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An Introduction to Whole Life Costs and Sustainability

An Introduction to Whole Life Costs and Sustainability. Content. Definition of WLC The 3 Elements of Sustainability Where Does WLC Fit In? Why Should Clients Care? Why Should You Care? What We Need To Do? Where WLCF Can Help?. Definition of WLC.

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An Introduction to Whole Life Costs and Sustainability

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  1. An Introduction toWhole Life Costs and Sustainability

  2. Content • Definition of WLC • The 3 Elements of Sustainability • Where Does WLC Fit In? • Why Should Clients Care? • Why Should You Care? • What We Need To Do? • Where WLCF Can Help?

  3. Definition of WLC Whole Life Cost is the analysis of all relevant and identifiable financial cashflows regarding the acquisition and use of an asset.

  4. 3 Elements of Sustainability Social Economic Environmental

  5. 3 Elements of Sustainability Social Economic Environmental

  6. 3 Elements of Sustainability Social Economic Environmental Unattainable

  7. Social Economic Environmental Activities in Sustainability Whole Life Cost Aesthetics Materials

  8. Where Does WLC Fit In • Next Step in Continuous Improvement • First Step in Sustainability • May Already be Doing It (Sort Of) • Easily Understood • Financial and Operational Gains

  9. Whole Life Cost Ratios Capital Cost Cost in Use Business Costs 1 : 5 : 200 Source.: "The long term costs of owning and using buildings" – published by The Royal Academy of Engineering (November 1998). Capital Cost Cost in Use Cost to Business 1 : 5 : 200 -100k : +£500k : +£20m

  10. Design Build Operate Dispose Total Run / Maintain £ 40% 100% Cost of Ownership Repair £ 30% £ ?% £ 3% £ 17% Periodic Replacement / Refurbish £ 10% 1 Year 2 Years 25 Years 1 Year Total WLC – The Big Picture Source Gardiner & Theobald

  11. WLC Rules of Thumb

  12. 5% 7% 10% 31% 20% 27% Revenue Cost Breakdown • Energy • Cleaning • Maintenance • Admin Services • Security • Admin and Management Insurance

  13. Compulsion Climate Change Levy Carbon Trading PFI Conditions Funding Concern for Environment Curiosity Competitive Advantage Profit Why Should Clients Care?

  14. Why Should You Care? • Leading Role in Industry • Understand New Concepts • Concern for Environment • Competitive Advantage • Profit

  15. What We Need To Do • Adopt Performance Specification • Consider the Costs in Use for Asset Selection • Take Small Steps - Progress Slowly • Understand What You Have Achieved • Benchmark

  16. Where WLCF Can Help • The web based WLC Comparator Tool • Common Data Structures • Common Calculation Methodologies • Access to Database • Optioneering • Benchmarking • Credibility • Accreditation • Help - You Are Not Alone

  17. Some Useful Web Sites • Whole Life Cost Forum • www.wlcf.org.uk • Training • Definitions • Guidance • Access to the Online Tool

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