps leading to data

quality issues

Technology challenges

integrating with the supply

chain process

Lack of data insight

Challenges

Client’s property management

team and system face the

following problems and

challenges:

Goals of a sound Asset Management process

Lab Management

Ability to pass an IG or other audit

Contract performance scoring – Property

Management is a significant part of the Management & Operations (M & O) score

Sound capitalization and depreciation process for finance to pass

internal/external audits

Divisions & scientists

Scientific work proceeds unimpeded

Assets procured from division funding controlled

Traceability to report back to funding sources

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Assessment Methodology

Assessment of

Property

Management

System Data

Quality &

Standardization

Data analysis Technology Organization & Human Performance Process analyses Out of scope

Analysis of Property Management data extract for trends and data quality, standardization and taxonomy issues

Analysis of Property Management data to a procurement data

Statistical sampling of assets on premises, compare with AMS data

Statistical sample

o 39.6% of all assets by $value

o 15 building locations (23% of locations) o 9 divisions/departments

The assessment team utilized a proven methodology analyzing the data, process, technology and people impacting data quality. Key Performance Indicators (KPIs)were used to quantify findings.

Interviews with key personnel o Procurement

o Receiving

o Asset management

o Finance

o IT

Documented process flows

Reviewed documentation and manuals

Analyzed for gaps and weaknesses impacting data quality and inconsistencies

Review of Property Management system’s technical functionality, user interface and data model

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Analysis of data, processes, technology

and supply chain integration

The assessment team conducted a “bottom up” data analysis of data quality, trends and patterns, including:

Analysis of a statistical sample

Analysis of the entire inventory

Comparing a subset of higher value inventory to procurement

Analysis of very high value items

Processes & policies were analyzed for:

Adequate controls and choke points

Clearly defined practices

Process efficiencies

Training of personnel

Supply chain integration

Data consistency with up front supply chain (procurement etc)

Accuracy and data flow

Data quality impacts

# of Assets and Acquisition Costs by Year

1 10 100 1,000 10,000 100,000 1,000,000 10,000,000 100,000,000 1,000,000,000 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 Year A c q u is it io n C o s ts ( $ ) -500 1,000 1,500 2,000 2,500 3,000 3,500 # A s s e ts

Acquisition Cost # Assets

Number and Percentage of Assets by AMS Asset Type

1 10 100 1,000 10,000 100,000

AMS Asset Type

# A s s e ts 0 10 20 30 40 50 60 70 P e rc e n ta g e o f A s s e ts # Assets 11,619 6,511 675 363 268 50 27 18 5 1 Percentage of Assets 59.47 33.33 3.45 1.86 1.37 0.26 0.14 0.09 0.03 0.01 AUTOMATIC DATA PROCESSING EQUIPMENT (770) LABORATORY EQUIPMENT (720) MISCELLANEOUS EQUIPMENT (799) OFFICE FURNITURE AND EQUIPMENT (730) SHOP EQUIPMENT (755) MOTOR VEHICLES AND AIRCRAFT (725) HOSPITAL AND MEDICAL EQUIPMENT (715) SECURITY AND PROTECTION EQUIPMENT (750) REACTORS AND ACCELERATORS (680) ELECT. GENERATORS, TRANSMISSION

Asset Values by AMS Asset Types

1 10 100 1,000 10,000 100,000 1,000,000 10,000,000 100,000,000 1,000,000,000

AMS Asset Type

V a lu e ( $ ) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% P e rc e n ta g e o f A s s e ts Value ($) 288,225,870 144,436,279 138,436,292 15,436,074 10,841,826 6,901,959 3,197,576 384,518 239,855 7,497 Avg Asset Value 44,308 12,432 27,687,259 22,868 29,867 25,754 63,952 14,241 13,325 7,498 Percentage of Assets 47.40% 23.75% 22.77% 2.54% 1.78% 1.13% 0.53% 0.06% 0.04% 0.00% LABORATORY EQUIPMENT (720) AUTOMATIC DATA PROCESSING EQUIPMENT (770) REACTORS AND ACCELERATORS (680) MISCELLANEOUS EQUIPMENT (799) OFFICE FURNITURE AND EQUIPMENT (730) SHOP EQUIPMENT (755) MOTOR VEHICLES AND AIRCRAFT (725) HOSPITAL AND MEDICAL EQUIPMENT (715) SECURITY AND PROTECTION EQUIPMENT (750) ELECT. GENERATORS, TRANSMISSION

Asset Counts and Aggregate Values by Value Range

1 10 100 1,000 10,000 1 2 4 8 16 32 64 128 256 512 1,0 24 2,0 48 4,0 96 8,1 92 16, 384 32, 768 65, 536 131 ,072 262 ,144 524 ,288 1,0 48,5 76 2,0 97,1 52 4,1 94,3 04 8,3 88,6 08 16, 777, 216 33, 554, 432 67, 108, 864 134 ,217 ,728

Asset Value Range ($)

# A s s e ts $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 A g g re g a te V a lu e ( $ M )

Count of Assets by $ Value Aggregate $ Value of Assets Corresponding to Count

Serial Number Data Quality

90.7% 4.6% 3.9% 0.6% 0.3% SN Populated Empty SN SN Not Found SN is 2 characters or less Noted as "TBD"

Assets with Duplicate Serial numbers

-20 40 60 80 100 120

Same mfr, different model Potentially same mfr, diffferent model

Different mfr, same model Same mfr and model

# A s s e ts $-$1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 A s s e t V a lu e ( $ M ) # Assets Value ($M)

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Gap analysis and quantification

The analysis of the “as is” state was used to define a ”to be”

set of goals quantified by Key Performance Indicators

(KPIs).

These were then used to conduct a gap analysis also

quantified by KPIs.

Gaps, goals and KPIs were captured by functional areas

mapped to the lifecycle of an asset from procurement

through receiving, asset management, audits/checks, retiral,

disposal.

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Recommendations to bridge gaps and

achieve goals

Recommendations

Detailed

recommendations

were identified

Recommendation

themes

Process

Technology

Data integration

Data quality

Organization/mana

gement

Critical – essential to ensure ongoing data accuracy

Important – key improvement

Needed – improvement is important but is also ongoing

Optional

Gaps

Contributing

gaps and

KPI gaps

by functional area of asset life cycle Mapped to gaps addressed

Recommendations were prioritized by

Mapped to Value Levers Reduce risk Compliance Cost savings

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Recommendations

Recommendations were made at a detailed and tactical

level

Functional areas and owners were identified mapped to

the supply chain cycle

For each recommendation a level of complexity to

implement was also estimated. Mapped with the benefits,

these help identify quick wins and return on investment

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Phase 2 summary

Brillient Corporation was contracted to perform a follow on Phase 2 project to assist with implementation of

key recommendations

The primary goals of this phase were to:

−

Define changes to the organization – functions, accountability, roles & responsibilities

−

Develop detailed As-Is and improved To-Be processes, along with quantified benefits

−

Develop training material and best practice recommendations

Recommended Best Practices

Cost Benefit Analysis, Estimates & Schedules

AMS Clean-up process document

AMS Clean-up Data Change log

Check & Balance process documentation

Updated (sub) process flows

Training Manual/Schedule

Training Plan

“As-Is” process & “To-Be” process flows

Cost & Process Benefit Analysis

Documented Roles and Responsibilities

Deliverables

Advanced sensing technologies for real time monitoring and dramatic savings in inventory

Management, communications & website improvements

Task 4: Best Practices

– Assess & recommend Supply chain best practices

Developed scripts for automated detection of data quality issues

Developed automatic data cleanup scripts covering 49.2% assets

Developed manual cleanup recommendations covering 50.8% assets

Task 3: AMS Data Quality & Cleanup

– Develop automatic scripts to clean up data in AMS

– Recommend AMS manual process changes (if needed)

Re-organized Property Management Organization

Functions, accountability, roles & responsibilities defined

“How-To” training manual (web publishable) Task 2: Training Documentation

– Develop detailed step by step training documentation for property management functions

Process time savings ranging from 8% - 90% for different processes

Annual savings amounting to ~21% of extended property management budget)

Wall to Wall inventory cost savings of ~67% Task 1: Business Process Flows

– Develop detailed “As-Is” and “To-Be” process flows for property management functions

– Define roles and responsibilities of the Property Management Organization

Benefits Delivered Project Tasks

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Process & Inputs

The assessment team utilized a proven methodology analyzing the data, process, technology and

people impacting Property Management Business Process and AMS Data Quality.

INPUTS

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Task 1: Process improvements, defined

roles, responsibilities

Task 1 Scope

Finalizing “As-Is” Phase 1 process flows of Purchase Order, Ebuy/B2B and PCard

Developing “As-Is” process flows for loans, borrows, transfers, excess, property pass, return to vendor and fabrications

Developing “To-Be” process flows of Purchase Order, Ebuy/B2B, Pcard, loans, borrows, transfers, excess, property pass, return to vendor (RTV) and fabrications

Cost Benefit Analysis of “As-Is” & “To-Be” process flows

Defining and documenting specific roles and responsibilities

Tax payer dollars saved due to more efficient and tighter processes, well

defined organizational functions, accountability and roles & responsibilities

Reduced inter-departmental communication and dependencies

Divisions more involved, aware of the movement and state of assets,

reducing effort/cost to manage assets and Wall to Wall inventories

Increased efficiencies, higher data accuracy and reduced errors due to

higher degree of automation. ~40 Check and Balances

Effective Lifecycle Management of assets resulting in proper tracking and

control of assets, compliance and passing audits

Qualitative Benefits of “To-Be” organization and processes:

Example of a simple process chart High level organizational redesign

14 processes covering the entire property management life cycle

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Detailed training manual including definitions, roles &

responsibilities, process definitions and “How-To” processes

description for all individuals involved with property management

Step by step processes defined for:

PO, B2B/eBuy and Pcard procurement methods

Domestic Loans Foreign Loans Borrows Outward Transfer Inward Transfer Property Pass Excess Return to Vendor (RTV) Fabrications

One-stop reference document for property management and

training

Key attributes for hiring a property liaison or property rep

Publishable on the property management web site

Task 2:Training Documentation

Task 2 Scope

Training manual

Introducing Property Management basics as defined by DoE

Documenting the “new” Property Management Organization including functions, responsibilities and

accountability

Describing differences between incoming and outgoing assets

Creating specific training

requirements and procedures for various property management roles

Working with PMIP team on

developing step by step procedures

Providing information on the types of forms and their uses as it relates property management functions

Benefits of Training Documentation:

Process Task #

WHO WHAT HOW

2,5,6 Requestor 1. Works with Property Custodian to fill form and/or request transportation to pickup asset

3,4,12 Forms:

1. Loan Request web form 2. High Risk form 3. DOE 4420.2

7,8 Property

Custodian (Division)

1. Evaluate asset High Risk

2. Fill web forms 2-1. Fill Loan Request and High Risk web form on the Property Management website

30 Property

Specialist-High Risk (PMCT)

1. Receive High Risk evaluation web form as email attachment

1-1. Determine eligibility of Loan Request based on High Risk web form

• Accept High Risk results

• Do not Accept High Risk results 9-15 Property

Representative (Division)

1. Receive Loan request web form and high risk evaluation web form as email attachment 2. Send copy of loan

documentation to Property Liaison & Shipping Clerk 3. Assemble DOE 4420.2 & send to Property Liaison 4. Receive notification about loan 5. Shipping document received from Shipping Clerk 6. Check in 30 days if

asset has been received or sent to Custodian

2-1. Receive Loan Request eligibility information:

• High Risk results accepted

• High Risk results not accepted 2-2. Send copy of loan documentation only after high

risk result has been accepted 3-1. DOE 4420.2 information can be obtained from

the high risk approved loan request web form 4-1. Currently identifying IT requirements 5-1. Inform custodian that Shipping document has

been received and asset will be shipped 6-1. Check with Shipping if asset has been shipped

or loaned asset has been returned and inform LBNL Custodian about status 16-29 Property Liaison 1. Send to Borrowing 1-1. Receive completed DOE 4420.2 from Property

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The entire AMS asset base of approximately 21,000 assets was analyzed

Scripts developed for detecting data quality issues

Financial errors including capitalization and depreciation

Taxonomy issues

Dates

Missing or erroneous data elements

Inconsistent data

Documentation provided for IT to schedule automated execution of these data quality scripts to find recurring

issues

Data quality issues found for 17,759 asset instances (a single asset may have more than one data quality issue)

Data quality issues (taxonomy) were fixed using automated scripts for

49.2% of the total asset base and

10.63% of the asset base by acquisition value

AMS Catalog now contains consistent taxonomy definitions

For the remaining data quality issues manual data cleanup

processes have been defined

Task 3: Data Quality and Cleanup

Task 3 Scope

Developing simple data cleanup processes

Defining Check and Balances to mitigate future errors and

processes

Documenting process

methodologies for automatic script cleaning and manual data scrub

Developing Data Change Log for AMS

Assessing 100% AMS assets by determining data quality issues and providing recommendations

Benefits of Data Quality Identification and Cleanup:

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Defined and recommended use of an information-driven supply chain

Best practice recommendations categorized under:

Advanced Sensing Technologies

Communication, education and signage

Management

Human Resources

Property Management website

Reporting and other

RFID, GPS and Laptop detection recommendations provide real time visibility into supply chain and significant savings in tracking,

location sensing and inventory efforts

Task 4: Best Practices

Task 4 Scope

Assessing RFID implementation at LBNL

Reviewing supply chain best practice recommendations

Providing estimated costs and return on investment analysis

Prioritizing recommendations by benefit levels

Performing a Cost Benefit Analysis

Providing implementation estimates and schedules

Qualitative Benefits of Best Practice Recommendations

RFID Labels

RFID Label printer

Hand held reader

Door way scanners

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