Cost cutting? Let the pros do it.

Brevard county public schools has taken a unique approach to cost cutting. They
let the professionals do the cutting. This elite group did research, ran experiments,
completed tests, and reported their successes and failures to management. They presented
both written and oral reports. This group designed 28 cost cutting projects. Estimates of
total savings range from $200,000 to $1,000,000 over the next few years.

Was this group a team from one of the big accounting firms? Were they from one
of the big consulating companies? Perhaps they were from one of the best engineering
firms. No, no, and no, none of the above! These cost cutting teams were made up of
county public school employees; tradespeople, janitors, painters, grounds people, team
leaders and supervisors.

This is a story about cost cutting by the people who maintain your buildings,
clean your floors, and keep your grounds neat. You can follow their example and involve
your workers in cost cutting.

The first step is to decide to cut costs using your tradespeople. As you can
imagine high level people have to sign off on a project of this type. At Brevard Stephen
Muzzy, Director of Plant Operations and Maintenance had to get the support of Ed Curry,
Assistant Superintendent of Facility Services to embark on the cost reduction effort
(called CARE, cost analysis and reduction effort).

See if the logic for this program is as obvious to you as it was to them. Their
workers were in every building every day. They saw the waste such as the water leaks,
cleaning up the same messes of paper towels, and replacing the same doors over and
over. This program was designed to empower them with training, resources, time to
solve a problem, and real say so, to fix something that has bugged them (maybe for
years).
 Brevard's Mr. Muzzy hired Joel Levitt, President of Springfield Resources to
design and facilitate the effort. Mr. Levitt is a long time maintenance consultant and
trainer. Previously, Mr. Levitt trained the entire Brevard County Public School's
maintenance leadership in management of maintenance.

How they got started

Mr. Levitt met with the entire maintenance work force in groups of about 30. On
the first meeting Mr. Levitt taught the concepts of cost avoidance, life cycle costing, and
calculating return on investment. The workers formed teams (they chose the people that
they wanted to work with). Each team was assigned a management coach. The coach
helped the team with logistics and resources.

What happened next

Each team brainstormed a list of possible projects then choose a cost reduction
project that appealed to them. The project was written up by the team and approved by
the team's coach. The criteria for approval of the project was: they had to be able to show
results in 3 weeks, they had to be inexpensive (require less than $500) and the project had
to give a positive return on investment, improve safety or improve the ability of the
teachers to teach.

The teams worked on their own for three weeks. In a subsequent meeting Mr.
Levitt taught the teams about both written and oral presentation skills. In the finale each
of the 28 teams presented a written and an oral report about their project.

The results

The presentations were given over 2 days. Each of the teams came up with a
project. Many projects were successes in that they saved money, improved safety or
improved the teaching environment. Some projects were successes in that they failed!
The failures improved the knowledge of the department about materials or techniques
that don't work..
And the winner is...

The management team with the consultant chose the three best projects and gave
them a gold, silver or bronze star. The winners had low investment, quick return of
invested money, high return on investment, and were easy to complete. No monetary
rewards were given out. The only incentive was the ability to work on a project and solve
a real problem and the management recognition for the quality of the effort.

How much it cost

Consulting costs: $20,000

Presentation of sessions including all travel expenses, development of

customized training materials, duplication costs, follow-up
consultation to help define and prioritize projects, write-ups, other
support

Time in class 150 people * 8 hours @$25/ hour $30,000

Time on project outside of class estimated average of 2 hours per $ 7500

person.

Total 300 hrs @ $25/ hour

Materials for projects average estimate $90./group $ 2500

Management time to set-up, coach groups, rewrite projects, review $10,000

outcomes, meetings estimate 200 hours @$50/ hour

Total cost for project $70,000

Pitfalls

Not every organization should undertake an effort of this type. Some of the attitudes
needed for success are:

1. Commitment to follow through on at least 50% or more of the projects if the

engineering and economics work (the benefit to morale when a project is put in place
cannot be over emphasized).

2. Can commit the minimum resources to the effort including time off from regular duties
to work on projects, money to purchase experimental materials, management/staff
coaching time.

3. Can allow flexibility in purchasing non-standard items from new vendors on a rush
basis.

4. Can allow people to cross functional and trade lines and can encourage workers to talk
directly to the appropriate experts in the accounting, purchasing, legal, and engineering
departments .

Cost cutting is everyone's job. Many of us are too busy to spend the kind of time
on the details required for cost reduction even if we had the expertise. The tradespeople,
painters, grounds keepers, janitors know our facility better then anyone. Many of them
are frustrated by the waste but have given-up on trying to improve it. Considering this
avenue of reducing costs because the cost reduction will improve your competiveness and
the program will improve your morale.

SIDEBAR (pick as many as you want)

Sample projects

The 28 projects were presented by the teams Oct 1,2 1996. When implemented,
these projects represent savings to the district of over $300,000 to $1,000,000 over the
next few years.

Gold  Effect on electric consumption of increasing the set point of a school

from 75.5° to 77° F. The school wide set point in the Jupiter school was raised from 75.5°
to 77°. No complaints about temperature were registered. The electricity usage dropped
by 10% resulting in a $7000 year savings per school with an immediate total approaching
$315,000 (45 schools on DDC controls) for the district. Additional recommendations for
savings from new thermostats in modular units. Gold star because there is little
investment, large potential (real-measurable) savings, and immediate returns.

Silver  Impact of the use of stabilizer on the consumption of chlorine in the

pools. The team added $225 of stabilizer to a pool. They charted chlorine usage for 1
week before and 1 week after stabilizer was added. Chlorine usage in the test pool
dropped by $80 per week. Potential savings is $4000 per year per pool. Silver star is
awarded because investment is small, payback is large, immediate and real. This
technique can easily be applied to all district pools where stabilizer is not being used.

Bronze  Impact of Ever-pure filter system to prevent corrosion failure in

kitchen boilers. The manufacturer increases the warrantee from 1 to 7 years if an Ever-
pure filter is installed. Installation parts and labor are about $550. Current failure rates of
1 liner every 2 years will result in a savings of about $2684 in 7 years for each unit. 14
proposed Viking units would yield $37,500 in avoided maintenance costs over the 7 year
warrantee. In addition there are over 50 boilers of other makes and models with equally
high failure rates. The filter might help generate an additional savings of $134,200. This
project was chosen because of the ease of the savings (from a warrantee), the real
reduction in labor and the high cost of parts. If the technology proves to be effective the
project can also be expanded to all the boilers in the district.

Compare circulating pumps. Project compares an existing cast Iron circulating pump to
a smaller and lighter stainless steel pump. The smaller pump has been in use in the
district for 7 years. Analysis of replacement cost, reliability, energy usage, complexity of
installation shows that the smaller stainless pump is clearly superior. It costs $150 less to
purchase, is more reliable, uses about $7/yr less electricity. Recommendation: replace all
circulating pumps with the stainless one as they fail.

Impact of relamping and cleaning fixtures on light output and electric usage. In a
classroom where there were lighting complaints (room 12, Croton) the team replaced the
tubes (with efficient ones), ballasts (with magnetic ones) and cleaned the fixtures. The
candle power at desk level increased from 12.5 to 56.8 (standard is 60). The amp
consumption at the breaker went from 14 to 8. Total cost was $305 including labor at
$25/hr. Electric savings $220/year. Several ballasts were leaking and were hazardous.
Recommendation: create an annual campaign where each school choose its worst 2-3
rooms for lighting. Teams will then re-lamp, re-ballast, clean fixtures. Based on the other
relamping project high efficiency ballasts and utility rebates should be looked into.

© 2005 Joel Levitt, President Springfield Resources JDL@Maintrainer.com