Take a business focused approach to maintenance – or pay the consequences
Maintenance as a key to business success — Andy Green.
Problems attributed to maintenance failings are bad for business, which is why ANDY GREEN advocates a business-focused approach to maintenance.Traditional approaches to building maintenance are failing to cope with the changing world of facilities management, driven by legislation, improving ‘bottom line’ and attitudes towards corporate responsibility. Many companies are at risk of not being compliant and incurring unexpected and unnecessary costs and business disruption, or even becoming liable for prosecution. Yet, at little or no extra cost, any organisation could stop putting itself at risk and ensure it only does the optimum maintenance at the right price — simply by taking a different approach and adopting ‘business focused maintenance’. The main obstacle faced by many charged with maintenance, be they building owners, facilities managers or contractors, is that it can be hard to move away from long established practices and procurement based on ‘lowest price wins’. Often harder still is spending the right money on actually doing the appropriate business-critical maintenance from a whole-life perspective — which some might say is the maintenance ‘holy grail’. All too often, businesses decide to significantly reduce their maintenance expenditure related to the costs incurred in the previous year, rather than reflecting actual business needs. Worse, when times are tough or other budgets overspent, the property maintenance budget is the first to be cut — do nothing/minimum maintenance is the norm! Annualised budgeting and fragmented approaches often lead to short term fire-fighting — putting the building performance and the business at risk. As a consequence, preventive maintenance goes out the window, in favour of simply reacting to problems as they arise — regardless of the impact this could have on the commercial use of the built environment over the building’s intended life. So not surprisingly most organisations are failing to get to grips with backlog maintenance and struggle to make proper provision for life-cycle maintenance — which means at some point the business will inevitably have to pay for the consequences. Overcoming the problem
There are several key problems. First, it is highly likely that many buildings are failing to comply with all the legislative requirements, such as water testing and electrical testing and so on — with the mistaken belief that the probability of a problem occurring and prosecution is remote. The basis of the legislation is about prevention; ignorance is not a defence. Secondly, adopting a reactive maintenance approach is rarely cost effective or good for the business in the short and the longer term. The implications of doing things when they occur, in an unplanned fashion, is that direct costs are higher because emergency or premium rates have to be paid. Also, it often does not lead to solving the root cause of the failure. It can also negatively impact on occupier/customer experience — resulting in business downtime, loss of income and other indirect costs, creating uncertainty and confusion about what organisations are actually getting for the money spent on maintenance. Thirdly, the result of the typical scenarios outlined above is that the funds that are available for maintenance may be improperly spent, by focusing upon assets that are not business critical, whilst those that are important to the business remain vulnerable and at risk! In marked contrast, business-focused maintenance techniques pioneered and developed by companies such as Faithful & Gould, centre on the following criteria. • Ensuring full compliance with statutory legislation and legal obligations. • optimising the maintenance of property, plant and equipment critical to the business. This approach ensures that all legislative requirements are met. The next step is to consider the property, plant and equipment, and rank them in terms of ‘impact’ or consequence of failure upon the business. These will be different for each business and sectors of the business. For example, what matters most to a retail outlet is to be open as appropriate for trading, ensuring the lights are on so customers can see what they are buying and the tills are working to take the money. For a call centre, it may not only be important to have the ‘operational space’ fully functional but also to maintain quality break out areas, to provide the best overall environment and so assist in keeping up morale and countering high staff churn levels typically experienced in such businesses. Getting the right budget
Adopting business-focused maintenance would define the right budget to ensure compliance, plus the optimum maintenance regime to suit the business’s property, plant and equipment functional requirements. If this costs less than the available funds, the balance can be prioritised to address other issues, such as doing backlog repairs. However, if the budget will not stretch to cover everything, at least the organisation can spend the available funds in the most crucial areas, whilst having the comfort of knowing the risk of prosecution, resulting from non compliance, will be eliminated. In reality, because the prime purpose of business-focused maintenance is to reduce the level of expensive reactive maintenance, such an approach may actually be achievable at little or no extra cost! Of course, there will be times when the budget is not sufficient to meet the particular business needs. In these circumstances the ability to prepare robust arguments in favour of additional funds holds the key to moving forward. By adopting business-focused maintenance, it should be relatively easy to support such arguments, because expenditure is centred on doing ‘must do, or go to jail’ and ‘business-critical’ maintenance which will help support the business performance and positively impact on the bottom line.
Identifying non-critical maintenance costs can have an immediate impact on the bottom-line performance of a company.
A major museum’s review of its maintenance budgets provides a useful case in point. Maintenance had historically been focused on protecting the national treasures exhibited, whilst providing public access to see them, with a lesser focus on the environment and associated spaces. The simple possibility that the consequences of not doing critical maintenance could result in irrecoverable damage to priceless artworks, helped to stop the cycle of year-on-year reduction of the maintenance spend at the museum — and get approval for the right budget. Making it happen as the norm
PFI/PPP/public sector procurement is currently leading the way on business-focused maintenance, even if it does not call it this, because doing appropriate inspection and servicing is integral to ensuring the asset performance, reliability and availability over its whole life which is fundamental to meeting long term contractual commitments. Similarly some of the more sensitive industry sectors including nuclear and pharmaceutical have recognised the benefits of adopting a form of business-focused maintenance. The tangible benefits now being realised by adopting a business focused approach are: • compliance; • transparency and accountability; • value for money; • optimises the use of resources; • clear basis to benchmark performance. But, despite these benefits, the norm is still a continued over-reliance on traditional-style procurement and reactive maintenance, so the tide has yet to fully turn. However, the business-focused maintenance approach supported by initiatives and guidance from leading industry bodies such as CIBSE, BSRIA and HVCA, is gathering momentum. There is also a greater awareness by property, facilities and maintenance managers who are increasingly becoming conscious of the importance of maintenance planning, budget justification and avoiding the ultimate consequences of being legislatively non-compliant. What is now needed at an influential level within many businesses, is a better understanding of the value and impact of a businesses property, plant and equipment, so that the critical role of maintenance planning and implementation becomes universally recognised as one of the keys to business success in any organisation. Andy Green is director of whole-life value with Faithful & Gould, one of the world’s largest project and cost management consultancies. Faithful & Gould employs over 2000 staff with a turnover in excess of £120 million and has an expanding office base worldwide.