Know The Difference Between Repair And Maintenance
Repair and maintenance are two very important terms in the asset management space.
Whether we are talking about commercial airplanes, the fleets on the road, big manufacturing equipment, or that small property in the suburbs you rent out, maintenance and repair is how we keep any physical asset running optimally and able to fulfill its purpose.
What is the difference between repair and maintenance?
In essence, repair and maintenance have the same end goal: get the most useful life out of the tools, equipment, and infrastructure we use. However, the way they go about achieving this goal is very different.
The definition of repair
Repair is an action we take to restore an asset to proper working conditions.
The level of repair we need to perform corresponds to the level of failure that is causing asset malfunction. We can differentiate between two basic types of equipment failures:
Partial failure: The asset can generally still be used, but it doesn’t offer full functionality and might be unsafe (for example, a car with bald tires or broken AC). Oftentimes, the maintenance team can perform quick corrective actions to restore the equipment to full functionality before the identified issue leads to complete failure.
Complete failure: The asset can’t be used until it is repaired. The amount of resources that will be spent on the repair will depend on the root failure cause that needs to be addressed. If we return to the car example, there is a big difference between changing a flat tire and replacing the car engine. Both cause complete failure, but the time and money you will have to spend on repair are like night and day.
Equipment breakdowns can be very expensive. Some are the results of human error, freaky accidents, and natural wear and tear that happens over many years of use. Those factors are impossible to control.
That being said, most breakdowns (and subsequently major repairs) are preventable – which leads us to (proactive) maintenance.
The definition of maintenance
Maintenance is often used as an umbrella term that covers all maintenance work we perform on our assets. This includes maintenance activities like:
As you can see, performing repairs can technically be categorized under maintenance work. When used together in a sentence, the easiest way to differentiate between repair and maintenance is to think about “repair” as something that happens after an asset experiences failure, while “maintenance” generally refers to maintenance actions that are performed to keep assets in good operating condition and try to prevent unexpected machine downtime.
The long-term costs of maintenance and repair
Businesses that rely heavily on physical assets can spend a big chunk of their operational budget on repairs and maintenance. Enterprises often classify these expenses under Maintenance, Repair & Operations (MRO) costs.
The total MRO costs you will see at the end of the year will depend on the following factors:
the number of assets and the size of the facility that needs to be maintained
how expensive are the equipment and infrastructure to maintain and repair
the amount of proactive vs reactive maintenance work an organization is doing
Let’s focus on the last point as it is the least obvious and most relevant for our discussion.
There is a consensus in the maintenance industry that it is better to focus on proactive maintenance strategies (like preventive maintenance and predictive maintenance) as every dollar invested in preventing failures results in 3+ dollars saved on reactive maintenance (repairs) later on.
In an effort to be more proactive and reduce operational costs, maintenance and facility managers are implementing CMMS systems at an increasing rate. They use them to schedule planned maintenance and automate their maintenance operations.
No matter how much time and money we spend on maintenance, sooner or later, assets will stop being cost-effective. When an asset is nearing the end of its lifecycle, there comes a point when buying a new asset makes more sense than trying to keep the old one alive. When working with aging assets, maintenance professionals should consider running a repair vs replace analysis. It is another chance to reduce repair and maintenance costs by thinking long-term.
Repairs and maintenance expenses in property management and accounting
Businesses and rental property owners can deduct certain expenses for repairs and maintenance of their property and equipment. It all depends on the current tax rules and what type of maintenance expenses we are talking about (betterments, restorations, and adaptations can’t be deducted while routine maintenance and repairs can).
Maintenance and repairs are an integral part of the lifecycle of most physical assets. For those that are looking to maximize the useful life of their equipment and infrastructure, they need to focus on routine maintenance. Repairs can’t be fully eliminated, but they should never be a daily occurrence.
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