Basic Research Techniques

Basic Research Techniques

Data Analysis & Research Techniques

Currently, the organization operates two buildings approximately 3 miles apart with a combined operating cost of $256,100 per year. These operating costs include lease expense, garbage and recycling services, security, janitorial, taxes, power, water and sewer, insurance, gas and printed materials. These costs could be reduced if the company were to consolidate into one facility.

Table 1. Cost Comparisons

Item Building A Building B Subtotal A&B Unified Building C

Lease $32,000 $12,000 $44,000 $40,000

Garbage $8,000 $5,000 $13,000 $9,000

Security $4,000 $4,000 $8,000 $4,000

Janitorial $6,000 $6,000 $12,000 $8,000

Taxes $8,000 $8,000 $16,000 $8,000

Power $52,000 $41,000 $93,000 $70,000

Water & Sewer $16,000 $12,500 $28,500 $22,000

Insurance $5,000 $5,000 $10,000 $7,000

Gas $13,000 $11,000 $24,000 $23,000

Printed Materials $3,800 $3,800 $7,600 $5,000

Totals 147,800 108,300 $256,100 $196,000

cost per sq. ft (mo) $5.68 $5.55 $5.63 $5.16

Number of Employees 80 40 120 117

Total Sq. Ft. 26,000 19,500 45,500 38,000

As shown in Table 1, the total operating cost for the consolidated facility would be $196,000 per year. Each employee requires at least 200 square feet (True Cost), but the need for public spaces such as hallways, kitchen area, restrooms, etc. would be reduced, so SSB can operate with less total square footage than with the two separate buildings.

Unifying the facilities could save $60,100 per year in operating costs. Also, the costs of office supplies and printed materials could decrease. The company could also eliminate three positions, which is one of the bigger savings an organization can make (True Cost). Table 1 includes this reduction in force.

Consolidation would bring some of the same functions together under one roof, creating some duplicity in duties, and the company could elect to eliminate these three positions: one receptionist, one mailroom clerk and one janitor. The savings to the company would include the wages, benefits, and the cost per square foot for their personal space. This study shows that the cost per square foot will decrease from $5.63 to $5.16 per month, so if each employee were allotted 200 sq. ft (Dess), then the annual cost savings by eliminating three positions alone would be worth $1,800. Their salaries and benefits come to nearly $150,000 between the three of them; therefore, the aggregated savings through eliminating these three positions could total $151,800 per year.

As observed in a random survey of 70 employees, nearly all surveyed agreed that the distance between buildings was creating productivity issues for them. Eighty-seven percent replied that they spent over 1 hour per week traveling between the two buildings.