The Logic of Facility Capital
We are all familiar with the capital administered today in the buildings, land, infrastructure, communication systems, computer hardware and networks, fixed assets, financial assets, consumable supplies, cash, and accounting records. These traditional tangible assets provide the facilities utilized by the business. R-pM organizes this capital as facility capital.
Logically all capital must be defined as performance solutions to be deployed and utilized to produce a specific result. The post on August 6, 2007, The Logic of Capital Management, provides the background.
Capital utilized by the business is organized into four categories
Capital utilized by the business requires different professional capabilities to be professionally managed, which organizes four categories of capital:
- Business organization, process, and data capital to manage capital that directly produces a result and cannot, generally, produce another result. Business capital requires business knowledge and analytical capability
- Human personnel, capability, and knowledge capital to support and develop the worth of human capital. Human capital requires human handling, development, and coaching capabilities
- Facility equipment, supply, and record capital to manage reusable and consumable tangible assets and records. Facility capital requires expertise with the specific capital and administrative ability
- Management strategy, tactics, and intelligence capital to plan results and performance investments, to keep on course, and to know opportunities and ward off threats. Management capital requires management analysis and research capabilities
All capital must be professionally managed as capital utilized to produce results.
Facility capital is organized into three classes to be integrated with other capital and produce a specific result
Facility capital is managed by a facility capital unit that is responsible for operating central facilities, developing and maintaining facility capital, providing facility performance solutions, and integrating facility capital with other solutions to produce results.
Business capital is the integrating capital for all other capital categories. All performance solutions; including facility equipment, facility supply, and facility records; are integrated with the business solution in their capital class. There are three classes of solutions:
- Readiness capital includes business organization capital and integrates human personnel, facility equipment, and management strategy with the business organization to be ready to produce a set of results
- Production capital includes business process capital and integrates human capabilities, facility supply, and management tactics with the business process to produce a specific result
- Information capital includes business data and integrates human knowledge, facility records, and management intelligence with business data to produce results and document results produced
When the capital is integrated with business capital in the same class, the business can be managed and operated efficiently.
So, altogether there are twelve solution types, when capital is properly categorized into four categories for professional management and support, and when each category is classified into three classes to be integrated with the business capital and utilized in the business to produce results.
Facility Equipment capital is professionally-managed to keep the business ready to produce results
Facility equipment includes all reusable physical assets utilized by the business. Facility equipment is readiness capital to keep reusable facilities in a readiness state to produce results. Physical capital that must be operated and maintained is facility equipment capital. Facility equipment includes traditional fixed and movable assets and property, all communication and computer hardware and networks, financial facilities, and other fixed reusable facilities.
R-pM manages facility equipment capital similar to today’s enterprise. The facility equipment result unit must plan and acquire the equipment solutions needed to produce specific results. Equipment must be maintained in a readiness state through operation and maintenance. Centrally operated equipment that is provides as a service, such as heating and air conditioning, telephone operations and network, enterprise computer operations and network, etc are operated and maintained as facility equipment. Facility equipment is managed by those with expertise in the particular equipment, be it machine operation and maintenance, computer hardware, software, and network operation, financial planning and management, communications operation, etc.
Facility equipment must be in place so the business is ready to produce sets of planned results, and normally is deployed full time to produce results in the set. Facility equipment capital is integrated with business organization, which defines the equipment needed to produce specific set-results. Facility equipment capital is managed by the result manager to produce results day by day. The result manager is supported by the facility equipment unit for any equipment breakdowns or problems.
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Facility supply capital provides capital consumed to produce a specific result
Facility supply capital provides the money, supplies, energy, and other facilities that are consumed in producing results. The facility supply capital result unit covers common 20th century functions such as purchasing, stores, current bank accounts, petty cash, and accounts payable. All supply consumption and costs are against results and are approved by the result manager. The facility supply capital result unit seeks to reduce costs and conserve energy by defining alternative sources to provide supply solutions at low-cost and in a socially-responsible manner.
Facility records capital documents performance solutions utilized and results produced
The business is documented as facility records capital including all result and performance solution documentation, approved business plans, financial and non-financial business transactions, and historical business records. R-pM provides one integrated business structure for management planning, capturing business data, and reporting. Records capital is maintained in computer data, images, and other forms; transaction documents, signed documents that obligate the business, copies of documentation produced on new results and performance, archives, etc. Information is maintained on all revenues and income, broken down as needed by contributing result values, all expenditures and costs incurred by the business, and positive and negative capital worth the know the worth of all assets and liabilities and the actual enterprise worth.
Plans and leading estimates are recorded for each time period for routine management reporting, project and campaign reporting, special occurrences, and other record solution needs. The facility records capital result unit produces routine management report solutions on actual business status against strategies, plans, goals, and expectations. The unit provides other solutions extracted from business records to enable new results based on business history, intellectual property protected, result and performance trends, etc. Facility records solutions are integrated with business data to provide needed access to business transactions involving a particular performance solution utilized or result produced.
Facility capital management incorporates corporate accounting. While R-pM provides complete and accurate business records, accounting compliance and reporting continues according to professional and legal requirements.
Facility capital provides the physical foundation for business effectiveness and quality
Facility capital has historically been considered the “capital” in business. Facility capital has historically been administered to keep it operating, record the location, and to protect it from loss. Capital utilization usually means being assigned to an organization unit, or in operation for a percentage of time.
R-pM manages facility capital to be utilized produce value in results. Utilization is directed toward the value-added to results. Facility capital solutions are designed to produce results to provide equipment and supplies tailored to the needs of the business and to provide record solutions needed to produce specific results.
The business must integrate facility capital with the business, keep facility equipment productive, provide timely supply solutions, capture all business data and documentation, and provide record solutions needed to produce business and management results.
