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Why Doesn't Management See The Value Of Preventive Maintenance?

Written by  Ryan Noble

28691c5bb73714ada00e7b66402951e5.jpgPreventive maintenance is a tough thing to convince management to invest in because you can't see it. Pushing for a
budget on something that isn't easily quantifiable is a hard sell in itself, but when you can't even see what you're buying, it's even worse. Fortunately, there are enough reports on the ROI and benefits of doing PM that, with a bit of persuasion, can make it easier to pitch to upper management.  Here a few of the common barriers.

Barrier #1 -  PM is just now becoming common for facilities

PM has been a common function for manufacturing maintenance teams for decades. So why not in facilities?  The answer is facility equipment usually only generates frustration or discomfort when they break down. If a production asset goes down, there is an immediate loss of time and production opportunity which can translate into big $$$. Eventhough fixing a facility breakdown is more expensive than PM, just the same as production, the losses from a production asset are often more severe.

Barrier #2 - Low priority for management

Because equipment isn't guaranteed to fail without preventive maintenance being performed, other investments are usually given priority. Proactively spending money to prevent breakdowns that may or may not happen can create problems for management, even if they see the value in PM. The best way to get over this barrier is to propose a scenario where an expensive facility asset goes down and share the costs (direct and indirect) of replacing or fixing the asset versus the cost of a regular PM schedule. Running the numbers to present a solid case will help sway management.

Here is a table to help your initiative. It shows the average return on investment (ROI) for several pieces of facility equipment. This table was part of the study, "Determining the Economic Value of Preventive Maintenance" by Wei Lin Koo and Tracy Van Hoy, 2000. If you have time, read through the results of their study.

Equipment

ROI

Air Compressor

230%

Air Handler

100%

Boilers

850%

Centrifugal Chillers

1,100%

Reciprocating Chillers

400%

Cooling Towers

550%

Condensers (air cooled)

1,050%

DX Units

1,800%

Fire Detection Systems

10%

Centrifugal Pumps

2,300%

Fire Pumps

50%

Switch Gear

700%

Parking Lots

900%

Roofs

350%

 

Barrier #3 - Little short term ROI

PM return isn't realized right away and like I stated earlier, it's not something that you can see. It's a long term investment that will show return in fewer costly maintenance repairs and efficienct equipment operation. Because there is little short term payback, other cost saving or productivity boosting projects might have priority with management such as new energy efficient lighting systems, new window installs, or new computers. If there is no chance of getting a PM budget, start with a few pieces of equipment (use the table to find one's with the largest PM ROI) and build on it over time.

Preventive Maintenance Checklist Worksheet

Here are some other helpful articles:

5 Reasons To Do Preventive Maintenance

Infographic - What Are The Types Of Maintenance?

Choosing The Best Lubrication For Your Equipment

Topics: Preventive Maintenance, Tips n' Tricks