We were regularly asked “What is the right level of reactive maintenance to allow for in the annual property budget?”
The automatic response tends to be “as little as possible”; but given the range and use of property types it is not necessarily a simple answer.
What can reactive maintenance tell us about asset management maturity?
Reactive / unforeseen / unscheduled / corrective maintenance (RM) has as many definitions as it has names but in essence it involves repairing an asset or component back to the appropriate level of performance after it has failed (or in worse case replacing it altogether). Because a failure it generally not planned it follows that reactive maintenance is also something that is not planned.
Because of its spontaneous nature the cost of RM, which considering the criticality of the part, the timing of the infraction or the disposition of the client, will attract a premium. It typically involves the repairer changing priorities, unscheduled trips to site etc. An industry convention (yet to see a valid proof) is that RM cost is about 3 times the cost of an equivalent scheduled repair. That is not really allowing for the consequential impact or disruption caused to other parts of the business.
Another issue associated with definition is that there is a tendency for “other” types of costs to end up in the RM bucket…I suspect most will be familiar with this.
So, apart from being unplanned, disruptive, more expensive, and often ambiguous in nature is there any justification for RM? …well yes.
More frequently we hear the term data-driven / data-enabled regarding asset management. This is reality – you need to know and understand your assets to accurately cost and strategize. It follows that the operational plans for a portfolio based on data-driven asset management will be less dependent on RM.
Consequently, it should be easy to extract an indicator from the annual accounts namely Total Reactive Maintenance Spend as a % of Total Property Budget which can be used as an indicator of asset management maturity. Conceptually this relationship may look as follows:
To the question “What is the right level of RM?”, we would say it really depends on circumstances such as age, criticality etc…but in our opinion anything over 20% of Total Property Budget pa, if not a nominated strategy, would be a concern or a sign of lower asset management maturity.
Uncategorized / November 2019
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