Updated: Oct 18
As building management costs continue to rise, companies are continually trying to find ways to reduce annual spending. When looking to trim the budget, one of the first places an owner might look is facility operations. In the US alone, an estimated $141 billion a year is spent on facility repairs. While trying to overcome the rising costs of inflation, owners are faced with the ultimate question: is it less expensive to run existing equipment until it fails, or perform proactive maintenance? Recent studies show varying levels of proactive maintenance to be the cost saving option.
While building codes change and focus more each year on saving the environment, studies now show these changes can have a savings on cost as well. According to a study by the US Dept. of Energy, proactive maintenance can lead to a minimum reduced cost of 12-18% compared to reactive maintenance. Applying this math to a sample company with a facility management budget of $2 million annually may save on average $300,000 per year – savings that could go a long way to attacking immediate and deferred capital needs.
There are various types of proactive maintenance such as preventative, predictive, and reliability centered, however, let’s discuss the difference between preventative and predictive maintenance. Preventative maintenance can be defined as “actions performed on a time- or machine-run-based schedule that detect, preclude, or mitigate degradation of a component or system with the aim of sustaining or extending its useful life through controlling degradation to an acceptable level.” Simply by maintaining equipment on a schedule (changing lubricants, replacing filters, cleaning, etc.) preventative maintenance can have an annual cost savings of 12% - 18% without an increased initial investment.
As companies decide to increase reliability further, they may decide on a predictive maintenance approach. This arrangement uses data collected by condition-monitoring devices during normal operation which would detect the onset of system degradation, thereby allowing causal stressors to be eliminated or controlled prior to any significant deterioration in the component’s physical state. This maintenance type varies from the preventative system by basing service needs on the condition of the equipment vs. a preset schedule. By utilizing condition-monitoring devices and predictive maintenance software, equipment efficiency can be optimized without unnecessary workload or nuisance shutdowns. Using this method can have a savings increase of up to 40%. Of course, predictive maintenance does have an increased initial investment such as new software, monitoring devices, and new energy efficient equipment, however an effective predictive maintenance program can all but eliminate catastrophic equipment failures. This in combination with sustainable design may be able to increase the return on investment even earlier.
How Can Sustainable Design Further Reduce Spending
Sustainable design really focuses on quality vs. quantity. For example, windows and insulation may have a higher upfront investment but will require a smaller HVAC system. Limiting not only the HVAC equipment’s upfront cost but also the amount of proactive maintenance required and the size of the facility operations workforce required to perform any upkeep and repairs.
These savings in cost, and possible decrease in the facilities workforce required, comes at a perfect time when the reality is nearly 40% of facility management professionals are set to retire by 2026, according to a report by ARC Facilities. While staffing agencies, the Bureau of Labor Statistics, and vocational programs work to solve the staffing issues, companies can look towards sustainable design and an effective maintenance system to solve their immediate needs. The building’s facilities system should be constantly improved and changed with the goal of reducing incidents and failures that negatively affect production, and with that, reports show an increase in energy savings with very little up-front costs. With this information, you may want to consider a combination of sustainable design and proactive maintenance as a solution for how your company will combat rising annual operating costs and an evolving workforce.
Electrical Project Engineer
Auton, David. “Proactive Maintenance strategies for operational value.” IFMA Knowledge Library. 1 January 2022, Proactive Maintenance Strategies for Operational Value - IFMA Knowledge Library.
Kanell, Nai. “Facilities Management and Millennials: The Future of the Workplace.” Space IQ. 2023. Facilities Management and Millennials: The Future of the Workplace (spaceiq.com)
“Identifying Proactive vs. Reactive Maintenance Management Programs.” Horizant. What is Your Maintenance Management Type? | Horizant (horizantsolutions.com)
“Chapter 5: Types of Maintenance Programs” O&M Best Practices Guide. US Department of Energy. Operations & Maintenance Best Practices Guide: Release 3.0 (energy.gov)
“Why Predictive Maintenance is More Profitable than Reactive Maintenance.” Denizon. Why Predictive Maintenance is More Profitable than Reactive Maintenance - Denizon - Workforce Management, Energy Management & Managed Services