Tips to Reduce Property Operations Cost

Tips to Reduce Property Operations Cost

Blog Article

 Standardization was the lesson of the industrial age. Standardization can be the lesson of the 21st century for property owners, investors, and managers. There is a great deal value in the concept, but applying standardization is more difficult.

While a property is not an airline, the idea of achieving terrific results through standardization is demonstrated by Southwest Airlines. Southwest Airlines only uses a single airframe reducing maintenance times, saving cost inventory, and speeding service turn around. Southwest only operates from smaller airports for hubs and as a result enjoys extremely short periods on the ground between flights. Southwest Airline has devised a loading and unloading program that results in very short period from the beginning of boarding to takeoff. As a result, Southwest Airline is able to get an additional flight from every aircraft in its fleet every single day. This results in a greater than 10% cost advantage over the competition.

If you are acquiring existing properties, building new properties, managing properties, a focus on standardization over time will reduce labor costs, equipment costs, and material costs.

The key to this concept is to apply standardization to all elements of the business. Standardize office formats. Standardize equipment for the maintenance staff. Use standardized inventory for materials. Select buildings that have consistent construction, materials, and support needs. Standardize customer management and services.