Facilities Management Costs: What We Used to Think
Hard FM operations—HVAC systems, electrical networks, plumbing—are notorious for their unpredictable costs. Many contractors believe these expenses are unavoidable: reactive repairs, emergency replacements, sudden breakdowns. Maintenance was often seen as something you dealt with only when it came up.
Then we started tracking equipment usage and maintenance history using structured preventive maintenance processes. The results told a different story.
The Shift: What Changed
Preventive maintenance processes have been shown to reduce breakdowns and improve cost predictability. Industry reports, such as those from Financial Times, indicate that reactive repairs are significantly more expensive than preventive upkeep over time. This aligns with the broader understanding that proactive maintenance minimizes unexpected failures and associated costs.
Why Reactive Maintenance Persists
It’s easy to see why many contractors stick with reactive models. It feels cheaper upfront. Preventive schedules require investment in tracking tools, staff training, and oversight. There’s also a mindset hurdle—why spend time maintaining something that hasn’t failed yet?
However, reactive maintenance often leads to higher long-term costs, including repair expenses, SLA penalties, and potential loss of contracts due to downtime.
Steps to Implement Preventive Maintenance
Here’s a general process for implementing preventive maintenance:
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Log Equipment Usage: Track usage hours and productivity for each machine. This helps identify underutilization and wear trends.
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Schedule Preventive Maintenance: Create maintenance schedules based on usage data. For example, an HVAC unit might need servicing after a specific number of operational hours.
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Track Fuel and Consumables: Implement workflows to manage spares and consumables efficiently, reducing waste.
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Allocate Costs by Usage: Distribute maintenance expenses across projects based on equipment usage to maintain accurate job costing.
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Automate Depreciation: Use tools to automate depreciation schedules and journal entries, ensuring accurate financial tracking.
The goal is to reduce downtime, predict maintenance costs, and minimize emergency repairs.
Challenges and Considerations
Reactive repairs can lead to significant financial losses and operational inefficiencies. Untracked maintenance history may result in repeated mistakes, such as ordering incorrect parts or over-maintaining newer equipment. While the upfront investment in preventive maintenance tools and processes can be substantial, the long-term benefits often outweigh the costs.
Preventive maintenance is a proven strategy to optimize costs and improve efficiency in hard FM operations. By adopting structured processes and leveraging appropriate tools, facilities managers can achieve better outcomes and reduce operational risks.
