As my last blog finished, we were going to consider areas of asset management that are outside the control of the maintenance organization. There are two articles that have just been published that will highlight one area – BUDGET.
In the USAToday, there were back-to-back articles (February 8 & 9, 2016) that highlight the lack of control that a maintenance organization has over its own budget. The first article -“Park Service Maintenance Backlog Hits a Record High” deals with massive work backlog in the National Parks in the USA. This article shows that the deferred maintenance budget for the Parks was around $12 Billion USD. This article does a good job of explaining deferred maintenance when it said:
“Deferred maintenance is necessary work – performed on infrastructure, such as roads and bridges, visitor centers, trails and campgrounds – that has been delayed for more than one year. Aging facilities, increasing use of park facilities and scarce resources contribute to the growing backlog.”
They clearly defined backlog work as anything delayed for more than 1 year. While this definition may not work for many companies, it works well for governmental agencies, since they budget by that time frame.
Is the $12 Billion backlog situation going to improve anytime soon? Apparently not – since the article continued with:
“While Congress provided increases this year, the annual bill for maintenance in America’s national parks is still almost twice as much as is appropriated,” National Park Service Director Jonathan B. Jarvis said in a statement.”
Let’s see… a maintenance budget that is only 50% of what is required to properly maintain the National Park system’s assets. This is a condition that should sound familiar to most maintenance/ asset managers in the world. Someone in the Park Service has an approximation of what it will take to properly maintain the assets and then someone in Congress who has authority over the budget chooses to fund a study of the African fruit fly over properly maintaining the Park Service assets. Doesn’t that sound a lot like the Plant Manager choosing to fund new construction in the plant rather than fund properly maintaining existing assets? Or perhaps the CFO mandating a 15% cut in expenses across the company regardless how it impacts operational capabilities. Maintenance/ Asset managers seem to face similar problems, whether they are in the public or private sectors.
The follow up article to “Park Service Maintenance Backlog Hits a Record High made this statement:
“Deferred maintenance has been a problem at National Park Service parks, historic sites and other areas for decades. The Government Accountability Office pointed out problems with the parks’ maintenance management system as early as 1984; found a maintenance backlog of almost $2 billion in fiscal 1987, about $4 billion in today’s dollars; reported on $6 billion in deferred maintenance in 1997, about $9 billion today; and then pointed out in 2003 that the agency, which was putting a new system in place to keep track of maintenance needs, had vastly underestimated the amount of upkeep needed.”
This sounds suspiciously like a MASTER DATA integrity problem. There was a system (likely a CMMS/ EAM System) in place back in 1984 that apparently was not acceptable to the GAO (perhaps not fully integrated and having poor data integrity) and then almost 20 years later it is being replaced. In the interim, the maintenance backlog grows from $2 Billion in 1987 to $12 Billon today. Using a baseball analogy, we not only “took our eye off the ball”, we were “beaned” by it. Wouldn’t it seem logical that any organization experiencing an exponentially growing maintenance/ asset management backlog would take action before they go out of business? Maybe changing out the CMMS/ EAM system is the answer; but it is not likely to solve the problem unless we understand why the previous system failed.
The purpose of this blog was not to pick on the US Government or any company, however, the commonality of maintenance/ asset management problems are undeniable. If 80 to 90% of the life cycle cost of an asset is incurred after it is commissioned, wouldn’t companies (and governments) expect to have to properly budget for these expenses?
Perhaps a review of the asset life cycle would be in order to properly understand the relationship between asset management and maintenance management. We will begin this topic with the next blog.
