Many companies don’t have a planned maintenance strategy and are paying the price. The trouble is, it’s not always obvious what that price is. What's the true cost of a reactive vs a planned approach? The costs of reactive maintenance in labour and materials can be clearly seen in a company’s accounts. But there are other costs involved in a reactive approach that might only be felt in the business’ bottom line.

1. When downtime shuts down a business

What’s the effect of unexpected equipment downtime on the business as a whole? In some companies when a piece of equipment becomes suddenly unavailable it can effectively shut down operations, leading to a significant revenue hit. In these cases it’s not just the engineer call-out charge that represents a cost, it’s all the knock-on effects to productivity and profit.

2. When downtime has unexpected consequences

A reactive maintenance policy may just be providing a patch, when what is really needed is a complete overhaul. That piece of equipment in the gym that’s always breaking down and unavailable? It may be adding reputational damage to an ongoing maintenance cost. The hidden cost of lost visits, purchases and gym subscriptions resulting from poor customer experiences may go officially unrecorded, but they’re still there.

3. When overtime pushes your budget over the edge

Unplanned, reactive maintenance can be an expensive business. There may be someone with expert knowledge in your team who you need to inspect a piece of equipment, whatever the cost. That line will appear in your budget, but is the overtime avoidable?

4. When assets don’t deliver

If you’re not running a PPM programme, the stats say you could be shortening the life expectancy of your assets. If you don’t perform regular, planned maintenance, they can deteriorate more quickly. Meanwhile, frequent and inexpert reactive repairs can actively shorten their lifespan.

5. When compliance is put at risk

A strategy of reactive maintenance can leave you exposed to the risk of avoidable equipment failures. When these failures lead to H&S incidents they can have serious consequences. Fines and claims against the business, as well as bad publicity resulting from an incident, can seriously impact your bottom line.

6. When energy costs go up

Focusing on equipment that’s already gone wrong can mean you miss less noticeable problems that are still having an impact. Appliances that are getting old and wearing out often consume more power as they work harder to do their jobs. This can generate surges of electricity, which can further damage an ageing machine and increase energy bills. The costs of running inefficient equipment is often felt, but not often ascribable to a particular asset or event. A reactive maintenance approach might mean you only get to see the problem when it’s too late to sort out and is a more expensive problem.

But reactive maintenance isn’t the problem

Reactive maintenance is just a fact of life. Things will always go wrong and they’ll always need to be fixed, no matter how well maintained they are. And not all reactive maintenance is emergency maintenance, anyway. For example, when a team member has noticed that something is not quite right and asks for it to be fixed before it stops working altogether. This work can usually be planned in advance so won’t be as disruptive to your operations.

But the problem comes when you are only performing reactive maintenance. This is where you may be unknowingly losing a lot of money, letting an iceberg of unnecessary waste grow unseen beneath you.

Strike a balance between unplanned, planned & preventative maintenance (PPM)

In an ideal world businesses should be balancing unplanned and planned maintenance tasks (including PPM), to ensure that equipment is performing as expected and maintenance resources are being used wisely.

This approach means equipment is regularly optimised, as well as preventing unexpected failure and unplanned engineering costs.

What’s the right ratio?

According to industry experts, the right balance to strike is 75% (planned maintenance) to 25% (unplanned maintenance)

And 50% to 90% of that planned work should be preventative maintenance. That is routine, scheduled work designed to keep your business running smoothly and extend the life of critical assets

Done right, PPM can reduce your overall maintenance costs by up to 18%.

What’s stopping you?

But achieving this level of efficiency within your operations can be a challenge. And it is usually lack of the right digital tools that prevent FM teams making that next step.

For teams that are still using email, phone and spreadsheets to organise maintenance activity, even keeping track of reactive work can be tricky. If you start adding in the complexity of scheduling recurring work, co-coordinating site visits while sharing data collected on-site, then those Outlook and Excel solutions quickly begin to buckle under the strain.

What’s the alternative?

What do you need to do the job? CAFM solutions with long installation times and complex configuration requirements? Acquiring and setting up FM software can seem like a huge commitment, requiring so much time and resource to apply to your operations that ROI from PPM remains a distant prospect.

Facilities Management teams often understand the benefits of better maintenance planning but they can’t see the practical steps they need to take to effectively streamline their operations within realistic time frames.

But with a new breed of flexible cloud-based CAFM solutions on the market we are seeing quicker and better outcomes for businesses who want to make this journey. And it’s not always about implementing wholesale change straight away.

You don’t have to run before you can walk

Break down the journey to Planned Preventative Maintenance into manageable steps.

Find the tools that can bring rapid ROI to your business through prioritising selected features:

  • Introduce digital controls for reactive maintenance processes first
  • Get your help desk software functioning:
    • Improve your communications
    • Introduce an engineer/contractor portal
    • Automate workflows to improve efficiency
  • Layer on PPM and compliance features to increase controls

Look for the right support to get the business behind the move:

  • Usability of software to ensure maximum uptake
  • Simple configuration - hours or days to set up - not weeks or months
  • Supplier who can consult and help you build a plan to meet your goals
  • Reporting to track your success 

It might be an incremental journey, rather than an overnight transformation. But, if you want to control the size of the ‘iceberg’, the unknown part of your budget being eaten up by preventable failure - then you need the digital tools to make it happen.

How to choose a CAFM system

Josh Greibach

Written by Josh Greibach

Josh Greibach is the CEO & Co-Founder of Expansive Solutions. His passion is delivering value through data-driven strategies. With a proven track record in leading successful teams for both B2C and B2B, Josh now focuses on rocking the world of facilities management with his FM software. He's here to revolutionise the industry and help businesses thrive in our digital-driven world.

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