Richard J Kirkham Rethinking the Whole Life Cycle Cost process Rethinking Whole Life Cycle Cost based decision- making Dr Richard John Kirkham Liverpool

Richard J KirkhamRethinking the Whole Life Cycle Cost process

Rethinking Whole Life Rethinking Whole Life Cycle Cost based decision-Cycle Cost based decision-makingmaking

Dr Richard John KirkhamDr Richard John KirkhamLiverpool John Moores University School of Liverpool John Moores University School of the Built Environment, formerly of Cranfield the Built Environment, formerly of Cranfield UniversityUniversity


Oh no…not whole life Oh no…not whole life costing again!costing again!

Mention whole life costing to many Mention whole life costing to many industry professionals at your peril….industry professionals at your peril….

…….but why…..but why….

* !! *! ?


……so why is it still with us so why is it still with us then…then…

• Because the Deputy Prime Minister says so! Because the Deputy Prime Minister says so!

• Can help LA’s comply with Best Value/SustainabilityCan help LA’s comply with Best Value/Sustainability

• PFI bids require WLC analysis PFI bids require WLC analysis

• The NHS has embraced WLC as part of Procure 21The NHS has embraced WLC as part of Procure 21

• But WLC has always been with us in various guisesBut WLC has always been with us in various guises

• Clients are beginning to question the long term Clients are beginning to question the long term costs of design solutions – WLC gives them the costs of design solutions – WLC gives them the answers!answers!


……perceived problems with perceived problems with whole life cycle costing…whole life cycle costing…

• too much too much uncertaintyuncertainty

• too much too much datadata required required

• what about what about service life prediction – calculating service life prediction – calculating the study period?the study period?

• too costly and time consumingtoo costly and time consuming

• but moreover... but moreover... COMPLEXITYCOMPLEXITY


……but in reality, these are but in reality, these are not the real problems…not the real problems…• WLC should, by nature, be a bespoke process (a contentious WLC should, by nature, be a bespoke process (a contentious point however given the attempts to standardise in point however given the attempts to standardise in ISO15686!!ISO15686!!))

• The sums are no different, it still requires PV calculations and The sums are no different, it still requires PV calculations and Discount Rates, NVP, IRR etc like it did in the 1970s Discount Rates, NVP, IRR etc like it did in the 1970s “Terotechnology” era“Terotechnology” era

• OK – the probabilistic approach throws up a few problems for OK – the probabilistic approach throws up a few problems for “stats-haters”, like interpreting PDFs and CDFs CIs etc“stats-haters”, like interpreting PDFs and CDFs CIs etc

• BUT…the real problem lies in the BUT…the real problem lies in the METHODOLOGICALMETHODOLOGICAL approach to WLC, approach to WLC, there just isn’t a good one!!there just isn’t a good one!!


……OK, but like I told you, OK, but like I told you, its too complex…its too complex…

• no standard “off the shelf” methodologyno standard “off the shelf” methodology

• where do we start?where do we start?

• what do we do with the information?what do we do with the information?

• how do we interpret the results?how do we interpret the results?

• do we need to employ a mathematician from do we need to employ a mathematician from NASA to do the sums?NASA to do the sums?


……this is - The traditional WLC this is - The traditional WLC model…model…

Building Design

Solution A

Building Design

Solution B

Building Design

Solution C

Whole Life Cycle Cost

Model

Select solution based on WLCC

results

Proceed to construction and operational phases

Recording of WLCC data and decisions

?……retrospectiveretrospective


The traditional WLC modelThe traditional WLC model

• WLC is not optimisedWLC is not optimised

• Rather, “the lesser of several evils”Rather, “the lesser of several evils”

• Information elicited at early stage (briefing) does not Information elicited at early stage (briefing) does not feed into the detailed design stagefeed into the detailed design stage

• The analysis does not inform the design in any wayThe analysis does not inform the design in any way

• It is therefore seen as an unnecessary “add on”It is therefore seen as an unnecessary “add on”

• In other words, WLC should be dynamic!In other words, WLC should be dynamic!


So…in order to change…So…in order to change…

1.1. We need to think about how designers make We need to think about how designers make decisionsdecisions

2.2. And how we can capture this information in order to And how we can capture this information in order to optimise the WLC decision processoptimise the WLC decision process

AND


……Rethinking the process – a Rethinking the process – a decision map…decision map…

1.1. We looked at various models of decision-making – We looked at various models of decision-making – design process models including:design process models including:

1.1. The RIBA Plan of WorkThe RIBA Plan of Work

2.2. The BAA Guide to Construction ProcessThe BAA Guide to Construction Process

3.3. The Process Protocol (Kagioglou et al 1998)The Process Protocol (Kagioglou et al 1998)

2.2. And the need for briefing and continuous feedback And the need for briefing and continuous feedback identified in Lathamidentified in Latham


……implementing the process map into implementing the process map into the WLC process…the WLC process…

Data captureData capture


……Rethinking Rethinking the process – the process – a decision a decision mapmap

FeasibilityConcept

DesignConstruction

OperationDisposal

Structure

Envelope

Services

Steel, concrete, timber etc.

Cladding, roofing, glazing etc.

Energy, ventilation, communications

Concrete, in-situ, pre-cast, grade etc

Cladding, fixings and joints

Pump, boilers, cabling, pipes, light fittings etc.

Paint type, floor finish, doors, etc.

Finishes

Level 1 Strategic

Level 2 System

Level 3 Detailed

Cost

Functio

n

Mai

ntenan

ce

Enviro

nmen

t

Disposa

l

All Level Considerations


……Capturing the data…Capturing the data…

• In order to manage the process over the 3 stages, a In order to manage the process over the 3 stages, a model is required to handle the datamodel is required to handle the data

• It should replicate the virtual process mapIt should replicate the virtual process map• To enable the seamless transition of decision-To enable the seamless transition of decision-

making through the 3 design stages and 4 “making through the 3 design stages and 4 “life life stagesstages””

• And provide and audit trial of all decisions made, And provide and audit trial of all decisions made, and by whomand by whom

• ……..The LOGBOOK..The LOGBOOK


……managing the knowledge: managing the knowledge: The Logbook…The Logbook…

• A vehicle for implementing the iterative application of WLC A vehicle for implementing the iterative application of WLC from briefing through to final design and constructionfrom briefing through to final design and construction

• A repository for recording the design, capital investment, A repository for recording the design, capital investment, maintenance, operational and decommissioning decision-maintenance, operational and decommissioning decision-making process throughout the whole life of the buildingmaking process throughout the whole life of the building

• Enables continuous performance assessment throughout the Enables continuous performance assessment throughout the operational stage (compare WLC results against real data)operational stage (compare WLC results against real data)

• Additionally, supports a new Environmental Impact Analysis Additionally, supports a new Environmental Impact Analysis assessment to be used in conjunction with the WLC modelassessment to be used in conjunction with the WLC model

• Supports CIBSE Logbooks initiativeSupports CIBSE Logbooks initiative


Logbook

Part 0: Client brief registry

Logbook

Part 1: Design team registry

Logbook

Part 2: Building operator registry

Logbook

Part 3: Decommission

registry

Data sources

WLCC Model

TH

E L

OG

BO

OK

SO

FT

WA

RE

A

PP

LIC

AT

ION

WLCC Results and decisions

Decision information and data recorded at

query stage: Part 1, 2 or 3

1

23

4

5

Logbook


Logbook


Logbook


Logbook


registry

Logbook


Logbook


Logbook


Logbook


registry

Logbook


Logbook


Logbook


Logbook


registry

Data sources

WLCC Model

TH

E L

OG

BO

OK

SO

FT

WA

RE

A

PP

LIC

AT

ION

WLCC Results and decisions

Decision information and data recorded at

query stage: Part 1, 2 or 3

1

23

4

5

The Logbook The Logbook structure…structure…


……The application software…The application software…

Part 0: The Client Brief

Part 0: The Client Brief


Part 1: Design and construction phase

Part 1: Design and construction phase


Part 2: Operational phase

Part 2: Operational phase


Part 3: Decommissioning phase

Part 3: Decommissioning phase


Environmental Impact Analysis

Environmental Impact Analysis


……The benefits of using The The benefits of using The Logbook…Logbook…

• Encourages building developers and owners to think Encourages building developers and owners to think “Whole Life” – this information may eventually be “Whole Life” – this information may eventually be insisted upon by clients, like the Logbook for a car!!insisted upon by clients, like the Logbook for a car!!

• The design WLC can be optimised unlike existing The design WLC can be optimised unlike existing techniquestechniques

• A history of the project, which could prove invaluable A history of the project, which could prove invaluable when submitting bids on similar projects in the futurewhen submitting bids on similar projects in the future

• Facilitates co-ordinated collation of building capital, Facilitates co-ordinated collation of building capital, operational and decommissioning dataoperational and decommissioning data


……and now a message from our and now a message from our sponsors…sponsors…

• Part of EuroLifeForm Part of EuroLifeForm www.eurolifeform.comwww.eurolifeform.com• ““Probabilistic Approach to Life Cycle Cost and Probabilistic Approach to Life Cycle Cost and

performance” EU 5performance” EU 5thth Framework grant Framework grant• Other project partners include: Cranfield University, Other project partners include: Cranfield University,

Building Research Establishment, Taylor Woodrow, Building Research Establishment, Taylor Woodrow, Skanska, Carl Bro, Labein, CIS Ecologica, Labein, Skanska, Carl Bro, Labein, CIS Ecologica, Labein, GEK Athens and the University of PortoGEK Athens and the University of Porto

• Case studiesCase studies on Mid-Yorkshire Hospitals NHS Trusts on Mid-Yorkshire Hospitals NHS Trusts (Wakefield) and St Helens and Knowlsey NHS Trusts (Wakefield) and St Helens and Knowlsey NHS Trusts (Merseyside) PFI bids(Merseyside) PFI bids


Case studies outcomes and a full review of the EuroLifeForm project to be presented Case studies outcomes and a full review of the EuroLifeForm project to be presented at the 1at the 1stst becon conference organised by the University of Liverpool and Liverpool becon conference organised by the University of Liverpool and Liverpool

John Moores University September 2005 John Moores University September 2005

Documents

Richard J Kirkham Rethinking the Whole Life Cycle Cost process Rethinking Whole Life Cycle Cost based decision- making Dr Richard John Kirkham Liverpool