Maintenance Q&As

How much should you spend on maintenance for your facility?

Answered April 20 2019

When people ask me this question, I think they expect a simple answer based on a few factors. It seems like you should be able to say maintenance costs are typically some set percentage of your operating budget, based on things like business type and the age of your equipment.

Unfortunately, the answer is usually much more complicated. Maintenance costs for an apartment complex will be much different than maintenance requirements for a high-production manufacturing facility. If a building and equipment are relatively new and have been maintained well, your costs will be lower than in an older facility that has been neglected. Operating your business in a small Midwest town will result in labor costs that are lower than running your company on one of the coasts.

That said, there are a set of guidelines that can be applied to just about any organization when setting your maintenance budget:

  1. Evaluate the current state of your business and the critical maintenance items that need to be addressed to keep your organization viable. You need to make sure that, at a bare minimum, you can avoid losing ground every year while still staying in business.
  2. Encourage a proactive corporate culture, not a reactive one. The right employee attitude, from management down to technician, can affect maintenance spending in the long run.
  3. Invest in an effective PM system or PdM system, which can help you automatically plan, identify, schedule, perform, and record maintenance tasks.
  4. Establish effective metrics in your CMMS system that can improve maintenance planning and continue to improve performance.
  5. Create strong failure and loss elimination programs and execute accordingly.
  6. Tie maintenance design programs to the life cycle cost, not just the initial cost, to set appropriate maintenance tasks and budgets.
  7. Prevent unnecessary damage to assets with clear, concise, and understandable operating procedures.

By adhering to these guidelines, your organization will be well on its way to setting a reasonable maintenance budget now with sights on reducing costs while improving performance in the future.

Asset Management Questions & Answers