Facility Condition Assessment | Definition and Benefits

In supporting your asset management goals, it is essential to have the ability to anticipate your needs instead of repeatedly being caught off-guard. Your facilities are some of the most prized assets that you need to keep an eye on. But are you aware of how your facilities are doing? How do you know the condition of your facilities at any given time? And how can you put that information to good use?

In the next sections, we'll look into what a facility condition assessment is and why it should be part of your asset management strategy. We'll see an overview of the assessment process and how it fits into capital planning, maintenance strategies, and existing maintenance software systems.

Terminology

While going through facilities condition assessments and related topics, you might come across specific terms and expressions. Here are some common terminology related to facilities condition assessment and facilities condition index:

Renewal

Also known as "keep up costs." Renewal refers to the expenses required to try to maintain the original design. Say you have a facility designed to last 50 years. If you're at the 20-year mark but steadily deteriorating, this tells you how much you need to keep going for 30 more years.

Deferred Maintenance

Deferred maintenance is a kind of reactive maintenance. This sort of activity is what you might refer to as putting out fires.

Improvement

Improvement is a process that looks to go beyond the originally intended design. For example, an asset built to last 50 years exhibits improvement by extending its useful life to 70 years.

Assessment Interval

Assessment interval is the frequency by which you are going to perform the assessment procedure. Typical intervals might be once a year or once every five years.

Non-Destructive Testing

Non-destructive testing refers to various methods that allow you to gain information about an asset without destroying it. Examples of these tests include ultrasound testing, water sampling, and infrared testing.

Condition Drift

Condition drift refers to the change in condition over time. Remember that facilities assessment is a continual process. You want to ensure that you are trending in the right direction.

What Is Facility Condition Assessment (FCA)?

In a nutshell, a facility condition assessment is an overall analysis of the state of your facility. There could be several attributes that contribute to this assessment. Typical considerations include age, design parameters, construction material, and their ability to perform as intended. You want a manufacturing facility to manufacture products and an office building to be suitable for office usage.

You can expect the conditions of facilities to vary widely. You might find piping systems that are in bad shape, maybe notice some areas lacking insulation, or you might have a pristine-looking service area. These observations need to be consistently recorded, typically at the facility level. This way, management teams can understand whether the state of the facility is improving or getting worse. For newly-built buildings, routine assessments allow you to compare conditions to earlier constructs. You might be surprised to find that, sometimes, newer facilities don't necessarily score better than existing ones.

Types of Facility Condition Assessments

There are three broad types of assessments that you could perform. Note that these types are loosely defined. Details of each category may differ from one organization to another, potentially with varying assessment intervals.

Initial Assessments

An initial assessment, also known as a high-level assessment, might occur the first time you are evaluating a facility. It may not be completely comprehensive and would only typically cover selected critical systems. Think of it as a quick snapshot of your facility's condition. Initial assessments do not always require a physical visitation, as most information will be available on internal systems and original equipment manufacturer specifications.

Reassessments

Reassessments are more moderately focused checks where one typically performs a physical inspection. In this type of assessment, you can expect spot checks that look into maintenance backlogs and other related issues. While there could be an actual walk-through around the facility, the scope remains limited in this type of assessment.

Comprehensive

A lot of people refer to comprehensive assessments as a "crawl-through" or "full analysis." This procedure is a complete bottom-up assessment of your facility. You're essentially recording an inventory of all your systems and assets. In the process, you then also determine what your facility is worth.

Who Performs the Assessment?

From a resource perspective, there are two main ways you can go about performing an assessment. Either use internal resources or employ an external third-party.

Of course, several factors come into play when making a decision. You want to think about the level of expertise needed, the level of detail you are expecting, and the timeframe you're allowed. If you need to assess a single facility, then you might lean towards assigning an internal resource. As the number of facilities and complexity increase, then you start to consider more support personnel.

Regardless of whether you're tapping into your internal resources or getting external help, you need to be aware of your costs. Make sure that the requirements of your assessment align with the budget with which you can operate.

Assessment Focus Areas

When performing a facilities condition assessment, you need to pay attention to what your focus areas are. This way, the team performing the evaluation knows what sort of information to watch. You can then align these focus areas with your long-term goals and objectives. Here are some examples of potential focus areas and some basic questions or ideas about them.

Deferred Maintenance

What is the volume of deferred maintenance? What are areas of improvement in maintaining assets?

Energy

Which areas are wasting energy? Are there any glaring energy issues you can identify?

Asset Inventory

Organizations might experience a lot of uncertainties with their assets. Take, for example, a newly-acquired used facility. A complete asset and systems inventory becomes a vital focus area to understand its current state.

Capital Portfolio Evaluation

This focus area is useful for assessing new investments or when companies are changing hands. Generally, this tells you the valuation of your current assets.

Security, Structural, Risk Management

These focus areas can assist you in reviewing your insurance coverage and other risk management strategies.

Facility Condition Index (FCI)

When going through an assessment, you will need an objective measure to compare your findings. A facilities condition index acts as a benchmark to measure the condition of your facility. In other words, FCI is a quantification of a facility's current state. By calculating FCI values, you can compare facilities within your organization alongside similar facilities in other organizations.

Calculate the FCI by taking all maintenance and deficiency costs, then dividing them by the value needed to replace the same facility. In formula form, FCI appears as:

FCI = Total cost of existing deficiencies ($) / Current replacement value ($)

Another practical way to use FCI is by considering how deficiency values relate to your facility's target lifespan. Say, for instance, that you're looking to own a facility for 50 years. Serious deficiencies, while only in year five, can raise a red flag. You then want to figure out the cause of your costs and closely monitor the situation moving forward. If you need to pay more to fix a facility than replace it, it's probably in bad shape. As a rule of thumb, you can consider a facility with an FCI of 10% or less to be in good condition.

What to Do With This Information

From the previous sections, we have learned some valuable insight about assessments and ways to quantify them. The next question is what that information allows us to do.

Firstly, a proper assessment helps the organization to determine their resources, needs, and allocations. Resources, in this context, can refer to monetary value, labor resources, and even time. In many cases, maintenance managers are aware of the required work and the areas that need improvement. However, you might hear feedback about the challenges of not having enough time, people, or money. By having an objective measure, such as FCI, you can benchmark your current situation to best practice values. You then get a better sense of the resources that you need to justify an investment towards maintenance.

Another use of the information from assessments is to correlate your performance to various aspects of your overall operations. Here are some areas you can examine with your FCA findings and typical questions to consider.

Design and Construction

Do you perform design and construction in-house? Are you receiving multiple feedback from maintenance about the quality of job execution, or perhaps subpar spares?

Project Management

What is your current commissioning process? Are you performing follow-up checks to ensure that plans are meeting the intended design and functional requirements?

Managing Space

How well are facilities able to perform? Can they maintain their condition? Do you find people needing to move across locations?

Maintenance Strategy

Are you making the right choices around the strategies that your company uses? How much of your maintenance is preventive? Is there value in increasing IoT capabilities?

Asset Management

Are my investments helping me to maintain the condition of my facilities? How am I tracking with my projected asset useful life? What is the renewal cost?

Capital Planning

Does it cost more for us to maintain this facility rather than replace it?

What Facility Condition Assessment Is Not

As you might have realized by now, a facilities condition assessment can impact various parts of your organization. It's tempting to think that an FCA can replace other valuable processes in your company. However, it is imperative to make a distinction of what a facilities condition assessment is not. Some things are not the same as an FCA but can be related to it.

Financial Analysis

Analyzing an FCA accounts for the costs to repair, replace, and renew components. However, it is not a substitute for a complete financial analysis that considers the total net worth of a portfolio.

Functional Analysis

A functional analysis looks at the different functions that are necessary for the operations of a company. It evaluates whether an organization can deliver its duties as promised. A facilities assessment, while also considering functional needs, only does so in a limited scope.

Facilities Needs Index (FNI)

Similar to functional analysis, FNI evaluates whether a company has the required facilities to be functionally sound. A facilities assessment would not account for the same exhaustive scope.

Capital Plan

Lastly, the capital plan drives the organization's actions on how to spend money on new facilities. While a facilities assessment holds valuable information to help build this plan, it does not provide the same detail.

How Can I Use Facility Condition Assessments for Reliability and Maintenance?

The most sought after goal of all maintenance work is to achieve reliability. Knowing the information from an FCA equips you with valuable insight in strategizing your maintenance approach. Here are some practical examples of how you can drive your reliability and maintenance efforts.

Condition Trending

Compare how the patterns of the condition of your facilities track against your objectives. Let's say that you have set an uptime goal to keep your production costs optimal. Are your condition trends allowing you to achieve your targets? If not, do you need to review your overall strategy?

Defect Log

A proper facilities assessment contains specific defect descriptions. Additionally, remember that you have a list of corrective work that might be sitting in your CMMS. The synchronization of these sources within your facility grants you a real-time view of your overall condition.

Value of Facility, Systems, and Assets

With an overall view of your repairs, costs, and asset conditions, you get a more accurate representation of your value. Investments can set you back by large sums of money, so you want to spend your resources wisely.

Functional Objectives

You can see hints of gaps in your overall functional objectives through a facilities analysis. Take, for example, safety. If you're always finding safety issues in your plant, then you might want to revisit your maintenance practices.

References and Resources

Thankfully, there are loads of resources available about FCAs and facility management. Here are several references that you might want to check out.

ASTM (American Society for Testing and Materials)

ASTM provides the standard that is currently in use, relating to facility analysis or condition analysis. As of writing, the latest available standard is ASTM E2018-15: Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process.

IFMA (International Facility Management Association)

Say, for example, that you want to learn the standard FCI for particular spaces. Or perhaps the amount of space required for a specific application. IFMA provides some benchmarking statistics that are helpful for companies across various industries.

NACUBO (National Association of College and University Business Officers)

NACUBO is an organization that aims to support higher education institutions. They are one of the front-runners in standardizing what we now know about facilities condition assessments.

APPA

APPA also relates to standards and practices in higher education and academic institutions. They provide a good body of knowledge when it comes to benchmarking values for similar facilities.

Common Questions About FCA

Regardless of whether you've just discovered FCA or you've been using it for a while, it's normal to have a few questions. Here are some frequently asked questions about a facilities condition assessment.

What Triggers a Company to Develop an FCA Process?

For most organizations, FCAs start coming up as soon as someone identifies the value it can bring. For example, you might discover the advantages of an FCA from a seminar and realize your need for it. In that sense, education, training, and awareness for opportunities play a role in recognizing the need for change.

Are There Specific Tools and Software for FCA?

There are various tools and resources available to guide teams in conducting a proper assessment. Some of the references mentioned earlier can give you a headstart. As for software, yes, there are many systems available specifically for logging the results of an FCA.

Can I Use Any of My Existing Systems in FCAs?

We mentioned earlier about using the information from FCA with other maintenance data that you may already have. By linking your existing systems together, you can make the sharing process more seamless. Your existing CMMS or EAM software would be ideal places to start. See what data is available in there when incorporating your facilities condition analysis.

Conclusion

A facilities condition assessment provides valuable information about the current state of your facility. The applications of these analyses are limitless and can go beyond what you can physically observe. Analyzing FCA data can pave the way towards process improvements, strategy development, and overall reliability. The condition of a facility not only describes its past but also provides an outlook on its future.

Note: This article is based on a webinar “Facilities Condition Assessment” with Joe Lonjin. To view the recording of the webinar, visit this link.