You Are Paying Too Much For Maintenance

In Colorado Contractor News // on July 12th, 2016 // by // No comment

The idea behind a preventative maintenance program is to lower overall operational costs – If you prevent a failure, then you will not pay for an expensive repair.  This is what the mechanical industry has been touting for a long time, and this is not the case.

After reading this post, you will be able to:

  • Predictively reduce your maintenance budget by over 15%,
  • Significantly reduce “surprise” repairs,
  • Have the knowledge to “cut through the nonsense.”

What You Do

You are responsible for creating an effective budget for your building that is geared toward maximizing the property’s Net Operating Income (NOI), positioning the asset strongly in your market, and most importantly, achieving the property’s investment goals.  You are spending too much money maintaining and repairing your equipment.  I’ll explain why, but to do this you need a little history.

History

In the 70’s, two genius engineers working at United Airlines, Nowlan and Heap, were commissioned by the U.S. Department of Defense to understand why things fail.  Their work was released to the population in 1978, and found to be applicable to all equipment with moving parts.  This study saved the government and airline industry trillions of dollars in maintenance costs and made flying one of the safest forms of transport.

The Discovery

  • Only 11% of failures are correlated with age, such as wear or fatigue
  • The other 89% are random in nature, thus unpredictable
  • 68% have a defect introduced during the construction or application of equipment, making it more prone to functional and catastrophic failure during its life.

The reason most things randomly fail is due to very difficult to distinguish imperfections, such as a bearing with a microscopic defect or a shaft 0.0003% out of alignment.  To discover these issues initially is exorbitantly expensive.

What Did This Mean

What maintenance strategies did airline companies and the U.S. military implement to reduce cost dramatically while increasing safety and runtime?

  • Basic maintenance on a regular and conditional schedule
  • Allow run-to-failure when consequences permit, and to “allow” this to occur as much as possible, they installed redundant systems to deal with failures while the aircraft is in operation
  • Replace all aged parts which were likely to fail before they had the opportunity to create a costly unscheduled repair or life-threatening situation
  • Conditional Inspections based on usage, from pilots visually inspecting a plane every time they took command, to very in-depth investigation of turbine blades after a certain number of operating hours
  • Predictive maintenance when possible and justifiable
  • Constant feedback to manufacturers so equipment could be redesigned to remove the failure’s cause.

They understand more costly maintenance and labor-intensive inspections do not prevent failures. They keep maintenance simple – replacing fluids, filters, torquing connections, and rudimentary inspection. It is smarter to gather great documentation on systems, understand its life cycle, and apply the right amount of solution at the right time: Change components just before they are likely to break, schedule the correct  inspections when most likely to reveal an issue, and manage a failure intelligently rather than just “fix it.” This program greatly reduced labor costs and aircraft downtime while increasing flight safety.

How To Save HVAC Maintenance Costs

If we take the information from the Nowlan and Heap study, and apply the systems implemented by the U.S. government and airline industry, we will have a comprehensive maintenance program that reduces maintenance and repair costs, surprise repairs, all while maximizing uptime.  To do this we need to understand the life cycle for each type of equipment.

Life Cycle of Equipment

A graphical way to understand the relationship of maintenance, repair, and replacement for equipment is the P – F Curve.  It is a Plot of Resistance to Failure for the Useful Life of a component or system, such as a piece of equipment.  It is important to note this curve is different for each type of equipment, and even the same type of equipment used in different environments – A rooftop unit which operates 8 hours per day in a clean environment will have a very different profile than the same model rooftop operating 16 hours per day surrounded by cottonwood trees and close to a major freeway.

This shows us what we know from experience.  New equipment is less likely to have issues when correctly engineered and installed.  After a period of time, it reaches the Potential Failure point when issues start to occur at a reasonably predictable rate.  This continues until the equipment reaches the Functional Failure point when major issues occur, it stops producing the intended function, and repair costs outweigh the replacement cost.

Equipment should have basic time-based maintenance throughout its life:  filters, belts, lubricant, connections tightened, and a simple inspection task. The exception is noncritical equipment which is inexpensive to replace or equipment that has no applicable tasking that will extend its operational life.

Pre Potential Failure

Strategies which extend the life or efficiency of equipment will have the most impact if implemented in this stage because it affects the entire life cycle:  coil screens to keep out flora & cottonwood blossoms, or cooling tower water nozzles that do a better job evenly distributing water.  Filter and belt replacement schedules should be adapted to the environment and use.  If an Air Handler serves a mostly unoccupied space, and the surrounding air is clean, the air filters should not have to be changed as frequently than if the building is full of people and by a freeway.  Your service company should be documenting the condition of the filters, adjust the frequency based on the changing situation, and update the maintenance program price.  A time-consuming alternative is to personally view the condition of the filters, decide the appropriate frequency for change, and ask to have the program adjusted.  This can have a huge impact at driving down costs.

Potential Failure

Once equipment reaches the Potential Failure point in its life cycle, and conditional on the use, application, and environment, inspection tasks should be expanded since this is when failures are able to be identified and occur.  This is also when components which are subject to wear need to be proactively replaced before they fail.  This is the only strategy that will reduce expensive repair calls.

You should also consider revamping parts of the equipment that are failing, which if addressed early enough, will likely add many years to the life. Examples of this are cooling towers rebuilds and condensate pan coatings.  If the equipment is critical, or very expensive, then predictive maintenance can be a reasonable strategy during this period of its life (the only exception is oil analysis for compressors because of the low test cost).

Functional Failure

You need to be alerted before the equipment reaches the point of Functional Failure to:

  • Prepare strategies for replacement
  • Begin educating your ownership group that a large capital expense is needed in the next few years
  • Adjust your Operating budget to account for the additional attention the equipment will need.

When determining the best strategy, incorporate Energy evaluation involving utility rebates and grants, and use Net Present Value analysis to help decide the best financial solution to meet the property’s investment goal.

Your service provider should be proactively providing you replacement quotes, counseling you on options, and working with your timeline to keep the equipment operating as long as possible without large repair costs.  Managers who do not understand the equipment’s position on its life cycle will be ‘‘blindsided’ by unanticipated repair costs.

Final Thoughts

In the HVAC service industry the term Preventative Maintenance is common language, and used to “sell” the idea that failure can be prevented. This is supposed to drive down repairs and save you cost, yet common sense tells us complicated task lists which consume expensive labor, increased frequency of unyielding inspections, changing filters more than needed, or expensive predictive maintenance on noncritical systems ends up costing you more.

The only way to drive down costs is to prescribe the right solutions at the right time.  To do this, the Life Cycle of each type of equipment needs to be known, the equipment’s position on the life cycle understood, and the appropriate actions be automatically taken.  Accept repairs will be needed, but manage this with applicable information and a proactive plan. Make sure your service provider also understands this and is available when you need them.

When a maintenance system is based on Life Cycle – Your life gets easier!

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