“Every $1 in deferred maintenance costs $4 of capital renewal needs in the future.”
Contrary to your initial gut reaction, deferred maintenance is a practice with a very useful purpose.
Maintenance managers often work with limited resources (be it budget, time or staff). This means that there are many situations where some maintenance work has to be postponed and put onto maintenance backlog until you resolve higher priority issues.
And that is not a problem. Everyone should have a defined process on how to deal with tasks that need to be postponed.
The problem is when you allow those tasks to keep piling up, without a sound plan on how to start reducing your backlog. If you allow this to go on for too long, you’ll end up in a situation where you need to delay repairs of critical assets – which simply isn’t sustainable.
In this article, we will discuss what is deferred maintenance, try to identify underlying issues that lead to crazy maintenance backlogs, and outline a simple process you can implement at your facility to start reducing your deferred maintenance backlog.
What is deferred maintenance? | Deferred maintenance definition
Deferred maintenance is a practice of postponing maintenance work to a later date due to the lack of different resources.
It doesn’t matter if we are talking about unexpected issues or recurring preventive maintenance work – whatever you need to do, if you do not have enough resources to execute it, it has to be put on hold.
Common reasons for a stuffed maintenance backlog
While many organizations do face unique challenges, there are some common issues that lead to heavy maintenance backlogs that can be identified in any industry:
- Lack of a sound proactive maintenance strategy. It is not a secret that reactive maintenance leads to more maintenance work down the line. Other problems aside, the more work you have, the higher the chance that some of it will have to be delayed. Save yourself the trouble by implementing a preventive maintenance plan or a predictive maintenance program.
- Poor spare parts inventory practices. You have to admit that performing maintenance work without the required tools and spare parts is not the way to go. Look to implement efficient spare parts management so your maintenance backlog isn’t getting bigger because your technicians have nothing to work with.
- Maintenance teams lack needed skills. If maintenance technicians don’t know how to fix something or take ages to execute simple tasks, your deferred maintenance backlog will only continue to get bigger. To remedy that, ensure everyone has adequate training and access to needed information like equipment maintenance logs. As a last resort, consider firing people who constantly underperform and show no improvement.
- Lack of manpower. If maintenance tasks keep piling up and your technicians have to do a lot of overtime, one of the reasons for it can be that you simply do not have enough people to tend to everything.
- Budget issues. Lack of funding is often an overarching challenge that can be the root cause of all of the issues discussed above. If top management isn’t budging, you’re only left with trying to optimize maintenance workflow to cut costs; and make some room in your budget that way. Take a look at how CMMS can increase productivity and reduce maintenance costs.
Deferred maintenance examples
Deferred maintenance example #1
A classic deferred maintenance example set in a production environment could look as follows.
You have prepared work orders for all 3 shifts and so maintenance technicians in every shift know what else they have to do, alongside their everyday assignments. Some of those work orders included reorganizations of spare parts inventory, changing some industrial lightbulbs in the hallway 4 and fixing an asset that broke down last week as replacement parts just came in.
Everything went as planned until a machine operator made a mistake and caused a big issue that stopped the whole production line. As production needs to continue, you need all hands on deck. The morning shift had time to reorganize spare parts inventory but the other two tasks have not been covered yet. As they are both lower priority tasks, they both end on the deferred maintenance backlog.
Deferred maintenance example #2
Let’s imagine you are a facility manager for a 10 story building. Every 3 months you have a scheduled PM to change all filters on every HVAC. As always, you have ordered 3 different types of filters as not all HVACs use the same one. Unfortunately, one of those orders didn’t get to you on time. This means that all HVACs that use that type of filter will have to wait and you have to put that “Replace HVAC XYZ filter PM” on the deferred maintenance backlog.
Deferred maintenance cost and consequences
Initially, I was planning to discuss major problems you can run into if you have a big maintenance backlog.
But you already know all of that. You know that assets that are not routinely maintained lose on productivity, are less safe, and will have to be replaced sooner. You also know that having a mountain of uncompleted maintenance tasks will result in reduced overall efficiency and more costs in the long-term.
But just stating that doesn’t really pack a punch. Let’s look at some numbers:
- Research from The Geaslin Group suggests that deferred maintenance which is the result of running your assets until failure will often result in exponential costs that can quickly escalate out of control.
- A while back, Rick Biedenweg, the President of Pacific Partners Consulting Group stated that “Every $1 in deferred maintenance costs $4 of capital renewal needs in the future.” In essence, this means that for every dollar you don’t spend right now on needed maintenance work, it will cost you as much as 4 times more later down the road.
From whatever angle you are looking at it, deferred maintenance seems like something you need to keep on a leash if you don’t want it to bite you in the ass.
So let’s look at what you can do to start clearing out your deferred maintenance backlog.
How to decrease your deferred maintenance backlog
Let’s face it – if you have a big deferred maintenance backlog, some things will have to change. How big these changes need to be will depend on your current workflow and how you deal with deferred maintenance at the moment.
Here are 6 steps you can use to set up an efficient workflow that will help you reduce your maintenance backlog.
Step #1: Measure data and create a list
Before you can implement any concrete measures, you need to have a clear overview of how much work is ahead of you.
So the first thing you need to do is put all of the tasks that need to be done on a single list:
- If you’re using multiple documents and spreadsheets to track maintenance backlog, transfer everything to one document.
- Talk with maintenance technicians and machine operators to see if there are any other issues that haven’t been reported (or work requests that have been lost/misplaced).
- After that, for each task, estimate how much resources (time, spare parts, budget) you need to complete it. For things you can’t accurately estimate from the top of your head, look at your equipment maintenance logs and other maintenance history files. After all, it is unlikely that you will have many tasks on your maintenance backlog related to issues that happened for the first time ever.
Step #2: Calculate ROI and prioritize critical tasks
Now that you have a list of things you need to do, you have to decide in which order to do them. A great way to do that is to do an ROI calculation.
Start by determining what is the impact of not having a certain task completed. When you know how much resources you need to invest to complete a task and how much money you stand to lose if you leave it unattended, it is not hard to calculate how much you are saving (or how much further cost you are avoiding) by tending to it right away.
The above screenshot was taken from a Plant Services’ guide on how to calculate maintenance ROI. While you can’t just copy/paste the whole process exactly as it is outlined above, you can use a very similar principle to show the negative impact of specific deferred maintenance tasks and potential savings if you take care of these issues before they cause bigger problems.
When you do this, it will be much easier to decide how to prioritize deferred maintenance and which tasks should be at the top of your list.
Step #3: Allocate needed resources
Allocating needed resources might be the most challenging step on this list – often because a lack of resources is the main culprit for deferred maintenance in the first place.
Be it old worn out assets that are barely worth fixing anymore, lack of manpower, or lack of spare parts, things are unlikely to get better without necessary investments. That leads us to one thing every maintenance manager dreads – asking upper management for more money.
It is not a secret that upper management hates being asked money, especially from the maintenance department. This is why you need to come to them prepared. You need to be able to show them that it is in THEIR best interest to increase your budget because that will save THEM more money in the long run.
This is where your calculations from the previous step become extra useful. Use them to illustrate the potential exposure of deferred maintenance, as well as how much money you will save if you can tend to these tasks before they cause more problems.
One thing that they might tell you is that you should just be more organized and efficient. To prove (to yourself, as well as upper management) that isn’t the case you can do the following.
This can be done by hand but it might take some time to gather needed information. Hopefully, you have a CMMS and you can use its data to prove your point:
- Support for lack of spare parts argument. Pull out asset history data and compare how original (from the original manufacturer) vs “fake” (cheaper third-party parts or improvised home-made solutions) parts behave. The numbers will show that original parts last much longer, take less time to implement, and cause less unexpected breakdowns – all of which means less work and less expenses. Metrics like MTBF and MTTR could be useful to look at in this context.
- Support for lack of manpower argument. Look at overall maintenance history and pull out how many Work Orders are being done each week/month compared to how many PMs and Work Requests are coming in. Also take a look at how much overtime is being done and how much is that costing the firm on a monthly basis. This can be a good argument to show you simply need to hire more people.
If the data shows otherwise, than this is a great indication that you possibly have everything you need and just need to reorganize internal processes and resources more efficiently.
Step #4: Reorganize and start implementing preventive measures
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’re not in control of anything and this cycle undoubtedly leads to more work down the line.
One way to prevent that from happening is to start implementing preventive measures. To get you started on the right path, we have written 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.
Aside from implementing CMMS and proactive measures, you can also look into:
- changing shift lengths/number of people in the shift
- change how Word Orders are initiated and tracked (if you are not using a CMMS, having one box for Work Requests and one box for all Word Orders that need to be done are put into could help you stretch your labor resources farther)
- if you don’t have a CMMS, you can try to use Facebook Messenger, WhatsApp, Viber, or a similar communication app to keep all relevant parties in one group and communicate important information more efficiently
- set-up a clear chain of communication so people know to whom they go to, depending on the problem they have
Step #5: Execute your maintenance program with Limble 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 mobile CMMS like…
- 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 (creating a preventive maintenance plan is a breeze, easier tracking and assigning work)
- increased data accuracy (inventory control, work schedule overview, usage rates, asset history, etc. – accurate reports drive informed decisions)
…it is easy to see why.
At the end of the day, maintenance software was developed with the sole purpose of helping maintenance professionals be more efficient at what they do. Organized maintenance departments that have reasonable budgets available should rarely have problems with big maintenance backlogs.
If you struggle with deferred maintenance, and you don’t use any maintenance software, you should seriously consider implementing Limble CMMS as we are great at helping people get organized.
The key is to be consistent
Having a great maintenance plan and the best software available won’t mean much if you don’t set up best practices that take advantage of these resources – and ensure everybody follows them.
Deferred maintenance backlog won’t disappear overnight, but with consistent work and reasonable upper management, 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.