operations center location model

11

Operations Center Location Model

Analysis Tool For Optimizing Field Operation Headquarter Locations

© PRES Location Strategies (800) 362-3708

Introduction

Operations Centers• Also called Service Centers, District Offices, Crew Headquarters, etc.

• A base or HQ to assemble, prepare, and support work done in the field (on the network, at customer’s premise…).

• Main functional group are field crews (various type).

• Typically include administrative, technical, and logistic support functions.

• Might Include Other “Local” Functions.

Location Strategy (Strategic Plan)• Determine strategic locations and “template” for each site:

• Where Should Operations Centers be Located to Provide Best Business Value?

• What Comprises Each Operations Center? How Large?


Develop the strategic direction that identifies the “best balanced” potential configurations of operations centers:• Position real estate assets to better serve the business.• Quantify financial implications of a plan to support informed decision-

making Use analytical model to evaluate

sets of scenarios with different criteria to evaluate alternative configurations of operations centers so the benefits of one over another can be quantified.

Optimize operations center locations:• To provide satisfactory response times.• To provide the best balance between

travel costs and property costs.

Operations Center Location Objectives

Consolidated centers offer lower facility cost, less material inventory, ability to share equipment, and crew assignment flexibility.

Dispersed centers provide the ability to quickly get to work locations in the field.

Goal is to find the appropriate balance.


Value of Using Model for Location Analysis

Historically Operations Center Sites Are Individually Selected Based on (Good) Knowledge of Local Management.• New sites often built on regular basis so “lag” in system was modest.• Changes in technology and operations were modest.

Modeling Allows Better System-wide Re-alignment Analysis, Particularly With Multiple Site Changes:• Quantified implications for travel

time due to multiple changes in complex network of sites.

• Can forecast changes vs. reacting, easing capital program development.

• Can relatively quickly evaluate changes in location and nature of operations centers due to work practices, facility consolidations, or operational constraints to identify best value opportunities.

• Can use available data, then identify issues sensitive to data quality or assumptions to minimize up-front costs.

Scenario Criteria

Individual Scenario Results

Comparison of Multiple Scenarios


Model Inputs

Crew Type/Composition• This data is a “given”; model allocates 100% of staff based on workload.• Each distinct type of crew can be analyzed – can use “sequenced” approach where primary

type(s) determine locations then secondary types allocated among the locations. Geography

• Study Area is a “given” (Data needs to be setup for entire area but sub-areas can be used in specific analyses).

• Can Incorporate district boundaries (say union areas, existing districts, etc.). Work Projections*

• Variable – can have as many data sets as desired (Typically have 1-3).• Can be based on anything that business believes “drives” field work but needs to be able to

be mapped at desired granularity (zip code, street, arbitrary grid, municipality, etc.). Property Data*

• Variable - can be as specific as available information and range from “points on a map” to site-specific size and cost data.

• Travel times can be reviewed and adjusted for normal traffic conditions. Business “Rules”

• Crew deployment (Min/Max per site).• Max response time (by geographic unit).• Can hold specific districts, hold specific locations, set Min/Max # locations.

Supplemental Models – Based on Crew Distribution• Fleet (repair bay distribution).• Material Support (“retail” and “wholesale” storage areas).


Model Inputs: Work Projections

Field Work is Typically Either Customer Oriented or Asset Oriented, and Planned or Unplanned (as shown in figure to the right).

Any Type of Estimate of Work Distribution that Can be Made Can be Used in the Model

Analysis of Past Work Can Provide Proportion by Type to Allow Projection Based on Work “Driver”, for Example:

• Recurring work → historical patterns• Randomly occurring work → historical

pattern x customer distribution• Capacity related work → system condition• Planned work → capital plan

Alternative Growth Projections and Work “Mixes” Can be Used in Alternative Scenario to Determine Sensitivity to Variations.


Facility Design & Composition Influences cost of facility (as part

of total business operation) Can consider spectrum of

“standard” facilities:• Regional Hub / Full Service

Operations Center• Satellite Operations Center• Job Site Reporting Center /

Emergency Operations Center Will need to define type of space

required and functions desired (materials storage, fleet maintenance, design coordination, and supervision) at each “standard” facility.

Model Inputs: Property Data

Data That Can be Used in Model Property Capacity (size) Property Development Costs

(new/expansions) Property Renovation Costs

(based on condition, current capital plan, or estimates)

Property Operating Costs Related Operating Costs

• Material Carry Cost/Site• IS Infrastructure Cost• Other/custom

Market Value (net value if sold, typically based on: Opinion of Value, less transaction, less Net Book, less estimated environmental, less relocation costs)


Model Outputs The Model Identifies the Optimum

Solution For Each Scenario.• Locations to Use.• # Crews per Location.• Coverage Area per Location.

Individual Scenario Results Can be Shown in Tables and Maps:

• Travel Times & Costs.• Property Sizes & Costs (to the degree

data is input). Multiple Scenario Comparisons Provide:

• Metrics on Change from Existing to Proposed Configuration.

• Quantification of Trade-offs Between Options.

Each scenario can be mapped to show the coverage area by location (left) and travel time from location (right).

Multiple scenarios can be compared (cost, travel time, crew deployment) to identify the relative benefits of each.Specific information of interest can include areas with changes in travel

time (left), system-wide travel time (center) and ideal locations for supporting functions such as warehousing (right).


An Iterative Approach Is Recommended

Run 1 – Assessment of Potential Opportunity • Use Readily Available Data.• Consider “Standard” Scenarios.• GOAL: Determine if Enough Value to Continue with Run 2.

Run 2 – Analysis of Selected Field Operations and Regions• Engage Business Unit.

• Alternative work projections.• Alternative business rules & scenarios.

• Assemble/Refine Property Data.• Site-specific renovation/expansion capability and costs.• Market values.• O&M costs.• Facility “templates”.

• Include Reviews and Revisions with Stakeholders.• Optional: Supplemental Analysis of Smaller Field Operations and Support

Functions (Fleet, Materials)• GOAL: Draft Proposed Strategic Plan(s).

Run 3 – Quantification of Refined Strategic Plan• Compare Baseline and Proposed Plan(s).• GOAL: Quantify Value and Issues for Final Decision.


Getting Started

Can do quick assessment (Run 1) to let you determine if there is enough of a value opportunity to pursue with further data collection, discussion, analysis.

All that is needed for Run 1 is: (preferably electronic)

1. Map of service area (existing districts good but optional).

2. Available work projection (typically use # of customers by zip code as proxy, can use sample year historical work or other).

3. Total number of crew FTE (by existing location good but optional).

4. Loaded cost/hour of crew FTE with equipment (can use estimate).

5. List of existing properties (with addresses or coordinates).

“Next Steps” discussion items (next slide) will need to be engaged before proceeding past Run 1.


Discussion: Next Steps

Are there established standards for “response time”?(i.e. % of customers or work trips within “x” minutes or “x” miles)?

Do you know how you currently stand on this by region ? Do you know how much of this is driven by HQ locations?

Is there a consistent philosophy of what is an operations center? Are the types of operations centers clearly defined?

(central vs. regional, hubs, satellites, etc.) Are there variations by Line of Business or region? Are Fleet and Material support operations integrated?

What data is readily available, or can reasonably be obtained? Crew information? Existing service area and sub-territories? Work projections? Existing/potential property locations and data? Existing property “templates” or variations? Current strategic plans and common business “rules”?

Is the Business Unit ready to participate?

operations center location model

Documents