Preventive maintenance program worth $0.33/sf

Photo courtesy of the U.S. Library of Congress

JLL calculates a 545% ROI for a preventive maintenance program across 14 million square feet of mixed building types.

Since rule #1 is don’t burn down the building, it’s no surprise that building operators tell us running from fire to fire is the most stressful and inefficient way to spend a day. JLL finally put some numbers to the madness, and, unsurprisingly, proved that the reactive method is also the costliest. Across 14 million square feet and 15 types of equipment, the economic value of a preventive maintenance program equaled $0.33 a square foot–over a 25 year period–compared to a reactive operations program.

preventative maintenance program

Preventative maintenance is orders of magnitude more cost effective than corrective measures and emergency projects.

The U.S. Army jumped on the preventive maintenance train as far back as 1991. Despite the hand-drawn charts and guidance curves, and the references to micro- and mini-computers, the Army’s advice is right on the money. Firstly, the cost/benefit analysis for a preventive maintenance (PM) measure equals the present value of loss-of-service of the unit/building minus the present value cost of performing the PM.

So, when is a certain PM measure worth it?

Consider the Total-Maintenance-Costs (TMC) without preventive maintenance compared to the PM cost. And don’t forget that the TMC will depend on whether or not the unit/building has a high or low Loss-of-Service (LOS) cost curve. LOS is the unit cost of not providing full maintenance plus the allocated costs of additional downtime and lowered customer service.

Secondly, the Army connects the frequency of the preventive maintenance measures directly to the time between equipment failures. JLL uses the example of a 10-year-old, 7-horsepower air compressor: it will last 20 years with PM, 16 years without, and this doesn’t fully account for increased costs from energy efficiency degradation. The Army highlights this is all made easier with automated analytical support from an effective software infrastructure:

preventive maintenance program extends useful life

Preventive maintenance programs can come in five flavors; semiannual inspections, periodic inspections and rudimentary PM, periodic-basic PM, periodic-complete PM, and frequent-complete PM.

How helpful is it to trap the maintenance manuals for your rooftop units and black and white copies of nameplate photos in paper, on your desk? A PM program is only as good as the work that it actually helps complete. Gridium buildings benefit from Tikkit’s newest preventive maintenance program capability: easy file cataloging and storage, fast search on serial numbers or unit names, and simple repeat scheduling that’s flexible to your ideal operations:

simple preventative maintenance scheduling

One example of flexible scheduling is the ability to easily set “last Monday” or “last day” of every month.

JLL’s analysis values a preventive maintenance program across 14 million square feet at a total of $4.62 million per year, which is $0.33/sf! Let us know if you need help unlocking this type of value from your operations.

About Millen Paschich

Millen began his career at Cambridge Associates, trained in finance at SMU, and has an MBA from UCLA. Talk to him about bicycling, business, and green chile burritos.

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