Putting a Deferred Maintenance Plan Into Action

By Andrew Gager

June 2014

Results into action

The next step for managers is determining what to do with the results of the assessment. I suggest taking the findings and plotting them on a matrix. Managers can use a facility condition index (FCI) as a benchmark to compare the qualified condition of facilities and to build support for asset-management initiatives.

To create an FCI, managers need to quantify the cost of maintenance, repair and replacement deficiencies, as mentioned in the facility condition assessment earlier. This total cost of repair or replacement is then divided by the facility replacement value (FRV), which is the current monetary replacement value the organization places on the facilities.

Managers then can prioritize the results:

• Currently critical. These top-priority items are needs or projects that significantly impact the operation and require immediate action to return a facility to normalcy, stop accelerated deterioration, or correct a cited safety hazard, especially those conditions that pose a significant risk to health and safety.
• Potentially critical. These needs or projects will become critical within a year if not addressed in the short term — typically, less than a year.
• Necessary but not critical. These projects include conditions that require reasonably prompt attention to preclude predictable deterioration or potential downtime and the associated damage or higher costs if deferred further. This class falls into long-range planning when developing budgets for the next 5-10 years.

After this exercise, managers then can plot the outcomes to identify the items with the highest cost or risk. Managers then can use the corroborated data to build the business case for funding for immediate and long-range planning.

Most top executives do not want managers coming to them only with problems. So to successfully attack deferred maintenance, managers instead need to address issues and come prepared with solutions. As uncomfortable and frustrating as the task of tackling deferred maintenance might be, its prioritization is a hallmark of sound fiscal management.

Andrew Gager — a.gager@nexusglobal.com — is a principal consultant with Nexus Global. He has more than 28 years of manufacturing and facilities experience, ranging from warehousing operations to plant management. He is a registered CMRP, CPIM and Six Sigma Green Belt, and he is formally trained in change-management principles.

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