Portfolio Planning and Asset Management - Case Studies - Budgeting and Data Assessments

Solus Industries examined the extent of information our client had regarding their roofing portfolio and several areas of concern were identified. Our client sought to learn what roof systems they had on their facilities and the condition of those roof systems, increase roof system life spans, decrease reactive repairs, and obtain justification for yearly budgets.

Problem

Portfolio Overview

Approximately 65% of our client’s roofing portfolio is under the age of 8 years. Approximately 17% of the roofing systems under the age of 8 years have less than 5 serviceable years remaining.

High level of collateral cost associated with water damage

Of the 2,000 facilities, 970 reported having to perform some type of water clean-up; 120 reported having accidents in their facilities due to water leaking; and 256 facilities reported having downtime or loss use of space due to water leaking.

Exceeding budgets with repairs and replacements

Based on their current situation, our client stands to experience a 520% increase in roof replacements between the years of 2009 and 2013

Implementation

Solus Industries employed management techniques to analyze the information gathered from the evaluation and create a workable action plan. Solus evaluated 2,000 facilities, totaling 208,270,393 sq ft.

Results

Return on Investment

Increased our client’s return on investment by 18%.
In their current condition, our client would replace approximately 132.75 roofs per year.
With our recommendations, our client will reduce their annual roof replacements by 21.09 per year by extending their lifespan 2.83 years to a 17.75 lifespan average.
With an average roof replace costing $682,000, our client was projected to spend $255 million on roof replacements in the next year.
Our recommendation will save our client an estimated $8.6 million dollars each year on roof replacements, equivalent to $4356.99 savings per roof system per year.

Cost Containment

In addition to the 102 roof systems requiring replacement in 2008, without performing the recommended work, our client can expect to replace an additional 670 roof systems in the next 5 years (between 2009 and 2013). This would cost an estimated $457,275,000.
If our client performs the suggested work they can expect to replace only 146 roof systems between those years, saving them an estimated $357,630,000 on roofing alone.
The estimated cost to our client to perform the recommended work was $102,215,937.65, therefore the cost reduction achieved will offset the initial repair and replacement cost and leaves our client with an additional savings of $259,985,796.10.

Reducing Barriers

Roofing issues take away from revenue generating employees.
On average, our client had 5-8 leaks per facility throughout one year, meaning 2-3 associates were tending to the water clean-up instead of making sure their customers were happy. Through our recommendations our client will be able to reduce/eliminate leaks from occurring, thus freeing up their revenue generating employees.
Through a programmatic approach to store maintenance, barriers can be sufficiently reduced.
Executing the recommendations will provide the opportunity to increase revenue by having local contractors perform necessary repairs and maintenance.

Long Term Rewards

The outcome of this roofing portfolio evaluation has created a roadmap to direct our client on how to achieve a variety of cost reducing items

Proactive management verses reactive management.
Increase in roof system lifespan.
Ability to reduce or eliminate collateral damage from occurring at the facilities.
Ability to reduce or eliminate reactive repair calls.
Ability to reduce or eliminate yearly roof system replacements.

By performing the recommendations we provided, our client is able to strengthen their environmental footprint.

Through the elimination of 524 roof replacements, these recommendations would result in the elimination of 20,880 dumpsters (250,560,000 lbs.) of material being placed to landfills and 5,742 16-wheel semis of material/natural resources from being consumed.