Good Practice Guidance for Refurbishment Projects

Nowadays quality thinking has spread across the entire property process and extends to all management functions, making inspection of manufactured product on its own seem a rather than primitive idea. Quality management has become proactive, making plans to bring about continuous quality improvement and to achieve a more desirable future. The aim is to get rid of poor quality and keep the quality process going during post occupancy. Quality management has progressed, establishing proactive rather than reactive management. Continuous quality improvement in properties has become one of the most important parts in TQM progress, and based on statistical method Deming, one of the most famous quality guru, formulated a system for problem solving to implementing CQI as the Plan, Do, Check and Action cycle. According to him once these states have been systematically completed the cycle starts again with further planning. As for J. M Juran, continuous improvement has acquired a broad meaning, i.e., enduring efforts to act upon both chronic and sporadic problems and to make refinements to process. (Smith, 2003)
How to implement CQI in the briefing: The objective of refurbishment projects is to continuously improve quality by eliminating non-conformance in every activity throughout the property management. The benefits which can accrue from implementation of a successful quality Improvement Program are enormous: improved customer satisfaction, elimination of error and waste, reduction in operating costs, increased motivation and commitment of employees, increased profitability and competitiveness. However, implementation of CQI is not a step to be undertaken lightly in properties and especially in this case where there are 5 different scenarios. According to L&M Faure the process demands absolute commitment from every one stating with senior management, if it is to succeed. And inadequate attention to consistently meeting the requirement of customers frequently results in business failure. Every company is unique; consequently, every continuous quality improvement program will be unique. The aim of this essay is to provide an insight into what is possible regarding refurbishment and post occupancy. Good practice guidance contains many different areas which relate to business practice especially in the property sector.
Planning for refurbishment
This area is key to the success of any property implementation program. The object of this phase is to secure the activity commitment of senior management to continuous improvement of quality and determine the most appropriate means of implementing quality improvement within organisation as well as develop a detailed plan to guide the implementation of the properties. According to Deming’s 14 points to quality, CQI will work only if the company management is committed to it and without the commitment from the top TQM will fall. Gaining the support and commitment of senior management is not easy and is one of the major reasons of the failure of a Property refurbishment Program. The go-ahead to implement a program may be relatively easy to attain. It is the personal commitment and involvement from every manager that is difficult. Gaining this commitment required persuasion, practical examples, reports on the benefit of a property refurbishment program, and continuous effort. Any and every means possible should be used. These may include
– Estimate of the cost of non-conformance. This demonstrates the cost of not committing to Continuous Improvement.
– Obtain customer input on current performance and how well their requirements are being met. – Describe accounts of other companies experience and the benefits they have realized.
Activities which generate high quality costs are either not satisfying customer needs or not working efficiently are often the case in refurbishment projects. It is therefore essential that the refurbishment program identifies the magnitude of quality costs and where they occur. (Ball, 1999)
Corporate business (LNR) is a very crucial and an important aspect for the office industry in the UK market as figures reveal in the Mintel report. Considering the fact and figures, the corporate business is vital for the company. It’s a long-term permanent business with a minimum 1 year of contract; secondly, it generates the large share of revenue.
Visibility
Visibility is the most important factor any business should consider before selecting a particular location for you business. Restaurant s location is as important as the food it serves. Management of the company should consider all factors before selecting a new location to relocate their offices. Many suggest that they should try to find the location near the commercial area or office towers. The new location should be easily accessible for the people and the suppliers and it can be easily reached by walk or drive. The new site should avoid facing another office because it may mislead the customers to enter the wrong place when they want to come to your office. The new location they are going to select should be in the convenient zone, the transportation tool and pedestrian can pass it conveniently. They also need to consider the nearby parking lot has enough space for your customer s vehicles. They should also consider the location in well known dining area, location near the street corner and the street name should be well known, because everybody will know when they pass by it no matter car driver or pedestrian. In a nutshell we can say that the management should say that they the location they are going to select should be convenient, in well known area, easily accessible, in the busy area, and enough parking space. The decision where to locate is based on many different types of information and inputs. There are different models and techniques available which will help organization to organize site information and that can be used as starting point for comparing different locations. The majority of customers who will visit this location will be employees working in this area, so we can relocate offices in Central as this will mainly attract the local employees. We can also change the points or weight slightly for those factors about which there is some doubt, as we can analyze the sensitivity of the decision, for instance if we change the scores for labour availability it can change the decision. So, finally with the help of factor-rating method we can select the best location for company operations. Conclusion Studies show that we should never underestimate the location factor. Every organization knows that good location is the heart of the business. A good location will help the organization to achieve their main goals, such as profit maximization, customers and stay above their competitors. Good location will attract more customers. So In a nutshell we can say that no organization can survive and cannot be successful if they do not have good location for their business. As with any tragic scenario, people live and learn to achieve better concepts to bring a brighter tomorrow. Better building concepts for future and existing high-rise buildings will require more stringent fire codes, non-combustible materials at interior cores, and implementation of a universal communication system amongst first responders to ensure the safety of building occupants.
Technical matters
As real estate global markets generally started a declining stage in 2007 the same can be said in the real estate market in UK. In 2007, UK’s real market was characterized by offices not selling for long periods of time, larger quantity in supply and the start of decreases in prices. Based on Arco Vara’s analysis the third quarter of 2007 indicates that 24% fewer real estate transactions were completed compared to the same quarter in 2006. The average decrease in price was approximately 3% in value. The decrease in value in British markets is something new since property values in 2005 grew by 30% and in 2006 by 44%. Due to the current oversupply there is less development and the market has become more favourable for property owners that rent since there have been increases in the rental markets. Old town property is usually the most expensive in every European city. The office market in the UK for 2007 accounted for more building permits than in 2006. In 2007 total building permits accounted for 195,000 square meters and the amount for 2006 was 140,000. Due to the residential slowdown many developers have moved from the residential market to the commercial market. Due to great demand of office premises rental prices of office premises in new commercial buildings at the end of 2006 and in 2007 have increased approximately 10-15%. The city centre is characterized for having 0% vacancy and rents may go up to 20 pounds per month. The slowdown of the real estate market has created a tenant s market since developers are paying more attention to tenants needs and what needs tenants have for their office spaces. Office buildings are still of great interest to large foreign investment companies and real estate funds in UK. The majority of offices and warehouses being built in UK are for private use or are owner occupied. Recently there has not been a vast change in the industrial market when comparing it to the residential or office/retail market. The biggest difference compared to other type of properties is that there is not much speculation for this market and usually the construction of industrial property is occupied by private users. Furthermore, the majority of properties are constructed on the outskirts of London. Based on information from Blundell’s Real Estate the most demanded sizes are 300-700 square meters and 1,000 to 1,500 square meters. Retail The largest growth occurred in UK prior to 2004, when large offices were constructed. Demand however has been increasing in the retail sector compared to the office market. The UK Statistics Board indicates that the retail sale of retail goods by retail companies at constant prices in June 2007 increased 16% compared to June 2006. The office market in UK is dominated by shopping centres, hypermarkets and supermarkets. There are some land plots available near the port area of Portsmouth, and also around the crossing of Southampton. Both of these crossing areas are former industrial areas. Additionally there are other land plots with old buildings that can be taken into account for demolition. Prices of commercial land have reached the highest levels in the centre of the city. There still is some potential for the land market in UK especially for the industrial and commercial use. Prices in land have been recently stable.
Refurbishment quality awareness
A property refurbishment program relies on the complete commitment of all employees.
Communication: a constant flow of information is necessary, describing progress made by the property refurbishment program, how and when it will be completed:
Recognition: A system to recognize and publicly reward those who make an outstanding contribution to property refurbishment can play an important part in encouraging employee commitment.
Measurement of performance: It is only possible to focus on improving performance if the current performance of processes is measured. Improvement goals can then be targeted and improvement monitored. Prevention Business has traditionally relied upon checking output of errors and then correcting them; this is very inefficient way to run a business. The cornerstone of Quality Improvement is the recognition that errors are not inevitable they can be prevented. Action is necessary to ensure any problems which prevent quality improvement are identified and corrective actions implemented to eliminate them. A system is required to achieve this on an on-going basis. In K. Ishikawa view inspection does not add value to products; it only sorts out the bad ones.
Refurbishment
There are some large refurbishment projects to be carried out by state own company, and it also creates some problem. Some buildings have been operated in three or four years gone down their quality seriously, for example the elevator did not operate smoothly, some damages in kitchen or toilet. And the cost for repairing this damage is unpredictable. Therefore, it creates the needs to make higher housing quality for the organisation and construction companies play a vital role in this process. Total quality management especially continuous quality improvement has been successfully applied by property industries in London as well as whole world. That is the way to ensure the high quality of products. Real estate is a strange phenomenon and is a new industry in London, but it attracts many attentions of society and affects to all members of society. The products of real estate may be the office or house for renting or selling. At the present the housing quality is very low. To determine the chances and opportunities in proper refurbishment it is important to present Alpha model of implementation CQI and the sub objective will be. The construction company will apply continuous quality improvement. The management of the company who are proposing refurbishment will propose a model for implementing CQI in construction company by composing the change and opportunities of applying CQI in construction company and the Alpha model.
Business elements of refurbishment
Multiple finance and accounting automated information systems have been used to maintain identical financial functions and processes in property refurbishment. Considerable cost has been incurred for the last two decades as a result of government agencies not optimizing resources. The Defense Departmental Reporting System-Budgetary (DDRS-B) should be used by the Defense Information Systems Agency (DISA) to reengineer and consolidate existing processes into a standard departmental reporting system that will reduce these costs. DDRS-B supports the DoD need for a single financial management system that standardizes financial reporting. Current systems are unable to recognize standard codes and data such as financial report formats and system interfaces. The implementation of the DDRS-B will enhance electronically generated reports and improve operational efficiencies in the refurbishment environment.
The costs incurred to implement and operate the functions being improved will reduce overall cost by approximately 10 percent. The existing infrastructure consists of data processing systems that are outdated and do not employ the latest in technology. The costs consist of investment, labour, development, operating, and support. The investment and operations have been compared to consolidate the DDRS-B systems present and future costs such as hardware maintenance, software maintenance, and site operations. In addition, the associated estimate costs to improve refurbishment and reduce overall cost is preferred (DFAS ePortal, personal communication). There are several project management practices that should be considered in the DISA DDRS-B refurbishment project plan. They consist of a work plan, scope, management, risk, quality, and communication. Each of these project management processes is used to assemble resources to achieve good results in refurbishment. The work plan provides the step-by-step instructions needed to complete the refurbishment project. (Baldry, 1998)
Two project management practices that are most beneficial to the implementation of DDRS-B for DISA are communication and quality. Communication between the DISA and the DFAS is necessary in order to implement accurate beginning balances that are needed to produce timely refurbishment statistics. The current communication that exists between the agencies is inadequate and it reflects in the monthly reports being generated by a legacy system. This is due to the different methodology and techniques used by the constructors at the DISA. The quality project management practice should be used when producing the monthly, quarterly, and annual figures. Receiving the data in a timely manner with accurate values will be beneficial to both the DFAS and the DISA.
The Change Management refurbishment Plan involves making changes to the project’s original scope. It usually requires redefining current objectives and identifying new project deliverables. The chance of change occurring on the DDRS-B for DISA project would happen in late January right before the completion due date. For example, it would have to be obvious to the project team and management that the conversion of DISA Refurbishment data to the standardized system could not be completed in time. A system change request with details of the problem will have to be completed signed, and provided to the project management office. Afterwards, the project team will have to wait for guidance that will be given by management and the contractor for DDRS-B. The key learning points that apply to the refurbishment plan are identification, analysis of project risk, and response. The project manager should determine risk that might affect the conversion of data to the standardized system. The project team can review the impact of risk identified and try to alleviate the risk. By minimizing the risks the project team can complete the conversion of data, in a timely and sufficient manner.
Post occupancy
A communication plan outlines the roles and responsibilities associated with the project in the review and approval process, events, and milestones. The plan is designed to provide pertinent, precise, and dependable information at all times including during post occupancy. It should also be flexible enough to accommodate change as a project evolves. Weekly teleconferences between the project team members and project management contractors will be held to ensure that the times and dates for completing the project are on schedule. DFAS and DISA management will be included on e-mails and memos concerning updates to the project. Travel to the DISA will be required to train and provide passwords to the field site contractors. The final completion of the refurbishment project will be communicated through a memo written by DFAS to the DISA customer. The time needed to implement this project plan will take six weeks. The first week of the project will start with the selection of project team members and assigning specific task to individuals involved in the project. The second week consists of meetings in London to discuss the system and information needed from DISA.
Managers communicate with their supervisors and hold regular staff meetings with their departments. Open communication is usually encouraged between managers and their staff. What are the organizational values? The values that are most often seen in practice are professionalism, integrity and honesty. Tribune management enforces these values. An employee who crosses the line is disciplined immediately and will be terminated if management determines that it is necessary. This will allow us to better understand how the current process of communication and project management leadership are achieved. Communication shifts from a top down directive to bi-directional dialog among all members of the various subsidiaries. Now that we know how communication flows within the organization, we can now state how Project Managers are chosen for various projects that are performed internally. (Leaman, 1995)
Company executives approve a project and its implementation. A project manager is selected since there is no Project Management Department, a manager from one of the departments involved/affected by this project will be selected and prepared with the necessary training and with the appropriate project management tools. This phase will take some time mostly because of the training and preparation of the manager. Selection of all the other team members will also take place almost simultaneously. Upon completion, this information will be communicated to all team members.
Post occupancy may also require some repairs. Simple repairs may be done by individuals in their properties either by themselves or by companies that provide such services. The land register is public and everyone is entitled to access the registered information. In order to complete a transaction the real estate must be registered in the Land Register. This means that the property itself and the land are owned. All transactions with registered immovable property shall be formalized at a notary. A movable residential property is one that where the land where the property lies is not entered in the land register. Pledge over of a movable property is established by concluding a notarized pledge agreement. The repairs need to go through the company as a matter of law. Leasing and Renting Real Estate Based on European acts it is known that the lessee does not have to do anything else than pay rent and shall not damage the owner s property. The owner s obligations include suitable living conditions and if any repairs are necessary to be made in order to provide that suitable conditions. If there were a dispute between a lessor and lessee both parties may go to a lease committee or court. The following information should be included in a commercial/residential lease contract: Description of the property Rental fees and when will rent be paid The procedure for the calculation and payment of public utility charges Term of contract where it is also included what procedure will be taken for early termination and termination in general Obligations and rights of a commercial lesser, lessee, or commercial sublease Procedure for the coordination of amendments and their potential compensation If the rented office includes furnishings the obligation for its care All the questions related to the rental will receive an answer from the Law of Obligations Act. Rent Control UK abolished national rent control through the Housing Act of 1992 however it should be noted that the Law of Obligations forbids excessive rents, which are defined as those where unreasonable benefit is received from the lease of the dwelling, except in the case of a luxury apartment or office. Rental increases are legal however they need to be stated in the leasing contract, the leasing contract must be for at least three years, rent may not increase more than once a year and the increase needs to be precisely described. Regarding deposits after the termination of a lease the landlord would return the deposit inclusive of the interest gain. Contract periods can be freely agreed between landlord and tenant. Specified term contracts can default to unspecified term contracts, in which tenant eviction is difficult. The cases where a specified term contract becomes an unspecified term contract are: Contracts for more than one year, and not in writing, are automatically unspecified term contracts. The lease contract becomes an unspecified term contract if the lessee continues to use the dwelling after the expiry of the contract, unless either landlord or tenant expresses some other intention to the other party within two weeks. The contract becomes an unspecified term contract at expiry, if a residential lease contract is for more than two years, unless one party gives two months notice before the end of the term that he does not want to extend the contract. A tenant with the consent of a landlord may sublease part of the office to another tenant however the tenant is responsible for any actions of the sub lessee. The eviction process in UK may be lengthy. A landlord may initiate an eviction order in court if the tenant has not paid rent for more than three months. If the tenant however, does pay part of the rent the court will cancel the eviction order.
Planning
The Project Manger will plan a meeting schedule for the team to start meeting. Communication, participation and cooperation will be a requirement for all team members. These meetings will be scheduled every two weeks and weekly or as often as needed as the actual project implementation gets closer. (Rooke, 2005)
Analysis
All team members will have the opportunity to provide and collect all necessary information from their own areas, as well as other departments or individuals that might be affected by the implementation of this refurbishment project, for example: equipment, training, personnel, a realistic time frame, etc. Because of all the data that needs to be collected from different departments and/or individuals, a longer period of time will be allocated to this task.
Design
All team members will have the opportunity to participate in creating the implementation design. To ensure everyone participation and support, we will use the Nominal Group Technique or NGT which is approved for refurbishment projects. This four-step process provides the opportunity for everyone in the team to become involved and it helps in obtaining a solution in a short period of time. In addition to that, participants get a feeling of ownership and therefore are more supportive. This is very important and allows for a smoother implementation process, which leads to a more desirable outcome. (Rooke, 2005)
Implementation
Once the team has created the design, it will create the implementation timelines. The team will create this schedule with input not only from team members but also from individuals from any area (department or unit) that might be affected or involved with the implementation of the new project. Time lines will be as realistic as possible but making every effort to deliver the project when promised without compromising the quality.
Evaluation
As part of the evaluation process, the team will measure the success of the project at different phases. We will use the Organizational Communication Model or OCM (Perlman, 1996.) as described and charted on the solutions/ideal state portion of this paper. Follow-up – after receiving the first evaluations, the team will have two options: 1) continue to meet on as needed basis to assess progress from different areas or, 2) form a subgroup comprised of some of the team members that will continue to meet to assess progress or address any unfinished business. As with all project implementations, time is of the essence.
Management
Business management is important for the refurbishment project. There are different opinions regarding the importance of management and properties nowadays. There are two main approaches: The centric approach or realism that sees the organizations in properties (non state actors-called usually by the economists) without relevant importance. In their opinion the states are the real engine that runs the world economy. To contradict this, some external information has been found that while intergovernmental organisations such as UN. Organisations are important and from Morgan (1990 cited Mullins 1993) point of view, organisations are defined in eight different ways: as machines that need to operate efficient, organisms that need to adapt as any living system, brains with their capacity to innovate, cultures as set of values, political systems as it need to order and direct people, psychic prisons and instruments of domination (1). What Morgan wants to point out is the complex role of the organisations and their power to manipulate and change, control and compete in a dynamic environment. The lack of importance of organisations is controversial. That is why there is the pluralism approach who considers that all types of actors have a complementary effect on world economy. A fundamental part of organisations are the managers and their different roles within an organisation. This interdependence between individuals and organisations is seen also by Rawlinson (1998) as a tool of management that develops people to reach objectives and achieve results. Another point of view comes from lord Sieff (formerly chairman and chief executive of M&S) that say that the promotion of good human relation at work and efficient management are two aspects of the same thing? All these points of view are highlighting the importance of the group, values, and norms, the psychological aspect that can determinate the motivation of each individual working in properties. But what about the managerial perspective regarding the organisation and its external factors?
Post-occupancy evaluation would involve effective BCM management which would help the organisation in the identification of their key products and services on offer and the potential threats that these face. An important element in BCM is planning and exercising techniques which typically minimise the effects of any potential catastrophe. An effective BCM scheme helps to promptly resume any temporarily loss of service and thus helps to protect market share and reputation. For example electricity may be cut and the BCM scheme will come into effect. For success to be achieved, BCM must be considered to be vital part of a business’ normal day to day process. To go about this is pivotal as it disseminates the crucial role that BCM plays in an organisation. The involvement of senior management is also important to the success and implementation of a BCM scheme since the influence of top level management regarding the allocation of resources. During post occupancy effective BCM requires full and effective use of incident management and business continuity plans though these can be mixed into a single plan. Incident management plans will allow an organisation to handle the initial effect of a crisis, for instance this could be the property catching fire. The second plan acts as a recovery device of products and services that the BIA pinpointed.
The company may employ tactics which relate to generic and specific techniques which may end up being required. A generic plan acts as a core plan. Through this plan the organisation will be responsive to a number possibilities giving rise to a number of elements in response to an incident. These elements would include issues such as command and accessibility to financial resources etc.
Any Plan no matter how widespread cannot be considered to be reliable until they have been rehearsed and it has been proved that they are practical.
Future
As the nature of this refurbishment project is narrowly focused but well defined, there is scope for further investigation and research into the wider issues of refurbishment strategies and how it interrelates with other “Marketing functions” and “Business strategy”. Value can be added to the research area through further research of year on year comparisons of the primary and secondary data collected. This would enable the company to identify trends and asses the efficiency and effectiveness of their marketing strategies in enhancing the market share of occupancy from their office business on a yearly basis. From a strategic point of view this would help the company to evaluate changes to their refurbishment strategy so that they can remain focused.