Assignment 4: Data Tech, Inc. Case Study BUS 515
August 31, 2012

In the real world of facility management (FM), an overabundance of activities fall under

the facility manager’s responsibility, causing common lapses into a rash mode in order to

respond to all the requests, orders, regulations, deadlines and demands of the organization.

Facility managers know that the need to become more proactive and strategic is important, but

finding the point in time to dedicate to strategic planning is often a struggle. Strategic facility

planning recognizes that every decision made in business planning has a direct impact on an

organization’s real estate assets and needs. The purpose of the SFP plan, therefore, is to develop

a flexible and implementable plan based on the specific and unique considerations of the

individual business.

The company of Data Tech, Inc was started by Jeff Styles. Data Tech is a business that transfers hard copies of documents, such as invoices, bills, or mailing lists, onto CDs (John Wiley & Sons, Inc. 2010). As other companies move to a paperless environment, the placing of data on CDs was the wave of the future. Jeff had started the company in his two-car garage three years earlier by purchasing the essential software and signing of two large corporations as his first customers. At this point, he was about to sign on two additional corporate customers. All of a sudden what was a small garage operation was turning into a major business. Data Tech can capture market share with space to expand as companies look to become more eco-friendly. The Business operation of Data Tech, Inc. seem as a functional and simply deceptively operation. But its operation grew enormously every day, and that Data Tech received packages of mail from corporate customers containing documents they want transferred to disc. Data Tech usually receives anywhere from 10,000 to 30,000 pieces of mail per day that require to be processed. The first step requires workers to unpack and sort the mail received. Next, workers scan each item through one of two scanning machines that transfer content to disc. An accuracy check is then made to ensure that information was transferred correctly. This stage is particularly important as many of the documents contain important private information. Finally, the discs and the documents are packaged and sent back to the customer, with Data Tech keeping a backup disc for its records. The need for capacity and relocation was in great demand of its growing operation. So running a full-time business out of his two-car garage was a challenge for Jeff Styles. Jeff has exhausted a great deal of time ensuring that the operation of Data Tech runs smoothly without any bottlenecks. He has been successful, and his two original customers have just signed long-term contracts with him. In addition, he has acquired two additional customers. This means that Data Tech needs to move to a larger facility that might accommodate the larger size of the business. Jeff has narrowed his search to three potential locations, which was identified the factors that are important to him and rated each location considering a number of criteria. Some factors are especially important, such as proximity to the postal service that delivers the daily packages. Another is closeness to the airport, as Jeff frequently travels to customer locations. A factor that is particularly troubling for Jeff is the issue of capacity. Two of the locations he is considering are larger than he currently needs and offer excess growth capacity. The third location would meet current capacity needs but would not suggest sufficient room for expansion. He doesn't know which a better strategy is. In his list of factor weights Jeff has made spaces for both capacity options, giving himself some time to think about the issues.

The information that Jeff has compiled is shown in the table. | | | | | Factor Score at Each Location | Factor | Factor Weight | #1 | #2 | #3 | Proximity to airport | 20 | 3 | 4 | 4 | Proximity to postal service | 30 | 4 | 2 | 5 | Facility with excess capacity | ? | 4 | 5 | 0 | Facility with potential for expansion | ? | 0 | 1 | 5 | Close to business community | 10 | 5 | 4 | 4 | Pleasant environment | 10 | 3 | 4 | 4 | | | | | | | | To expand large or small, was the deterging factor of Jeff, and was not sure how to evaluate whether he should focus on moving into a larger facility now or moving into a smaller facility with potential for expansion. He has estimated the following chances for demand: | • | The likelihood of demand being high is 0.70. | | • | The likelihood of demand being low is 0.30. | |
He also estimated profitability for each alternative: | • | Moving into a large facility has a profitability of either $1,000,000 or $600,000, depending on whether demand turns out to be high or low. | | • | Moving into a small facility has a profitability of $500,000, assuming that demand is low. | | • | Moving into a small facility would require considering expanding if demand turned high. If Data Tech decided to expand at that point, profitability would be $800,000. If it did not expand further, the profitability would be $500,000. | |

Closing
Companies are looking for ways to save money and going green saves money. For example, employees are notorious for wasting paper. When a company goes green they are saving the company money and saving more trees. That is great from a business stand point and an environment stand point because trees produce oxygen. Jeff business Data Tech outgrew his garage in three years because placing data on CDs is the wave of the future (John Wiley & Sons, Inc 2010). Jeff has started making smart decisions by making sure that his new location is close to the airport and the post office. Now he needs to end his search by moving into a larger location immediately. If Jeff chooses to move to a location with the potential for expansion he loses time twice, once with the move and then again by expanding. Jeff is uncertain which decision he should make but he has experienced great growth in a short amount of time. Moving into a larger facility now is the best way to keep the flow and momentum of his business. The downtime from moving and then expanding is too risky, especially since Data Tech just signed two additional corporate customers. Strategic facility planning (SFP) is a process that can lead to better, more proactive delivery of services from a facility management organization to its stakeholders. The time taken to carry out SFP is well spent in that it helps to avoid mistakes, delays, disappointments and customer dissatisfaction. It can actually allow facility plan implementations to run more quickly and smoothly. The SFP identifies the type, quantity and location of spaces required to fully support the organization’s business initiatives and should be framed within the organization’s vision. The SFP includes three primary components: an understanding of the organization’s culture and core values and an analysis of how existing and new facilities must manifest that culture and core values within the physical space or support their change, an in-depth analysis of existing facilities—including location, capability, utilization and condition; and an achievable and affordable (approved) plan that translates the goals of the business plan into an appropriate facility response. To ensure new facility projects are business-driven and further the overall mission of the company, it is critical that the first component—the in-depth analysis—precedes the second.

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References

A White Paper on Strategic Facility Planning © 2009 | International Facility Management

Association
Leong, Kien: A Simple Truth About Capacity Planning © 2010

http://www.wiley.com/legacy/annual_reports/ar_2010/vision.html (John Wiley & Sons, Inc 2010)