1. OF TECHNOLOGY & MANAGEMENT Advanced Diploma in Facilities Management
TRENT GLOBAL COLLEGE
OF TECHNOLOGY & MANAGEMENT
Advanced Diploma in Facilities Management
Asset Maintenance Management
Lecturer: Daniel wong, mba, m.sc, bbus

2. Executing A Maintenance Policy
Understand the key factors influencing Maintenance Policy Planning
Expressions of Maintenance Standards (functional, conditional, response, financial)
Execution of the Maintenance Policy (staff, budget, schedule, external services)

3. Factors Influencing the Maintenance Policy
Several factors effect the scope and application of a policy
Technical factors
Corporate policy considerations
Organizational considerations
Financial considerations
Economic considerations
Environmental considerations

4. Technical factors
Relate purely to the performance of the component without any direct consideration of company policy or directives. 1
Age of Component / Unit
Strong correlation between age and deterioration
eg. Corrosive environment, rust.
Weathering effect (moisture) on building components
Older buildings need more maintenance
The first factor to consider when considering
maintenance priorities 2
Cost of Replacement Parts / Whole Unit
Certain components may be more expensive to replace than others. Cheaper to wreak than to repair.
Repair cost Vs replacement (more cost effective to
replace?)
Availability of replacement parts. No longer available, cost high to make. 3
Cost of Postponing Maintenance (Deferred Maintanence)
Many fail to understand the true cost of failing to carry out maintenance, deferring maintenance.
Deferred maintenance adversely affect the quality
Possible loss of goodwill and bad publicity
Cost more in the long run vs small amount saved

5. Technical factors Yesterday’s maintenance will affect today’s4
History of Maintenance
Yesterday’s maintenance will affect today’s
maintenance policy
If previous building owner deferred maintenance and created back log, new owner will have to spend more to bring building up to standards.
Record of maintenance is important 5
Programming Factors
Components can be designed to have lifespan
which compliment programmed joint
replacement of 2 or more elements.
More economical to replace main buildings
elements with its associated equipment to
minimize downtime, disruption and access cost
Many latest research now focus on Cost
Prediction Models in relation to estimated
lifespan of elements

6. Technical factors 6 Materials 7 Statutory Factors 8 Discovered Defects
Types of materials used has a considerable effect on the Maintenance Policy
Inappropriate election of materials today will affect tomorrow’s maintenance, example
Steel windows in housing
Asbestos insulation and fire stopping in offices
Old engine design for new cars
Radical new design in bridge construction
Purpose made defectiveness
Synthetic slate roofing tiles 7
Statutory Factors
Change in legislation resulting in a change in policy, higher standards required etc.
In recent years, the Window Retrofitting Orders,
Legionella bacteria control for Cooling Towers,
Fountains etc 8
Discovered Defects
Newly discovered defects will affect the MP
For example tiles popping, roof leak etc

7. Technical factors New Technology New Working Practices9
New Technology
Emerging new technology will affect how maintenance works are carried out
New machineries will increase the efficiency and speed of how work is done, eg. Underwater CCTV, hoist 10
New Working Practices
Changes in working practice can affect corresponding maintenance requirements eg, automation
Business process improvement, s cut down the needs for snail mails and dispatch personnel 11
New User Requirements
New standards of customer or user requirements may form. Eg car alarms,immobilisers etc.

8. 2. Corporate Policy Considerations
Some organisations may have to maintain a higher maintenance image than others for policy reasons, Egs
Public Image of Organization
Employee Working Considerations
Consequences of Failure
Past and Current Usage
Future Strategy Consideration

9. 2. Corporate Policy Considerations (
A. Public Image
Certain organizations have a requirement for high levels of maintenance and low failure
The level of maintenance committed to each type of rolling stock is dependant on: -
the image of the company and
the cost of failure
May want to display their buildings in pristine condition always eg. disneyland.
B. Employee Working Consideration
Strong correlation between level of maintenance, employee satisfaction and productivity
Attitude of employee is affected by the quality of equipment they used
Better motivation with better working environment

10. 2. Corporate Policy Considerations (cont’d)
C. Consequences of Failure
Single most important factors influencing Maintenance Policy
Consequences of failures defers from organization to organization
The higher the consequences of failure, the more funds will be allocated and more attention will be given. Eg. Space shuttle
D. Past and Current Usage
The level of maintenance required by a unit/component depends on the
past and present usage
Impossible to isolate one component from the other
Standard maintenance schedule may not be sufficient, especially when
equipment is subjected to abusive usage (e.g. 24 hours cooling)
Over utilization or wrongful use may invalidate some/all the manufacturer’s estimated lifespan and recommended service frequencies
Policy must recognise and allow for this.

11. 2. Corporate Policy Considerations
E. Future Strategy Considerations
Most companies will have a Strategic Plan, with strategic objectives that link to the asset base
The Strategic Plan will state how much the company is willing to
invest in its assets
Invest more in the maintenance of an asset that forms part of the
strategic plan.
Strategic Plan may also indicate the assets due for disposal /
demolition / scrapped, then minimum fund should be allocated for
this class of assets (just to satisfy minimum statutory
requirements)

12. 3. Organisational Considerations
Maintenance Depts are part of the larger organisation.
Maintenance is subjected to organisational links of communication, contract, accountability etc.
Egs, power bases, position, structure, interaction, startegic policy.

13. 3. Organizational Considerations
Organizational consideration to note while formulating the Maintenance Policy: - 1
Power Bases
Different sections within the organization has different level of relative power
Maintenance is often seen as undesirable but essential drain on resources
Hence must emphasize the importance of maintenance on productivity and profitability 2
Position of Maintenance Dept
Maintenance Dept is part and have to fit into the organization
Where it fits in is very important, don’t let it hide behind some unseen corner
Location within the system is of great importance.

14. 3. Organizational Considerations
Organizational Structure
An organization may have several sections responsible for maintenance
Each section is making separate contribution to the policy, hence its operational area and scope must limit to its own remit 4
Managerial Interaction
Maintenance managers often seen as the poorer relatives within the organizational structure
They always seen as keep asking for money but never produce any obvious or tangible results

15. 3. Organizational Considerations5
Strategic Management Policy
Corporate objective will have direct influence on the Maintenance Policy and set its overall operational parameters on its formulation and execution
Maintenance Policy has to fit into Corporate Objectives such as acquisition, deposition,taking over etc 6
Nature of the Organization
Certain companies may see maintenance as necessary and desirable.
Others may see maintenance as something to be minimized
All depends on the nature of the company

16. 4. Financial Considerations
Financial consideration is one of the main influencing factors on MP
Maintenance is part of the life cycle cost, with few immediate benefits
Level of maintenance depends on availability of funds
Financial Considerations Influencing Maintenance Policy
Company Performance & Profitability
Cash Flow
Size of Direct Labor Force
Arrangements with External Contractors
Previous Expenditure and Effectiveness
Inflation
Variations in Property Market
Variations in Property Stock

17. 4. Financial Considerations
1. Company Performance & Profitability
Maintenance cost money
Correct maintenance cost a lot of money
How much company willing to spend on mtce depends on whether company is making money
Hence, mtce contract must be flexible, with reasonable term and can terminate when required
2. Cash Flow
Mtce take place in several forms, planned, responsive, ad hoc
Planned maintenance well documented and allowed for in cash flow/budget.
Responsive usually require immediate finance and will affect cash flow
Sudden and unforeseen req’t can be incompatible with immediate cash flow
When cash flow is insufficient, quality is usually compromised by adopting the cheapest but may not be the best solution eg. 2nd hand parts.
3. Size of Direct Labor Force (if any)
May have direct worker within the company to carry out maintenance works
These represent fixed overhead which is costly
Modern companies prefers to keep lean fixed overheads and keep core while outsource the non-core functions.

18. 4. Financial Considerations
4. Arrangements with
External Contractors
Types of Maintenance Contractor : -
Internal Maintenance Contractor
Semi-internal Contractor
Full External Private Contractor
Hence, contracts can take place in several forms
E.g. Term contract with schedule of rates (percentage adjustment), fixed price contract etc
5. Previous Expenditure &
Effectiveness
The perceived value of maintenance is often taken as a function of past performance (i.e. how effectiveness when I last spend the money, the return)
To carry out Cost Evaluation to determine effectiveness and value for money
Stop gap vs Permanent Solutions (cost??) eg. Roof leak.
6. Inflation
Inflation will affect the cost of maintenance, as some maintenance contracts can for 3 to 5 years
Hence must factor in the fluctuation and adjustment
For yearly contract, adjustment can be made according to the market condition at the time of renewal

19. 4. Financial Considerations
7. Variations in Property Market
Real estate is a long term investment, and will cut across a long period
Property market varies constantly (ups and downs)
How much to spend is affected by the market (which determine the property value)
Incentive to maintain operates in direct proportion to changes in asset value
More expensive, spend more to maintain
8. Variations in Property Stock
No 2 properties are the same!
Companies with large property asset bases experience changes in the range of property that they retain as stock (investments)
E.g. Property developer launching new tower block for sales, good one taken up and leave behind those with poorer stock, such as facing bin centre
Costly to maintain just 1 unit within a development (as compared to maintaining say 20 units within same development). No economy of scales
New property sometime needs higher maintenance cost due to inherent (if DLP has expires)

20. 5. Economic Considerations1
Organizational
Perceptions
Rooted down to the Organization’s perception and overall attitude towards maintenance
Some are maintenance based and willing to spend a bit more, but others are not 2
Contribution From
Maintained Assets
It is a fact that profit generating departments will get more attention and more money will be spend in maintaining their asset based.
Easier to justify expenditure for profit generating center
For non-profit generating departments, amount spend on maintenance tends to be lower.
A good tool to use will be the effect on long-term corrective maintenance 3
Link between Mtce
and Return
To establish the link between maintenance and return, eg manufacturing
In some cases, such link are readily identifiable. But this is not always the case
Always try to link cost of break down and disruption, to cost of maintenance

21. 6. Environmental Considerations
Environmental factors have the most significant impact on policy, but it is almost the most difficult factor to predict and evaluate
The factors include: -
General Economic Climate
Legislation
Internal Regulations
Tenure and Landlord Agreements
Availability of Alternatives
A. General Economic Climate
Corporate strategy is affected by the Economic Climate, as they are profit-driven and has
to stay competitive
The overall Company Policy will determine how the organization behaves and function
This Policy is affected by operation and the behavior of competitors

22. 6. Environmental Considerations
B. Legislation
Legislations can exist in many forms (Acts, Code of Practices, By Laws,
ISO standards etc)
Legislations will set the minimum maintenance and safety standards for all kinds of assets (i.e. various Code of Practice)
C. Internal Regulations
Organizations usually have internal regulations that set maintenance
standards, or a combination of internal and external regulations on
maintenance
Example Banks often make loans as mortgages, secured against a property asset. They will set minimum maintenance standards on mortgage holders

23. 6. Environmental Considerations
c. Tenure and Landlord Arrangement
Organization own the assets and has a free hand in most appropriate form of
Maintenance Policy. Most company maintain Asset Light Strategy and prefer to rent
than own
In UK context, lease usually is for 5 years and tenant will be responsible for all
insurance and maintenance. Landlord will usually engage 3rd party to conduct audit
before renewals or return the asset upon expiry. Tenant will have to make good or
compensate before return the asset to landlord
D. Availability of Alternatives
Alternatives to maintenance are: -
Leave to deteriorate
Scrapped
Close down part of the operation (need not maintain) and continue to operate the rest
All available options must be evaluated to decide what is the best option

24. Maintenance Standard - Main Topics
Essential for the effective formulation and execution of MP.
Set the quality of maintenance required.
Relate to finance available and level of performance required
Factors Influencing Maintenance Standards 1
Responsibility or Authority for Setting Standards
Standards must be set by Authority who can decide the
acceptable level of maintenance in relation to other objectives
and performance characteristics
Maintenance Mgr often has to set standards based on funds
available, and scale down in time of adversity 2
Quantification of std
Maintenance standards is difficult to quantify and isolate
Manufacturing standards can be easily defined eg. 5,000 bottles a day vs aesthetic considerations for buildings. 3
Maintenance Performance Criteria
Many ways to measure performance: -
Compliance with minimum statutory requirements
Customer satisfaction
Aesthetics and appearance
Short term Vs Long term appearance
Expansion / contraction / disposal 4
Optimal Costing
A process of deciding the combination of mtce types and cost to
get the best value for money
3 main types : - Planned, responsive and cyclic

25. 2. Expressions of Maintenance Standards
Financial Condition and Performance Criteria
Condition Led Maintenance
Operational Reqm’t Led Maintenance
Response Time
Financial Criteria
Measure against how well operation has performed against its financial objectives
Mainly on production line eg. Breakdown rate, downtime
Can also measured in terms of works done against original reqm’t,
no. of complaints
received or responsive
calls
Used to measure how important the maintenance reqm’t is
Conditions can be measured in many ways
But must a rating system that measures the condition of what is being measured.
Identify the most important components within the system
Concentrate the resource in
maintaining these components.
Move onto the less important aspects when finance allows
Standard is express in term of basic minimum standard
Can be done using manufacturer’s recommendation or performance specifications
Standards set in term of response time
In area where long response time is not permitted, e.g.
production line
Sometimes need to stand-by necessary team/parts to give immediate response to minimize down time
Specify performance in relation to the expenditure of
budgets
Common among
bigger companies
Work based on
a detailed 5 years
maintenance program, then establish the expenditure required. Monitor actual against
the projected
Use expenditure to measure how well maintenance is done
- Subject to abuse

26. Execution of the Maintenance Policy
Always think of how to execute while you are planning
Important to demonstrate the ability to execute the policy in the Maintenance Policy (how and
who will do the jobs)
2 Main Considerations on Executing the Maintenance Policy
1. Internal Resources
Sufficient staff within the organization to
execute the policy?
Mtce Mgr needs to produce organization
charts and schedule of internal resources
requirements to identify number of people
required
Staff requirements must be submitted
together with budget plan and schedule for
approval
May need to show in term of daily, weekly
or monthly requirements
2. External Procurement
For companies with limited core resources,
outsourcing is usually the solution to main man
power requirement
This is more the case when high portion of
specialist appointments such as architects,
engineers, surveyors, contractors etc are required
Policy should indicate the internal / external
balance and make adequate provision for fees
To consider in-house vs outsource
Other creative solutions, include flexible hours
staff, part time, contract etc

27. Question
What is cyclical maintenance? How does that affect maintenance planning and execution?