Rethinking Whole Life Cycle Cost based decision-making

1. Rethinking Whole Life Cycle Cost based decision-making Dr Richard John Kirkham Liverpool John Moores University School of the Built Environment, formerly of Cranfield University Rethinking the Whole Life Cycle Cost process

2. Mention whole life costing to many industry professionals at your peril…. Oh no…not whole life costing again! * !! *! ? ….but why…. Rethinking the Whole Life Cycle Cost process

3. …so why is it still with us then… • Because the Deputy Prime Minister says so! • Can help LA’s comply with Best Value/Sustainability • PFI bids require WLC analysis • The NHS has embraced WLC as part of Procure 21 • But WLC has always been with us in various guises • Clients are beginning to question the long term costs of design solutions – WLC gives them the answers! Rethinking the Whole Life Cycle Cost process

4. …perceived problems with whole life cycle costing… • too much uncertainty • too much data required • what about service life prediction – calculating the study period? • too costly and time consuming • but moreover... COMPLEXITY Rethinking the Whole Life Cycle Cost process

5. …but in reality, these are not the real problems… • WLC should, by nature, be a bespoke process (a contentious point however given the attempts to standardise in ISO15686!!) • The sums are no different, it still requires PV calculations and Discount Rates, NVP, IRR etc like it did in the 1970s “Terotechnology” era • OK – the probabilistic approach throws up a few problems for “stats-haters”, like interpreting PDFs and CDFs CIs etc • BUT…the real problem lies in the METHODOLOGICAL approach to WLC, there just isn’t a good one!! Rethinking the Whole Life Cycle Cost process

6. …OK, but like I told you, its too complex… • no standard “off the shelf” methodology • where do we start? • what do we do with the information? • how do we interpret the results? • do we need to employ a mathematician from NASA to do the sums? Rethinking the Whole Life Cycle Cost process

7. Building Design Solution A Building Design Solution B Whole Life Cycle Cost Model Select solution based on WLCC results Building Design Solution C Proceed to construction and operational phases ? Recording of WLCC data and decisions …this is - The traditional WLC model… …retrospective Rethinking the Whole Life Cycle Cost process

8. The traditional WLC model • WLC is not optimised • Rather, “the lesser of several evils” • Information elicited at early stage (briefing) does not feed into the detailed design stage • The analysis does not inform the design in any way • It is therefore seen as an unnecessary “add on” • In other words, WLC should be dynamic! Rethinking the Whole Life Cycle Cost process

9. So…in order to change… • We need to think about how designers make decisions • And how we can capture this information in order to optimise the WLC decision process AND Rethinking the Whole Life Cycle Cost process

10. …Rethinking the process – a decision map… • We looked at various models of decision-making – design process models including: • The RIBA Plan of Work • The BAA Guide to Construction Process • The Process Protocol (Kagioglou et al 1998) • And the need for briefing and continuous feedback identified in Latham Rethinking the Whole Life Cycle Cost process

11. …implementing the process map into the WLC process… Data capture Rethinking the Whole Life Cycle Cost process

12. Environment All Level Considerations Function Maintenance Disposal Cost Paint type, floor finish, doors, etc. Pump, boilers, cabling, pipes, light fittings etc. Level 3 Detailed Cladding, fixings and joints Concrete, in-situ, pre-cast, grade etc Energy, ventilation, communications Level 2 System Cladding, roofing, glazing etc. …Rethinking the process – a decision map Finishes Steel, concrete, timber etc. Services Envelope Level 1 Strategic Structure Feasibility Design Operation Concept Construction Disposal Rethinking the Whole Life Cycle Cost process

13. …Capturing the data… • In order to manage the process over the 3 stages, a model is required to handle the data • It should replicate the virtual process map • To enable the seamless transition of decision-making through the 3 design stages and 4 “life stages” • And provide and audit trial of all decisions made, and by whom • …..The LOGBOOK Rethinking the Whole Life Cycle Cost process

14. …managing the knowledge: The Logbook… • A vehicle for implementing the iterative application of WLC from briefing through to final design and construction • A repository for recording the design, capital investment, maintenance, operational and decommissioning decision-making process throughout the whole life of the building • Enables continuous performance assessment throughout the operational stage (compare WLC results against real data) • Additionally, supports a new Environmental Impact Analysis assessment to be used in conjunction with the WLC model • Supports CIBSE Logbooks initiative Rethinking the Whole Life Cycle Cost process

15. The Logbook structure… Rethinking the Whole Life Cycle Cost process

16. …The application software… Part 0: The Client Brief Rethinking the Whole Life Cycle Cost process

17. Part 1: Design and construction phase Rethinking the Whole Life Cycle Cost process

18. Part 2: Operational phase Rethinking the Whole Life Cycle Cost process

19. Part 3: Decommissioning phase Rethinking the Whole Life Cycle Cost process

20. Environmental Impact Analysis Rethinking the Whole Life Cycle Cost process

21. …The benefits of using The Logbook… • Encourages building developers and owners to think “Whole Life” – this information may eventually be insisted upon by clients, like the Logbook for a car!! • The design WLC can be optimised unlike existing techniques • A history of the project, which could prove invaluable when submitting bids on similar projects in the future • Facilitates co-ordinated collation of building capital, operational and decommissioning data Rethinking the Whole Life Cycle Cost process

22. …and now a message from our sponsors… • Part of EuroLifeForm www.eurolifeform.com • “Probabilistic Approach to Life Cycle Cost and performance” EU 5th Framework grant • Other project partners include: Cranfield University, Building Research Establishment, Taylor Woodrow, Skanska, Carl Bro, Labein, CIS Ecologica, Labein, GEK Athens and the University of Porto • Case studies on Mid-Yorkshire Hospitals NHS Trusts (Wakefield) and St Helens and Knowlsey NHS Trusts (Merseyside) PFI bids Rethinking the Whole Life Cycle Cost process

23. Case studies outcomes and a full review of the EuroLifeForm project to be presented at the 1st becon conference organised by the University of Liverpool and Liverpool John Moores University September 2005 Rethinking the Whole Life Cycle Cost process