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Facility owners tend to focus on the upfront costs of the project, but for many product categories, including flooring, the initial purchase price may account for less than one third of the total life cycle cost. In addition, a choice with a higher upfront cost does not necessarily translate into higher total life-cycle costs.
Life Cycle Cost Analysis (LCCA) is a powerful tool that you can use to demonstrate how design decisions will play out over the long term. LCCA provides a standardized method of assessing the total cost of product ownership, allowing you to compare the cost impact of different design choices.
First, let’s consider a whole building. According to the Whole Building Design Guide, the initial cost of construction accounts for just 2 percent of a building’s costs over 30 years. Operations and maintenance account for 6 percent, while personnel make up the bulk.
Similarly, a major design investment—furniture or decorative lighting, for example—may last for 10 or 15 years or more. The total cost of ownership includes the initial purchase, maintenance, replacement and disposal costs. Of these, maintenance costs are usually the highest, while over time, the original purchase price represents an ever-shrinking percentage. For example, the life cycle cost of 10,000 square feet of luxury vinyl tile flooring is roughly $194,000. Even at $6.00/square foot, the purchase price of $60,000 represents just 30 percent of the total life cycle cost.
Putting It All Together
Different space types of the same size may have identical product installation costs, but their life cycle costs may vary considerably, depending on factors such as occupancy and traffic levels, maintenance requirements, labor rates and space churn. Some design decisions—upgraded LED lighting and finishes with high reflectance values—can result in energy savings, which should be factored in as well.
Ideally, LCCA should take place early in the design process. Our flooring experts have developed a helpful method for you to estimate costs for each phase in a product’s life cycle. Download the whitepaper to learn more.
Sometimes finishes that cost more initially make up for their higher per-square-foot purchase price with savings in other areas, such as maintenance. If you also take into account the benefits that certain design choices can provide in terms of occupant comfort, you can build a compelling case for making the higher initial investment.
Here are some points to consider:
A low-maintenance product can save over the long run, even if it has a higher initial cost.
A more durable product will have a longer lifespan, delaying the replacement and disposal costs.
Timeless design choices can ensure that the product won’t be replaced as soon as it goes out of style.
Design choices that enhance occupant comfort and well-being will have a positive impact on sales, productivity and employee retention.
Design choices can impact other factors, such as lighting and HVAC energy use, and can reduce building operating costs.
Looking at these costs early on is key. An integrated design process can help capitalize on the synergies among space conditioning, lighting, natural ventilation and finishes.
This helpful infographic illustrates the many enduring benefits that can be gained by making design decisions with long-term value in mind.
We hope that this blog series has provided you with some helpful tools for educating your clients on the benefits of a design approach that takes the long view. These strategies provide your clients with long-term value, save them money, and result in the best possible environment for customers and employees alike.