Supply and demand analysis

In space planning, supply and demand analysis is a fit or gap analysis across time of the demand for business space and the supply of buildings or space in the current or planned portfolio.

Real estate decisions include whether to lease a building, buy a building, end a lease, or sell a building. Too much space or too little space results in increased costs, both capital and operating, and a productivity impact on the core business. Real estate decisions and the ensuing transactions typically require long lead times. Understanding the business unit needs and objectives (the demand) and comparing that demand to the available facilities (the supply) provides a future look at portfolio needs.

During supply and demand analysis, you use the organizational space requirements forecast data to determine whether the planned space inventory fits the business requirements of quantity, quality, type, and timing.

The input to the process includes the following information:
  • Location area and capacity forecast
  • Organization required area and capacity forecast
  • Facilities management standards
  • Scope of analysis (planning period range, geographies, organizations, space class types, locations)
  • Historical organization capacity requirements
  • Historical location capacity data
Outputs include the proposed location area and capacity changes, which might be to retire a location, to extend a lease, or to acquire or construct a location.

Supply/Demand Analysis tool

The Supply/Demand Analysis tool is accessed from the Analysis tab of the Scenario. The Supply/Demand Analysis function is a chart that is embedded directly within the scenario. The chart provides a combined view of the supply and demand planning data across time.

The supply data is represented as a stacked bar graph where area is stacked vertically based on the building or lease. The demand data is represented as a line graph that overlays the bars. This graph shows how the supply of space or area matches up against the demands of an organization.

With this tool, you can interactively analyze scenario options to match forecasted business demand to portfolio space supply across planning periods. The graphical analysis tool helps with the following tasks:
  • Visually detect supply-demand gaps that require planning actions to meet demand or to improve portfolio utilization.
  • Analyze what-if supply-side actions for lease contract options, new building expansions, or portfolio consolidations.
  • Investigate the implications of demand-side changes to match supply or close gaps.

Adding and removing supply

You can add new supply by clicking the Add Supply action on the Supply Summary section of the Analysis tab on the scenario.

When you select the building class in the supply definition, IBM® TRIRIGA® populates the other fields in the Details section with values from the Building Class standard. These values are used in scenario evaluation metrics. You can adjust any of the numbers to better reflect any known information relative to a city area or building type. IBM TRIRIGA uses step-up rules to convert the total area in the Supply Breakdown section to Usable, then up to Rentable, and then to Gross. For example, if the total Area is 10,000, the Usable Factor is 0.25, the Rentable Factor is 0.35, and the Gross Factor is 0.20:

Assignable Area * (1 + Usable Factor) = Usable Area
10,000 * 1.25 = 12,500

Usable Area * (1 + Rentable Factor) = Rentable Area
12,500 * 1.35 = 16,875

Rentable Area * (1 + Gross Factor) = Gross Area
16,875 * 1.20 = 20,250
In the Units section, IBM TRIRIGA populates the Area Units, Currency, Carbon Reporting UOM, and Energy Reporting UOM values from the Units section on the scenario.

If you choose to remove an added supply after any organizations are included in the added supply, IBM TRIRIGA does not remove the added supply. You must reset changes in the stack plan before you can remove an added supply.

Take action

The purpose of the Take Action function is to provide a mechanism for studying the implications of altering an existing supply. The available actions depend on whether you are working with a lease or owned building.

For a leased building, the choices are Extend and Terminate. For an owned building, IBM TRIRIGA populates Action with Sell. The Extend function also extends the lease supply block in the stack plan for the focus periods included in the extension. The Terminate or Sell actions also remove the supply block from the stack plan in the focus period after the termination or sell date. Any demand blocks that were on the supply block are flagged with the over-allocation icon.

As a result of an action, TRIRIGA Strategic Facility Planning updates the supply summary and appends the supply change to the supply and demand graph. TRIRIGA Strategic Facility Planning also adds a line item in the RE Action Requests section.

You can also cancel an action to have the line item removed from the RE Action Requests section.