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ASSET MANAGEMENT

Our Asset Management Program (AMP) is a Risk Management and Critical Analysis system to arrive at good business decisions for our clients. The benefits of the AMP are as follows:

  1. Identifies upfront, costly fatal flaws in a Business Plan or specific business objective.
  2. Defines the relative risk and associated probable costs for selected business scenarios in support of Business Planning.
  3. The AMP is a self-sustaining process designed to fit your specific business needs.

The bottom line is that the AMP system saves you money and manages business risk.

The System

The AMP system consists of the following nine operative elements:

  1. Critical Analysis of Business Objectives or Needs.
  2. Quantification of Assets (Liabilities).
  3. Analysis of the Relative Risks Posed by the Assets.
  4. Critical Re-Analysis of the Business Objectives.
  5. Modification of the Business Objectives.
  6. Development of Activities to Achieve the Business Objectives.
  7. Quantification of the Costs and Risks of Implementation.
  8. Fine Tuning of the Plan Activities, Costs, and Risks.
  9. Execution and Compliance Assurance.

The AMP system is based on sound business and scientific critical analysis using factual data, standardized protocols and modeling software. Although we are passionate about the benefits of the AMP system, the system does not respond to emotion or political agendas. As such, the system outcomes represent stark reality.

When is the AMP Used?

By way of example, the AMP system is used for the following purposes:

  1. Assessment of Individual Sites for Development and/or Reuse.
  2. Acquisition, Modification and/or Divestiture of Physical Assets as part of Portfolio Management.
  3. Integration of Facilities, Cost Accounting, Construction, and Business Development Departments.
  4. Screening of Multiple Sites for Development and/or Reuse.
  5. Selecting Cost-Effective Development Strategies on a Site-Specific Basis.
  6. Assessment of Project Development Funding Options.

The AMP system is flexible to accommodate specific needs and settings. We continue to adjust the AMP system protocols based on experience which serves to enhance the power of the system.


What Are the AMP System Outputs?

The AMP system outputs consist of a series of tabulated input data, score cards of risk, probabilistic model results of cost by activity or scenario, and ranking of the outcomes based on cost and risk. Elements such as cash flow, return on investment, and schedule are incorporated into the critical analysis. These outputs are incorporated into a Report of Findings and Recommendations for consideration by the client.

The AMP system is dynamic, self-fortified through the critical analysis process, and requires intimate ongoing communications between us and you, because after all, the system is being created for your ongoing use and perfection.

Case Studies

A. Company A is engaged in the development of commercial/residential elder care centers which necessitates the evaluation of individual sites selected by others based on demographics, market pressures, and other economic factors with a focus and bias toward operating revenue. Company B is tasked with the site selection, due diligence, acquisition, site plan approval, and design/construction of the facility under a separate proforma. Working with Company B, we used the AMP critical analysis process to determine the time-cost of site selection through construction. Our findings resulted in a redraft of the proformas for Company A and Company B for the entire project. The business realities expressed by the AMP analysis resulted in the pursuit of another site within the target demographic area.

B. We were contacted by a charitable foundation to assist with the development of about 70 acres of waterfront within a heavily industrialized area. The land mass was comprised of about 30 individual properties, independently owned. Working with the client, we used the AMP system to derive a plan consisting of pre-acquisition environmental due diligence, whereby liability protection and costs to restore the land and/or buildings were developed; acquisition of public funding (Brownfield Grants and Tax Increment Financing were utilized); and permitting associated with construction including marine shoreline improvements. Following redevelopment, the AMP system was used to identify ongoing regulatory compliance obligations, develop compliance tools and calendars, and create a self-sustaining compliance program to minimize and internalize the associated costs. The AMP process was also used to analyze the portfolio and set forth a plan for divestiture to achieve the foundation’s charitable objectives, and increase the cash reserves.

C. We were contacted by a developer who was interested in a site due to its location but was concerned because of known environmental contamination, the presence of a building that needed to be razed, and ongoing migration of contamination onto the property from an adjoining property.

Using the AMP system, we developed a plan to assess the nature and extent of the contamination, design a subterranean barrier to prevent the migration of contamination onto the property, and demolish the building without exacerbating the existing contamination. The AMP findings presented a time-cost line, relative risk, and sensitivity analysis which was used in developing the proforma, and the construction schedule. The AMP analysis indicated that the short and long term risks could be managed cost effectively using the above-noted approach, and the project was successfully executed using the AMP plan.

D. A large utility company contacted us regarding our AMP system because they needed a means to decide what properties and/or buildings they should retain, modify, divest, or acquire to satisfy their business objectives. We are currently working with company personnel in obtaining the raw data necessary to complete the Critical Analysis. Preliminary findings indicate a wide spectrum of risks and costs associated with the existing holdings in terms of matching these assets with their business objectives. The AMP analysis will result in a prioritization of these holdings based on relative risk and cost to achieve the stated business objective.

E. A private company was considering development of a “Brownfield Site” using Tax Increment Financing because they understood the remediation costs to be otherwise prohibitive (i.e., millions of dollars). We were contacted to analyze the situation and recommend a course of action. Using the AMP process, we determined that the basis for the remediation cost estimate was fundamentally flawed and the actual projected remediation costs were substantially less (less than $100,000). The AMP analysis also indicated that the public funding process would delay the construction of the facility and be more costly than if the project were funded without Tax Increment Financing.

F. A company was looking to expand its industrial operations out-of-state and needed to decide whether to lease and/or purchase existing facilities engaged in similar processing of goods or construct new operating plants. We began the AMP process of analysis by requesting raw data regarding physical asset needs including transportation, operating parameters including permits and costs, financial proforma information including cash flow projections, and schedules, etc. We also identified with the client, critical path Business Plan issues and objectives representing go/no-go points, off-ramps, schedule, capital and operating costs, liability, or rate-of-return.

With this information, we performed the AMP analysis and determined that there were existing facilities with similar operating systems, good facilities management and physical assets, and limited trailing liabilities, with public funding available for environmental liability assessment, and favorable liability protection, with a lease and option to buy. Other sites and options were considered in the analysis, but only one made good business sense. Based on the AMP analysis, the Business Plan was modified to include protracting growth projections for better cash management.

The aforenoted case studies emphasize the flexibility of the AMP system and the complexity of the analysis is an expression of the business needs and input data quantity and quality. The power of the AMP is the identification of critical flaws or data needs early before expenditure of significant resources in the wrong direction, the systematic management of the data, and clear expression of the outcomes.

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Corporate Headquarters: 19849 Middlebelt Road, Livonia, Michigan 48152 T: 248.477.5021   F: 248.477.6971