to grow the
value of your
largest asset — Your Facility.
Now is the time to INVEST in Preventative Maintenance!
In these difficult times, many Health Care organizations are seeking to reduce or eliminate maintenance staff in order to save money. This is a poor decision and actually increases financial RISK for the Health Care provider. Our data shows that for every $1 spent annually on preventative maintenance, an organization can reduce long-term infrastructure capital needs by as much as $40 over a ten-year period.
That’s right, investing in preventative maintenance can generate an ROI of up to 300%! Divesting, while appealing today, will actually increase long-term capital needs and negate any short-term savings. That is a message that any CFO will understand. CFO’s understand RISK, and they understand ROI. So, let’s change the game.
When you look at the total life cycle cost of a facility, it is imperative that you balance both capital and operational budgets in order to obtain the best return on investment.
The ROI of Preventative Maintenance – In Dollars and Cents. Imagine not changing the oil in your car… you might save a hundred bucks a year, but you’ll pay the price down the road with a premature engine rebuild or replacement costing thousands. Now imagine an entire fleet of cars, or better yet, your total MEP infrastructure portfolio that is made up of hundreds or thousands of assets. Now imagine that the expected useful life of each asset in that portfolio can be extended, or cut short, by up to 20% based on preventative maintenance, or lack thereof. A 20- year Air Handler might last only 16 years, or worse, simply fail. It’s the same story for Chillers, Cooling Towers, Boilers, etc. And that gets expensive. It all adds up.
For any business that relies on their facility to attract and retain customers, we hold these truths to be self-evident, that premature aging or unplanned failure of infrastructure assets increases financial and operational RISK for the organization, that preventative maintenance can significantly extend the useful life and performance of those assets, and that preventative maintenance is the first victim of budget cuts. Simply put, when operating with limited resources, you may be able to fight fires as they start, but you have little chance of preventing them in the first place. This is the key message for your leadership.
We Can Help
In difficult financial times, CFO’s are seeking to minimize financial RISK to the organization. Reducing maintenance staff INCREASES THAT RISK as equipment continues to age and future capital needs will increase significantly. Act now to build your defense.
If you would like additional information or need further information on the development of your operational and capital metrics, please contact us for assistance. We are happy to help!