As managers responsible for the maintenance of facilities and assets, we often hear the term whole-of-life. When referring to WOL we are essentially talking about the total cost of ownership over the anticipated life of the asset, and the impact that may have on formulating an asset management strategy. We are not just referring to the direct maintenance cost but also cost relating to financing, planning, design, installation, environmental, management and disposal. The logic behind whole-of-life cost analysis is sound and its influence on good decision-making and value to the client cannot be disputed. Why then is this asset management strategy rarely implemented successfully? It is a complaint often heard in industry circles and it would seem that clients are increasingly asking for more than a simple preventative and reactive maintenance approach.
For a WOL maintenance program to work certain factors need to remain constant throughout the life of the asset. As an example, we need the client’s attitude to maintenance and the maintenance budget to remain unchanged. We also need to start with a base of all assets having been maintained to a standard of industry best practice and we need terms and conditions of a maintenance contract to support a WOL approach. Expanding further on the last point, it is common to see maintenance contracts which call on maintenance cost and fees to reduce year on year. This can only work if the contract starts with all assets being up to standard and ongoing maintenance at industry best practice. An incoming facilities management firm with a WOL program in mind and the responsibility of deteriorating and poorly maintained assets would first need to convince the client to spend significant short-term sums to bring their assets up to a certain standard in order to capture long-term savings. In today’s climate that would be a difficult challenge. In addition, if quality and accurate asset condition data has not been kept then there is no solid platform on which to base a WOL program.
The other constant required and as previously mentioned is the client’s attitude to the maintenance budget. When revenues are down, and financial managers are tasked with reducing business cost then maintenance budgets are often the first to be cut. This is especially true when the assets are not integral to the client’s core business. This is a short-sighted response which while helping to solve immediate cash flow and profitability issues will certainly see reactive spend increase and reduced reliability and availability of the asset. In this environment WOL programs lose traction, and the end result will be far higher long-term maintenance cost.
"We cannot understand how we lived without the services of your company. This is the perfect solution to better navigate your own rights! Notaro is the best law firm!"
