Deferred Maintenance: Definition, Cost, and How to Keep it in Check
Contrary to how it sounds, deferred maintenance can be useful. It just depends on how you use it.
Maintenance managers often work with limited resources. At some point, you will have more work to do than you can manage. This will force you to postpone maintenance tasks and put them into a maintenance backlog to be completed later.
If used strategically, deferred maintenance can help you prioritize maintenance tasks, helping your team achieve more. We’ll show you how to do it right.
What is deferred maintenance?
Deferred maintenance is postponing maintenance work to at a later date due to the lack of necessary resources.
Whether it is an unexpected issue or a routine preventive maintenance task, if you do not have sufficient resources to do it, it will have to wait.
Examples of deferred maintenance
Deferred maintenance can show up in a wide variety of industries and maintenance applications. Let’s look at a few examples.
Deferred maintenance in real estate
Deferred maintenance in the real estate sector can have real financial impacts.
Selling a home that has been neglected can be a challenge, negatively impacting the home’s value and your ability to close its sale.
Deferred maintenance in production manufacturing
Preventive maintenance tasks and current work orders have been prepared and assigned across your maintenance team. However, a machine operator error has caused an issue that stopped an entire production line.
As downtime and financial losses accumulate, it becomes an all-hands-on-deck situation for your maintenance team until the breakdown is resolved.
All other pending preventive maintenance tasks are a lower priority and are therefore added to the backlog.
Deferred maintenance in facilities
Every three months, you have a scheduled preventive maintenance reminder to change all the HVAC filters in your 10-story building. While you have ordered the necessary filters, they did not all arrive on time for you to complete the change as scheduled. Therefore, replacing the remaining filters gets added to the deferred maintenance backlog.
What is a maintenance backlog?
A maintenance backlog is the list of tasks and work orders postponed to a later date due to the emergence of higher-priority work and a lack of maintenance resources.
Many of the tasks on your backlog end up being preventive maintenance tasks. They are not urgent when scheduled, but they are essential to the safety and functionality of the equipment.
Preventive maintenance tasks are not optional, but other priorities can easily supersede them for a team with slim resources. And if the backlog grows too big, it can be challenging to catch up.
Common causes of deferred maintenance
All organizations face challenges unique to their situation. But there are some common issues that lead to heavy maintenance backlogs.
Lack of a maintenance program or strategy
One of the main reasons a maintenance task may get pushed onto the backlog is because other more urgent priorities get in the way.
If your organization relies too heavily on reactive or corrective maintenance, this becomes the norm. You can be caught in the loop of constantly evaluating priorities in order to address the most urgent need, and end up deferring the rest.
Save yourself the trouble by implementing a preventive maintenance plan or a predictive maintenance program.
Poor inventory management
Whether you have a proactive maintenance program in place or not, you must ensure that you have the tools and parts on hand to complete maintenance work.
Striking the balance between having enough on hand but not wasting money on parts you don’t need is difficult.
Take the effort to implement an efficient spare parts management process so your maintenance backlog doesn’t get bigger just because your technicians have nothing to work with.
Lack of needed skills
If maintenance technicians don’t have the skills they need to complete their work, it will lead to inefficiencies or repetitive work.
Ensure they have the tools to do their job in the form of maintenance training, maintenance checklists, and other information like equipment maintenance logs.
For jobs or equipment that require specialized skills that you do not have on your maintenance team, ensure you have established relationships with the right vendors so they can jump in when needed.
Lack of needed manpower
Sometimes the issue is as simple as not having enough people to do what needs to be done. If maintenance tasks and overtime hours keep piling up, it is safe to say you fall in this category.
Leverage any maintenance reports you have in your CMMS to demonstrate your teams workload. Efficiencies can be gained through many strategies, but eventually, you may need to make the case for growing your team to meet the need.
Lack of funding
Lack of funding is often a common thread tying all the above issues together. If top management is unwilling to budge and provide more resources, you are left trying to optimize maintenance workflows to cut costs.
If you are in this boat, take a look at how a good CMMS can increase productivity and reduce maintenance costs while keeping you on top of your maintenance.
Costs and consequences of a poorly managed deferred maintenance backlog
Regular maintenance ensures the safe and efficient functioning of your facilities and equipment. That is why we do it in the first place.
Therefore, we can assume that putting off or postponing regular maintenance will have the opposite effect.
- Research from The Geaslin Group suggests that deferred maintenance will often result in exponential costs that can quickly escalate out of control.
- Rick Biedenweg, the President of Pacific Partners Consulting Group states that “every dollar of deferred maintenance will eventually cost $4 in future capital renewal.”
Here are some of the most common reasons why.
If your organization calculates metrics like overall equipment effectiveness (OEE) or machine efficiency (or even if you don’t), you will find that slacking on regular maintenance reduces how well your equipment works.
Increase in breakdowns and repairs
Continuing to use equipment without giving it the regular maintenance it requires is a surefire way to accelerate deterioration. It is a poor way to handle asset management.
Compounding damage will ultimately lead to the need for increasingly frequent and costly repairs, lost production due to downtime, and a shorter asset lifecycle.
Risks to health and safety
Maintenance isn’t just about efficiency and avoiding breakdowns or complete system failures.
It also ensures that equipment doesn’t pose safety hazards or health risks to your team. And the safety of your team should always be the highest priority.
Legal and regulatory risks
If you do not maintain your equipment or facilities properly and the unthinkable happens as a result, the fines and lawsuits that follow are an incredibly costly worst-case scenario.
Even when you are not facing a disaster, simple non-compliance with maintenance regulations can come with unpleasant consequences, too. Fines and other penalties such as loss of licensure are should be major considerations.
Good versus bad deferred maintenance
Too much deferred maintenance can cost you. But some is ok — beneficial, even. So how much is too much?
Let’s explore what separates the bad from the good before reviewing some steps you can take to get from one to the other.
When deferred maintenance is a problem
Here are some signs that the way you are using deferred maintenance may eventually end up costing you in the long run.
- An increasing frequency of deferring maintenance activities.
- Deferring essential maintenance or maintenance of highly critical equipment.
- Deferring repairs or other reactive maintenance tasks in addition to preventive maintenance activities.
- A deferred maintenance backlog that grows over time or becomes too large to ever resolve.
If any of the above sound familiar, you may be in the danger zone.
An escalation in the frequency or type of maintenance that gets pushed onto the backlog should be a sign that some additional resources or efficiencies could benefit your maintenance strategy.
When deferred maintenance is a solution
When used constructively, deferred maintenance can be valuable tactic.
It gives you the freedom to apply a more nuanced piroritization to your maintenance work. It can be a way for you to make the most of the limited resources on your team.
Here are a few characteristics of a productive deferred maintenance strategy.
- Tasks are added to the deferred maintenance backlog primarily as a result of unexpected issues that take time away from regular tasks.
- Maintenance backlogs are reviewed, prioritized, and assigned regularly.
- A maintenance backlog strategy exists to ensure tasks are reviewed and completed within a reasonable timeframe.
- Items on the maintenance backlog are mostly preventive maintenance tasks.
5 Steps to decreasing your deferred maintenance backlog
If you have an overwhelming deferred maintenance backlog, some things will have to change. Here are five steps you can use to set up an efficient workflow that will reduce your maintenance backlog.
Step 1: Create a list and gather the necessary information
Before you can implement any concrete measures, you need to ensure your maintenance backlog consists of a clean and accurate list of deferred tasks.
Having the right information ready will give you a clear view of the work ahead of you.
Create one central list for all backlogged tasks:
- If you are using multiple documents and spreadsheet, combine them into one.
- Encourage your team to add any additional outstanding work orders or issues that have not been reported.
Gather necessary detail:
- Estimate the resources (time, specialized skills, spare parts, budget) needed to complete each task.
- Refer to equipment maintenance logs or documented history to fill in any gaps.
Step 2: Calculate ROI and prioritize critical tasks
Now it is time for prioritization. Calculating an ROI (return on investment) is a great way to begin.
When you estimate the impact of incomplete maintenance and compare that to the time, money, or other resources required to complete that maintenance, the priority level becomes clear.
Here is an example from Plant Services’ guide on how to calculate maintenance ROI.
Step 3: Allocate resources
Next, assign the outstanding tasks to your team members, beginning with those tasks that provide the highest ROI (typically these are the highest criticality, lowest cost tasks). If assigning tasks to your team members is a simple task for you, congratulations! You are one of the lucky few.
If not, we aren’t surprised. Allocating resources might be the most challenging step, simply because a lack of resources is often the main culprit behind your maintenance backlog anyway.
You are likely to need additional resources to tackle your maintenance backlog within an appropriate amount of time. Yet, it is not a secret that upper management hates being asked for money, especially from the maintenance department.
Come into this conversation prepared with your ROI calculations. This will demonstrate how providing more resources will actually save the company money in the end. For instance:
- If asking for more staff or technicians, bring data on the number of work orders received and completed on a weekly basis, as well as overtime costs that could be avoided.
- If asking for additional funding, bring data on asset history, breakdowns, and losses that occur as a result of using poor quality parts.
Hopefully, you have a CMMS that has this data readily available to support your case.
Step 4: Reorganize and implement preventive measures
Maintenance budget issues aside, the most common reason for having to delay maintenance tasks is simply doing too much reactive maintenance. Waiting to put out fires as they come up means you are likely to keep diverting resources and adding to your deferred maintenance backlog.
One way to prevent that from happening is to start implementing preventive measures. Review our in-depth guides on how to switch from reactive to preventive maintenance and how to develop a preventive maintenance program.
If you’re already in the transition process and looking at how to optimize your PM plan, check out our checklist below.
Here are some other operational changes you can make to increase efficiency on your team:
- Change how work orders are tracked to ensure they are assigned and completed efficiently
- If you don’t have a CMMS, try to a communication app to share important information more efficiently
- Set-up a clear chain of communication so people have the necessary resources for questions and issues
Step 5: Execute a maintenance strategy with the help of a CMMS
Running an efficient maintenance team without any software support is difficult, if not impossible. With all the flexibility and workflow optimization benefits that come with a mobile CMMS, your limited resources can stretch a lot further.
- Higher productivity (less administrative tasks, faster information flow)
- Improved communication (instant notifications, easier technician collaboration on-site and off-site)
- More accountability (who did what and how long it took to complete)
- Better organization (easily creating a preventive maintenance plan, simple tracking and assigning of work)
- Increased data accuracy (inventory control, work schedule overview, usage rates, asset history, etc. – accurate reports drive informed decisions)
For an in-depth look at CMMS check out our detailed CMMS guide.
At the end of the day, maintenance software was developed with the sole purpose of helping maintenance professionals be more efficient. If you struggle with deferred maintenance and you don’t use any maintenance software, you should seriously consider upgrading to one like Limble CMMS.
Consistency is key
A deferred maintenance backlog won’t disappear overnight, but with consistent work and a smart maintenance strategy, you should be able to keep it under control.
If you are interested in other ways in which Limble can help improve your maintenance department, don’t hesitate to get in touch, we’re always up for a chat.
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