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Demonstrating value for Money in a DLO. Rob McNaughton. DLO Work Selection. Why does it matter? Because of DLO characteristics Very inelastic costs Single dominating customer – inelastic income Single status Restrictions on Terms and conditions Working hours Bonus and incentives.

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Presentation Transcript
dlo work selection
DLO Work Selection
  • Why does it matter?
    • Because of DLO characteristics
      • Very inelastic costs
      • Single dominating customer – inelastic income
      • Single status
      • Restrictions on Terms and conditions
        • Working hours
        • Bonus and incentives
what kind of work are suitable
What kind of work are suitable?
  • Stable income over medium / long term
  • Work that is not best undertaken by sequence production, e.g. mass kitchens
  • Work where general building sub-contracting is available
what is suitable
Yes

Responsive and voids

Minor works and batched works

Out of sequence refurbishment – may be but

No

Major sequence refurbishment

External painting

M&E cyclicals

What is suitable?
what about external contracts
What about external contracts
  • The Inspector questions
    • Why is this advantaging your organisation?
    • How do you deal with customer conflicts?
    • What happens when it ends?
  • My advice – keep it as a marginal activity with community benefit
value for money
Value for Money
  • What does not work:
    • Average repair cost benchmarking
    • Baskets of rates
    • Void cost benchmarking
  • What may not work
    • Competitive tendering
value for money7
Value for Money
  • Cost efficiency only – responsive
  • Cost efficiency – voids
  • Demand
  • Performance
  • Customer satisfaction
voids 1
Voids -1
  • You cannot directly compare void costs
  • Void rates are tied to responsive rates
  • You must capture all void costs
voids 2
Voids -2
  • You can compare where the money goes:
    • Security
    • Cleaning and clearance
    • Safety checking
    • Repairs
    • Investments
    • Re-decorations
    • Re-charges
    • Other
demand
Demand
  • Responsive (excluding gas) between 3 and 3.5 jobs per unit per annum
  • Voids – not relevant
performance responsive
Performance - responsive
  • Average time to complete all jobs (less than 8 days)
  • Total % of appointments made of all jobs
  • Total % of appointments met by DLO
  • Jobs completed at first visit
  • Jobs that go over 20 working days
performance voids
Performance - Voids
  • 3 days to commission
  • 2 days to hand back
  • £250 per day in the middle
  • E.g. £2000 void = 3 days plus 2 days plus 2000/250 (8days) = 13 days
customer satisfaction
Customer Satisfaction
  • I don’t care about satisfied customers
  • I care about less than fully satisfied customers
    • Why was it not perfect?
    • What can we do about it?
what demonstrates value
What Demonstrates Value?
  • A strategy
  • Price testing
  • Managing the key costs
  • Managing the (right) budget
  • Performance measurement
  • Performance management
  • Benchmarking actively
performance management
Performance Management
  • The jobs – measure the right things and do something with the output
  • The people – for productive staff this is a daily / weekly event
i am an inspector
I am an Inspector
  • Did you do what I told you to do last time
  • Is there a vfm strategy?
    • Is it being used?
  • Have you some validation of cost efficiency?
    • Competitive test
    • Meaningful cost comparisons
  • Do budgets and spend correlate?
  • Is the written policy the one that operates?
i am an inspector18
I am an Inspector
  • Do you understand demand?
  • Do you involve tenants and use customer feedback?
  • Do you use monitoring information?
  • Do you look outside?
  • Is your DLO scrutinised (cliented)?
  • Are you managing business risk?
ask yourselves
Ask yourselves
  • Why do we use a Schedule of Rates / open book?
  • Do we know the history?
  • Is our income secure for the next five years?
  • Do operatives know what performance is expected of them?
  • Can your supervisors supervise?
ask yourselves20
Ask yourselves
  • Do you know where you are making surplus / loss
  • Has everyone a grasp of the basic statistics
    • How many jobs – day / week / month / year?
    • How much?
    • How we do things?
  • Have we got records that make show that this operation is managed?
tailpiece
Tailpiece
  • Delivering service is not a battle it’s a war
  • Action plans win battles
  • Agendas win wars
  • ‘Why’ and ‘how’ are your greatest weapons