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Basic Research Techniques

Basic 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. 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 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. In fact, 20% stated that they spent over 5 hours between the two buildings (see Tables 2, 3, and 4, below). A copy of the survey form is attached as Appendix A. Table 3. Survey Results Questions 1-4 The company should be careful to understand that simply moving into one building doesn’t mean that productivity will automatically increase by 87%. However, it could mean that communication between associates would be greatly facilitated and there will likely be an improvement in efficiency (Dess). While it is difficult to put a price on efficiency, the purpose of this survey was to determine if there was a general preference one way or another before promulgating this decision. The actual cost savings of consolidating the two facilities into one is $60,100 in operating costs, plus a potential $151,800 in headcount reduction, totaling $207,900 per year. Since the savings are greater than the first years’ operating costs, SSB will actually be making money by consolidating their facilities. Savings of this magnitude can easily offset any expenses related to moving equipment, network, phones, and desks; especially when increases in productivity and employee satisfaction are thrown in as extras. Bibliography: Works Cited Cooper, Donald R., and Schindler, Pamela S. Business Research Methods. 6th ed. USA: Irwin McGraw-Hill, 1995. Dess, Gregory G., and Picken, Joseph C. Beyond Productivity. USA: American Management Society, 1999. “The True Cost of Moving.” PC Week Nov. 1998: 44.

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