FACILITY MANAGEMENT – INDIA2009 - 2010

By Yogesh Kende

1

Meaning of Mall

• A large, often enclosed shopping complex containing various stores, businesses, and restaurants usually accessible by common passage ways.

• A street lined with shops and closed to vehicles.

• A shady public walk or promenade.

2

South China Mall

Location: Dongguan, ChinaYear Opened: 2005Gross Leasable Area: 7.1 millionsquare feet

3

Golden Resources Shopping Mall

Beijing, ChinaYear Opened: 2004Gross Leasable Area: 6 million square

4

SM Mall of Asia

Location: Pasay City, PhilippinesYear Opened: 2006Gross Leasable Area: 4.2 millionsquare fee

5

West Edmonton Mall

Location: Edmonton, Alberta, CanadaYear Opened: 1981Gross Leasable Area: 3.8 million square

6

King of Prussia Mall

Location: Philadelphia, Pennsylvania,USAYear Opened: 1962Gross Leasable Area: 2.8 millionsquare feet

7

Berjaya Times Square

Location: Kuala Lumpur, MalaysiaYear Opened: 2005Gross Leasable Area: 3.4 million

8

Mall Management - A Growing Phenomenon in Indian Retail Industry

9

Executive Summary• The Indian retail market is expected to continue its growth

trajectory into 2010.• Mall management has been identified as a critical factor for

the success of malls and the retail industry across the world.

• Mall management broadly includes mall positioning, zoning, tenant mix, promotions / marketing and facility/finance management.

• Currently, the Indian retail market lacks designated mall management firms. Large real estate developers and retail chains either have their own mall management arms operating as subsidiaries or have contractual agreements with international property consultants.

10

Cont…

• Till recently, mall management was limited to facility management by a majority of developers in India, leading to gaps in mall management practices.

• Given the high future supply of malls and increasing competitiveness within the Indian retail market

11

What is Mall Management?

Globally, mall management broadly includes:1. Positioning a mall (Location, Layout and design)2. Zoning – formulating the right tenant mix and its

placement in a mall3. Promotions and marketing4. Finance management5. Facility management – Infrastructure, Traffic and

Ambience management

12

The Single Purpose of RetailProperty Development

=Value Creation!

13

1) Positioning a Mall

Positioning a mall refers to defining the category of services offered based on demographics, psychographics, income levels, competition in neighboring areas and extensive market research of the catchment.

For example, if the market research indicates that the average number of households living in a particular area belongs to the upper middle class,

An example of this practice can be seen in the upcoming malls Select City Walk in Saket DLF’s Emporio in Vasant Kunj.

14

Cont…

• Positioning also refers to the location of the shopping mall. A good location defined in terms of factors like ease of access via roads, good visibility, etc. is considered as one of the prime prerequisites for a mall. Although other activities such as trade/tenant mix can be revisited or redefined, the location remains fixed, making it an imperative

15

Positioning Includes:

a) Locationb) Layoutc) Design

16

a) Location• The main objective of any industrial concern is to transform

raw materials into end products by utilizing all the required resources and serving them to the customers effectively, efficiently, economically, and quickly.

• This is possible when the plant is of the right size, right design, and at a place where all kinds of production economies are available.

• Facility Location and Layout play a key role in enhancing the plant efficiency and production effectiveness.

• The way in which inputs are obtained and outputs are distributed affects the location and layout decisions.

17

Factors Influencing Location Decisions:

Many factors - can be classified into three.a. Market Related Factorsb. Tangible or Cost Factorsc. Intangible or Qualitative Factors

18

Location Evaluation Methods:

• A number of diverse factors affect the location decisions

• Developing a formal, generic location model is very difficult.

• A complete study of all the sites available and identifying the optimal one is expensive and time consuming.

19

People generally go for satisfying decisions instead of optimum

decisions.

20

Entrepreneurs may choose to exercise their choice

• One choice is to have a single central plant that produces all the products of the company.

21

Central Plant

Advantages:• Economies of Scale• Reduced unit cost by

better utilization of equipment

• Dispersion of fixed costs over more units

Disadvantages:• Highly Dispersed

Suppliers• Highly Dispersed

Customers• Transportation Costs• Strike• Disaster - Fire / Flood

22

b) Layout:• Physical Disposition of a Facility and its Various Parts. • Layout Decisions also have a Long-term Consequence

on Costs and Ability of the Firm to Serve the Market.• A Layout is a Physical Configuration of Departments,

Workstations, and Equipment in the Conversion Process.

• It is the Spatial Arrangement of Physical Resources used to Create the Product

Objective: To provide a smooth workflow of material through the workplace.

23

Criteria for a Good Layout: 1. Maximum Flexibility2. Maximum Coordination3. Maximum Visibility4. Maximum Accessibility5. Minimum Distance6. Minimum Handling7. Minimum Discomfort8. Inherent Safety9. Efficient Process Flow10. Easy Identification

24

Types of Layouts:

Broadly, there are 3 Types of Layouts:1.Process Oriented Layout2.Product Oriented Layout3.Fixed Position Layout

25

Developing Layouts:

1. Mathematical Models – to Analyze and Conceptualize

2. Computer Models – to Arrive at a Quick Approximation

3. Physical Models – to Visualize

26

Japanese Approaches to Layout:

• Japanese Culture Encourages Teamwork.• When an equipment breaks down, they do not wait for management or maintenance people.• Main idea is work simplification and continuous improvement Japanese changed both the physical layout and managerial system.• They use U – shaped assembly lines

27

c) Design:OBJECTIVES: • To get the inputs (material, supplies, etc) into through and out of each

facility in the shortest time practicable, at acceptable cost.

• Design deals with the design and arrangement of physical elements of an activity/s related to the manufacturing industry, whose drawing represents a plant layout.

• Design analyzes, conceptualizes, designs and implements systems for the production of goods or services.

• Design is represented as a floor plan, or an arrangement of physical facilities (equipment, land, buildings, utilities, etc.)

28

Enterprise Design Process

29

2) Zoning:

• Formulating the Right Tenant Mix and Its Placement in a Mall.

• Tenant mix refers to the combination of retail shops occupying space in a mall. A right tenant mix would form an assemblage that produces optimum sales, rents, service to the community and financial ability of the shopping mall venture.

30

Zoning refers to the division of mall – Forum Mall

31

Forum Mall

• The Forum Mall is designed in a ‘dog bone’ fashion, an anchor tenant at each end and vanilla retailers in the middle.

• Landmark and Westside are the anchor tenants of this mall, and the food court is positioned on the top floor to attract consumers vertically up.

• Forum Mall was built in 2003 and was the first mall in Bangalore City. Since then, six new malls have been constructed in the city and yet the Forum Mall

• Continues to command the highest foot traffic, continuing to

32

3) Promotions and Marketing:• Promotional activities and events in a mall form an integral

part of mall management.• Activities like food festivals, handicraft exhibitions and

celebrity visits increase foot traffic and in turn sales volumes.

• Organizing cultural events has time and again proved vital in attracting consumers to a mall.

• Such activities may also act as a differentiator for a mall.• Developers can work on drafting marketing• strategies• for individual malls to meet the needs of the local• consumer base and the challenges of local.

33

Promotion and Marketing atAnsal Plaza

34

Cont…

• Regular promotional activities at Ansal Plaza, including cultural events have ensured a steady foot traffic in the mall since its inception in 1999.

• The mall also has an amphitheatre dedicated to these promotional activities.

• This has been one of the driving factors behind the success of the mall, despite having a less optimal mall design and tenant mix compared with some recent

35

4) Finance Management:

• Professional financial management of a mall as a business venture is a must.

• Mall Management also covers financial management, which involves monitoring and controlling of various issues such as:

• Cash receipts and collection of income including rentals, service charges, car park receipts,

• Electricity and other utility income• Developing accounting systems to track the ageing of

debts, payment delay patterns, bad debts.36

5) Facility Management:

• Facility management refers to the integration of people, place, process and technology in a building 5 Vanilla retailers refer to single-brand shops.

• It also means optimal utilization of resources to meet organizational needs.

• It broadly includes Infrastructure, Ambience and Traffic management.

37

a) Infrastructure Management:

• Infrastructure management refers to the management of facilities provided to the tenants within the mall.

• This includes provision of adequate power supply, safety issues in case of emergency and miscellaneous issues related to signage, water supply, sanitation, etc.

38

Make sure that every bit of the mall has enough infrastructure

39

Cont…

• Infrastructure management refers to the management of facilities provided to the tenants within the mall.

• This includes provision of adequate power supply, safety issues in case of emergency and miscellaneous issues related to signage, water supply, sanitation, etc. Infrastructure management also includes risk management issues such as essential safety measure asset liability and

40

Cont…INFRASTRUCUTRE REQUIRED:

• Uninterrupted Power Supply with 100% power backup

• HVAC with adequate redundancy• Fire Fighting & Detection System• Dedicated Security System• ETP Plant• Proper Sewage System• Water Softening & Purification System• P. A. System with Channeled Music• Emergency Lighting in all areas• Toilets - separate for customers & staff• Building & Floor Directories• Signages directing customers towards

elevators, toilets, fire exits, etc.

OCCUPANT MANAGEMENT:• Help desk• Periodic feedback• Coordinate construction of shops• Billing• Collections• Attending to grievances & complaints• Ensure observance of rules &

regulations of the mall

41

B) Traffic Management:

• Traffic management includes managing foot traffic into the mall and parking facilities.

• Foot traffic management involves crowd management inside the operational area of a mall.

• The flow of people is related to the design of the mall and the spatial

42

A shopping mall underground parking

43

C) Ambience Management:

• The overall shopping experience provided for consumers becomes an important factor for the success of any mall.

• Ambience management includes management of parks, fountains and overall look of the mall.

In favorable, lush green landscaping with seating facilities and the presence of food and beverage inside or outside the mall can increase foot.

44

Facility Management In The Indian Context

45

‘FM Is About Managing People

and Places to Achieve Best Value

for Money by Balancing Between

User Needs and Business Needs to Achieve Optimum

Organizational Effectiveness’

‘FM Is About Managing People

and Places to Achieve Best Value

for Money by Balancing Between

User Needs and Business Needs to Achieve Optimum

Organizational Effectiveness’

Occupant Perceptions

OrganizationNeeds

Cost

Productivity

Infrastructure

Micro-environ

CWO

RKIN

G

EN

VIR

ON

MEN

T

Value ForValue ForMoneyMoney

Value ForValue ForMoneyMoney

Facilities Management’sEffectiveness is Measured

Through

… helping Clients attract and retain good employees by providing an excellent working environment

Understand FM …….

46

47

Sector Overview in India:

New Delhi & NCR ( 20%)

Mumbai(10%)

Pune(10%)

Bangalore(35%) Chennai

(10%)

Hyderabad(5%)

Others(10%)

Others include Chandigarh, BBSR, Indore, Jaipur, Vizag, TVM, Calcutta etc

Total FM Market : Rs.1225 Crores

48

Future Growth Prospects:

FY 2007-2008

FY 2008-2009

FY 2009-2010

Foreign systems in Indian Context- do they work??- Issues

• FM companies are brought in at a late stage of the project. Cost of fixing an error rises dramatically, with highest cost during the operations phase.

• Large organization should focus on Strategic Asset Management-Property performance, planning tools, delivery methods etc.

• Capacity to pay to service providers is limited. Only rich projects make use of technology /hi-tech equipments.

• Environment, health and safety issues given less importance.

49

Facility Management - Indian Context

• Growing Market, limited trained manpower hence prone to poaching.

• No training institute with a focus to FM.• Acute manpower shortage foreseen in future.• Vendors as business partners.• Most facilities are over manned.• Performance based Management fee with a fair fixed

fee.• Develop applicability of FM to all types of

infrastructure like township, factory, hospitals, airports, STPI parks, Govt. establishments etc.

50

TOWNSHIP - FM COMPONENTS

• MUNCIPAL SERVICES• ZONAL SEVICES

51

MUNICIPAL SEVICES• Landscaping / Turf Management• Lake Maintenance• Maintenance of Utilities• Street lighting / signage• Street repair• Street cleaning• Potholes• Sidewalk repairs• Traffic Management and Parking Mgt• Refuse collections• Sanitary enforcements• Illegal dumping• Dead animal pickups

52

ZONAL SERVICES

• Grass Mowing• Housekeeping• Pest and Rodent Control• Security• Electrical and Mechanical Services

53

STRATEGIC MANAGEMENT STRUCTURE

Delivery Systems• Performance Plan• Develop process improvement plan• Restructuring delivery relationships

Maintenance Mgt• Preventive maintenance• Condition monitoring• Corrective maintenance

Service Quality Measures• Management Systems• Health and Safety• Staff Professional development

Call Center/Help Desk• Forward complaints/reports/orders to appropriate person• Monitor performance• Maintain database of all calls

54

55b a c k n e x th o m e

Strategic Assets & Facilities Audit ---Technical Evaluation of Building state and services

Facilities Management Incorporating quality controls, vendor development, sub-contract management, house-

keeping services and systems management

Activity AGENCY TOP PERFORMANCE

ZONE PERFORMANCE

OBSERVATION

Grass & weed Mowing

Trash Collection `

Rodent Abatement

Abandoned Vehicles

Sanitation Enforcement

Parking Enforcement

Street/ Sidewalk Repair

Street Cleaning

Landscaping

Dead Animal Pick Up

SYSTEM OF MONITORING MUNICIPAL SERVICES

56

b a c k n e x th o m e

Strategic Asset & Facilities AuditModern Techniques

S.no Service Item Functions Benefits Remarks

1. PropertyManagement

ComputerAided FacitlitiesManagement

ProvidesCentralisedexpertise for allmatter

Call Center can beestablished

2. FinancialManagement

FinancialSoftwareintegrated withCAFM

7 Levels ofHierarchy

Single SeatInterface

3. UtilitiesManagement

BuildingAutomationSystem

InteroperabilityViz HVAC,Lighting, BuildingAccess, Security,Fire Fighting,WorkManagement

EnergyManagementEfficiency ofsystem, CostReduction, BetterinformationManagement, CostReduction, BetterControl Actions

4. TrashCollection &recyclingCollection

Large Supercans (96gallons)

Collection on aperiodic basis. Alltrash is baggedand put in a supercan.Bags outside thecan are allowedonly for grassclipper & leaves.

Systematic methodof Trash collection

Recyclingcollection-newspaper,corrugatedcupboards, food &beverages, cans,glass bottle,metals, plastic etc.

57b a c k n e x th o m e

S .n o S e r v ic e I te m F u n c t io n s B e n e f its R e m a r k s

5 . S tre e t C le a n in g M e c h a n ic a l S tre e t C le a n in g

C le a n in g S tre e t fo r m u d a n d l i t te r

R e g u la r is e c le a n in g o n a p e r io d ic b a s is

6 . O p e n A re a C le a n in g

P re s s u re C le a n e r , F lo o r S c ru b b e rs , D r ie rs

S w e e p in g & c le a n in g o f la rg e o p e n a re a s

E f f ic ie n t a n d m o d e r n m e th o d s o f c le a n in g

7 . S e c u r i ty E le c tro n ic & a c c e s s c o n tro l s y s te m , D ig i ta l v id e o T e c h n o lo g y

A c e n tra l is e d s e c u r i ty s y s te m

8 . T u r f M a n a g e m e n t

M o w in g E q u ip m e n t; B la d e T y p e , R e e l T y p e , F la il & R o ta ry ty p e S p r a y e r s S e e d e rs

C o m m o n ly u s e d fo r m o w in g la rg e o p e n a re a s C h e m ic a l S p ra y e rs a n d S p re a d e r

H ig h P ro d u c t iv i ty & Q u a l i ty p e r fo rm a n c e . E n v i ro n m e n ta l C o n c e r n , A d v a n c e d T e c h n o lo g y , C o m p u te r is e d S p ra y e rs . L a rg e c o v e ra g e a re a .

FOR A SUCCESSFUL MALL ……

A Carefully Conceived Design and A Good Management Team, managing the functioning of the Mall.

Modern, Convenient, Technologically Well-Equipped, Well - Maintained / Managed and Promoted – Today’s Malls…..

Efficient Management requires: Integration of the Owner and The Mall Management Team

58

Mall management : planning and strategy

PROPER PLANNING INCLUDES :

• VISITORS MANAGEMENT• OCCUPANTS MANAGEMENT• SOUND INFRASTRUCTURE• CREATION OF AN AMBIENCE

59

Scope of ServicesUtilities Management Service Management Management Functions Minor Repairs

• Fire Detection and fire fighting system

• HVAC• Lifts & Elevator • Water and Fire Pumps• Closed Circuit Television

System• Access Control System• Vertical Elevation Systems • Water & Fire Fighting

Pumps• Backup Power Supply

• Security• Electrical & Mechanical• DG & HVAC Operations• House Keeping• Sanitary & Plumbing• Pest Control• Landscaping• Office Support Staff• Water Effluent Treatment

Plant Maintenance• Parking Area Management

• Quality Control• Health and Fire Safety• Preventive Management• Energy Management• Help Desk• Vendor Management &

Procurements • Tender Processing• Inventory Control• Budgeting

• Equipments• Civil works• Carpentry• Masonry work• Furniture• Painting • Trouble shooting• Project Work

60

61

MALL MANAGEMENT : Typical Organization Structure

62

MALL MANAGEMENT : TYPICAL MALL OPERATION SCHEDULE

Description of Timings Duration Remarks

Mall Timings 9 AM - 9 PM 12 Hrs.

Cleaning Time 6 AM - 9 AM 3 Hrs.

Major cleaning carried out before opening of Mall for customers, in presence of security staff.

Diesel Delivery 7 AM - 9 AM 2 Hrs.

Escalator / Lift Repairs 11 PM - 7 AM 8 Hrs.

Escalators generally require 5-6 hrs time for maintenance work, in the presence of security staff.

Garbage Disposal 7 AM - 8 AM 1 Hr.To be carried out in the presence of security staff.

Emergency Lighting - -Required by Inverters and/or emergency lights in all common areas and shops.

Electrical Breakdown 24 Hrs. 24 Hrs.Typical minor electrical faults in shops require 10mins to 40mins to repair.Recommendation - Have ample number of electricians at all times.

Air Conditioning Maintenance Works 7AM - 10 AM 2-3 Hrs.

Normal maintenance of AHU's etc. installed in shops and common areas. Cleaning of filters etc. of AHU's, in the presence of security staff for common areas and in the presence of shop owners for the shop.

Plumbing Work 11 PM - 7 AM 8 Hrs.All plumbing work to be done at night in the presence of the security staff.

OPERATION SCHEDULE

INORBIT MALL Mumbai is an example of a successful mall led by good facility management

63

Inorbit Mall in Mumbai

By K Raheja Corp is a good example of facility management in a mall. It has two anchor stores placed at the two corners of the mall. There are three entry points, one each from the two anchor stores and another entry directly to the mall atrium. With three entry points, traffic management within the mall is better organized.

64

Cont…

• The mall also provides ample parking space and superior infrastructure management. The Inorbit Mall commands higher rental values of INR 175 per sq ft per month compared with other malls in the north-western suburbs of Mumbai with average rental values of INR 135 per sq ft per month in 4Q06, indicating it’s success story. The low vacancy rates at Inorbit Mall.

65

Indian Scenario for MallManagement

• large Indian conglomerates such as Reliance Industries and Aditya Birla Group are commencing their foray into retailing across India.

• Currently, there are very few designated mall management companies in India.

• However, big retail chains such as Future Group and some large developers have set up their own mall management divisions that operate as their subsidiary companies.

• Some developers such as DLF have also recently entered into contractual arrangements with retailers.

66

Future trends…• The building industry is recognizing the benefits of an integrated Facility

Management Services and the trends are:– the increased availability of industry specific software packages that

can provide for a wide range of FM requirements; – data on assets such as buildings and equipment is being viewed as

corporate information that is best managed by the FM department – increasing interest in web based access to the FM services for

improved access to information by the FM staff and others in the organization;

– more emphasis on business process re-engineering and staff training in order to maximize the use and benefits of the system;

– future interfaces with building automation systems in order to achieve further operating efficiencies.

67

In India, retail is an emerging market having immense potential in terms of opportunities.

68