Rethinking Whole Life Cycle Cost based decision-making

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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
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Oh nonot whole life costing again!

• Mention whole life costing to many industry
  professionals at your peril.

!! ! ?

• .but why.

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so why is it still with us then

• Because the Deputy Prime Minister says so!
• Can help LAs 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!

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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

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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
• BUTthe real problem lies in the METHODOLOGICAL
  approach to WLC, there just isnt a good one!!

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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?

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this is - The traditional WLC model
retrospective
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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!

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Soin 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
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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

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implementing the process map into the WLC
process
Data capture
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Environment
Function
Maintenance
Disposal
All Level Considerations
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
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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

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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

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The Logbook structure
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The application software
Part 0 The Client Brief
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Part 1 Design and construction phase
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Part 2 Operational phase
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Part 3 Decommissioning phase
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Environmental Impact Analysis
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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

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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

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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