May 29, 2015
Calculating Your Facility Condition Index: Should You Or Shouldn’t You?
If you are a facility manager - particularly one who is responsible for government-owned property (such as a school system or housing authority) - you have probably heard of (or maybe even used) the facility condition index (FCI). If this phrase is new to you, if you want to learn more about it, or if you are wondering what the benefits of this "tool" are, keep reading, as we will answer these very questions in this week"s blog post.
What is the Facility Condition Index?
Simply put, the Facility Condition Index is a benchmark that facility managers utilize to compare and contrast the condition of one facility against another facility or group of properties, in an effort to gauge the current and future condition of a building. From a mathematical standpoint, the FCI is calculated by looking at the ratio of the required renewal cost of the current year to the current building replacement value.
If a facility manager does not have other, similar properties to compare the building to, you may consider comparing the current FCI to a past FCI as a benchmark to determine if the property is in worse shape now than it was a few years ago.
There are many reasons why a reliability manager might want to use the Facility Condition Index as a key performance indicator (KPI). Perhaps one of the most important reasons involves resource and budget allocation. If you are responsible for a group of buildings, you will no doubt have a limited budget and need to identify which buildings need to be prioritized. Using the FCI score is one indicator you can use to assign priority amongst your properties.
Despite our best efforts, sometimes it is impossible to avoid deferring maintenance in a facility. This could occur for any number of reasons - budgetary concerns, staffing issues, or a backlog of work due to breakdowns or maintenance failures. The FCI benchmark can help in this arena, too, as you can use it to help calculate reinvestment rates aimed at preventing future deferred maintenance. This calculation of "catch-up costs" can help you get the funding you need to bring your facility back up to current maintenance schedules.
As mentioned above, you can compare a facility"s current condition to its past condition(s). This provides a means of tracking and identifying the degree of property degradation over time and is a good tool to help predict future condition changes. With this information on hand, you can plan appropriately for any predicted issues that may increase budget or maintenance schedules.
Finally, the Facility Condition Index can be used in reporting to senior management to justify budget and staffing needs, to show work performed, and, ultimately, to show how well you have performed your job. It can also be used in the event that a new property or location is needed, as the cost of continued operation at the current location is no longer manageable.
FCI is calculated on a scale that ranges from 0-30%+. The FCI can be "Good" (0-5%), "Fair" (5-10%), "Poor" (10-30%), or "Critical" (30% or greater).