Opportunity: An esteemed private college found itself facing financial pressures caused by increasing operating and labor costs, heightened competition for faculty members, declining student enrollments, and weakening endowment investment returns. Efforts were being made to increase endowment contributions, but competition for students was increasing, and tuitions were already at the high end of their competitive range. It became essential to seek ways to reduce costs, but it was also important not to diminish the services or quality of the institution.
Nearly twenty percent of the college's operating budget was allocated to facilities maintenance. A significant portion of this budget, over $2,000,000 annually, supported the custodial services department, which employed approximately 70 custodians. Although a recent consultant's review indicated that this department was operating effectively, we felt that significant opportunities for performance improvement could still be found. Like many operations at the college, although it was assumed that this department was performing well, little was actually known about its performance or cost-effectiveness. Even a ten percent improvement in productivity would represent annual savings of over $200,000.
Performance Excellence Audit: Examination of department operations, building tours and interviews with customers, custodians and managers identified several shortcomings in process design and performance management:
Operating and Management Process Improvements: Improvements made to the department's performance system included revising work assignments to more fairly allocate work loads, consolidating shifts to better match resource availability with customer needs, and creating teams to eliminate isolated work assignments and provide greater flexibility to meet daily changing cleaning needs. Supervisors were empowered with greater authority to address customer needs. To improve process assurance, measures for deliverables and for key process and performance checkpoints were established, and reports and displays were developed for senior management, process control and performer feedback. Individual performance feedback and goal setting were introduced, and supervisors were trained to provide positive recognition and corrective feedback.
Results: Cleaning quality increased 26%, from a baseline average of slightly under 69% to 87%. Customer satisfaction increased from 83% to 87%. Square feet cleaned per custodian increased 25%, from 16,000 to 20,000 square feet. Overtime hours were reduced 33% below the prior year. Increased productivity enabled staffing reductions from 69 FTE custodians to 48 FTE (through attrition - no layoffs), with resultant salary and benefits savings over $400,000 annually.
April 13, 2008.
Copyright © 2008 Conard Associates, Inc.