In today’s dynamic and increasingly competitive aged care landscape, providers can gain a real advantage by having an effective Facility and Asset Management strategy. Organisations with a robust Asset Management system in place can improve productivity, equipment utilisation, customer experience, staff satisfaction, brand reputation, financial performance and reduce risk. Yet in New Zealand, Asset Management is not a high priority for many aged care facilities – until something fails.
While engaging trusted Facilities and Asset Management specialists to help businesses realise greater value is the norm in Europe, New Zealand is well behind the curve as many aged care organisations tend to focus on reactive maintenance management. According to Asset and Facilities Management specialist and AUT Lecturer Jack Crutzen, focusing on maintenance alone can be a costly and risky practice – especially in an industry like health care where assets like medical equipment play a vital role in delivering optimal health outcomes.
Speaking at the inaugural Challenging the Norm Conference in Auckland, Jack explained that this “reactive” approach to maintenance stems from a lack of understanding about the benefits of Asset Management, a reluctance to invest in expert advice and a cost-cutting mind-set.
“When it comes to Asset Management, New Zealand organisations are way behind the rest of the world,” Jack said. “We think we get ripped off so we don’t invest in getting the right advice. It’s a typical Kiwi attitude and it’s not right.”
Put simply, Asset Management ensures you have the right assets, for the right dollar value and expenditure to achieve your desired business outcomes. Unlike almost any other industry, residential aged care facilities operate 24 hours a day, seven days a week. It is becoming increasingly regulated and – when you combine this with frail older residents, staff, management, owners and government, it is easy to have conflicting sets of priorities such as CapEx vs R&M for tax purposes, R&M overspend due to ageing product failure and lost time rectifying issues and dealing with adverse events like complaints.
“If something breaks it disrupts your day, you can’t go about your business. Productivity decreases and the outage has an impact on your staff and residents. Productivity is highly impacted by the quality of your assets,” says Jack.
Jack also challenges the sector’s cost-cutting mind-set and says effective Asset Management is about much more than saving money. While managing an aged care facility is undoubtedly a balancing act, Jack challenges the sector to shift their thinking about asset management from “cost” to “value.”
“I’m sick of only talking about cost,” says Jack. “Those who focus on costs don’t have a good view of the lifecycle of assets, and how much it will cost if you muck it up at the design phase, or the procurement phase because you go cheap. You pay through the nose over the years.”
Jack says not knowing the true value of your assets such as the number of assets you have in your organisation, where they are, what condition they are in and when they’ll need servicing or replacing, opens aged care providers up to huge risks, as well as losses in productivity and utilisation of existing equipment.
“Effective facilities management is about more than reducing costs, it’s about managing your facilities and all the assets within them over the long term, to increase the value of your business,” says Jack. “It’s about ensuring the well-being of your residents, and it also can help keep you out of jail if or when something breaks, somebody falls and you have a health and safety issue.”
Taking a more holistic approach to Asset Management helps you to make better decisions about the assets you choose to invest in, provides you with a procurement advantage and line of sight when something is going to break. Facilities that manage their assets well create an important selling proposition that their brand can leverage.
The good news for the aged care sector is more tools are being developed to help organisations track and manage their assets. And organisations can also draw on advice from global experts like Jack (who now resides in New Zealand) who has experience in the Health sector. Although getting expert advice is an investment, it’s one that does more than pay for itself in the long run.