The True Cost of Deferred Maintenance in the Long Run

Whenever you drop important maintenance work due to limited staffing, funds, or time, the result is deferred maintenance—often the cause of unexpected breakdowns.

Maintenance issues keep bubbling under the surface of shrinking operating budgets and neglected infrastructures for a long time. Then, maintenance problems grow bigger, and you start experiencing tangible consequences.

This article has everything you need to know to identify maintenance problems, minimize obstacles, and implement changes to achieve effective maintenance operations.

What is deferred maintenance?

Deferred maintenance is the practice of postponing necessary repairs, upkeep, and maintenance tasks on buildings, infrastructure, or assets.

It occurs when maintenance activities that should have been performed in a timely manner are delayed or neglected due to various reasons, such as budget constraints, resource limitations, or competing priorities.

The result of deferred maintenance is usually:

• System failure
• Equipment deterioration
• Unexpected breakdown
• Higher maintenance cost

Time to look at some examples.

Examples of deferred maintenance

This section walks you through how deferred maintenance looks different across industries.

Deferred maintenance in institutions of higher education

The consequences of deferred maintenance in higher education can be detrimental. Aging facilities and infrastructure that are not properly maintained can result in deteriorating conditions, reduced functionality, and potential safety hazards for students, faculty, and staff.

For instance, outdated electrical systems, malfunctioning HVAC systems, or aging plumbing can lead to power outages, uncomfortable learning environments, or even health risks.

These issues can negatively impact the overall student experience and hinder the institution's ability to provide a conducive learning environment.

Moreover, the accumulation of deferred maintenance can have long-term financial implications. The cost of repairs and replacements increases as deferred maintenance projects become more extensive and complex over time.

Additionally, the ongoing operational inefficiencies resulting from neglected maintenance can lead to increased utility costs, decreased energy efficiency, and higher long-term operating expenses.

Deferred maintenance in commercial real estate facilities

Worn-out or damaged fixtures, outdated lighting systems, malfunctioning HVAC units, or neglected plumbing can negatively impact the shopping experience for customers. Unaddressed maintenance issues can create an impression of neglect and reflect poorly on the brand image.

In addition, deferred maintenance can contribute to safety hazards, such as uneven flooring, faulty electrical systems, or inadequate security measures, posing risks to both customers and employees.

Another consequence of deferred maintenance is the potential impact on business operations and profitability. As maintenance issues accumulate over time, the functionality and efficiency of retail facilities can decline.

Inadequate maintenance can also result in increased energy consumption, utility costs, and operational inefficiencies, leading to financial strain and decreased profitability for retailers.

Suggested read: Why Space Management is SO Important for Operational Efficiency

Deferred maintenance in healthcare facilities

Deteriorating infrastructure, malfunctioning medical equipment, and neglected building systems can compromise the quality of healthcare services and patient outcomes.

Outdated electrical systems or unreliable HVAC systems can disrupt critical operations, affect patient comfort, and potentially compromise infection control measures.

Further, it can contribute to safety risks, such as uneven flooring, inadequate lighting, or faulty fire protection systems, jeopardizing the well-being of patients, staff, and visitors.

Another consequence of deferred maintenance is the potential financial burden it imposes on healthcare facilities. The cost of repairs and replacements tends to escalate over time, as neglected maintenance projects become more extensive and complex.

These financial strains can impede the ability of healthcare facilities to allocate resources to essential patient care initiatives and investments in technological advancements.

Now that you know the what, let’s dive deep into how to handle deferred maintenance.

Common reasons to defer maintenance

Facility managers often cite limited resources as the main reason for deferred maintenance—let’s look at what that actually means.

• No preventive maintenance strategy in place: Many organizations use corrective maintenance to deal with asset repairs, maintenance, and replacement. Since they don’t have a preventive or predictive maintenance strategy in place, they end up deferring maintenance tasks.
• Limited tools: Sometimes, you may not have the right tools or inventory to do a job and therefore defer maintenance.
• Tight budget: Limited maintenance budget pushes companies to prioritize operating costs and puts expensive repairs on the back burner.
• Lack of manpower or skills: Teams lacking enough technicians often don’t have the bandwidth to handle unexpected breakdowns. Some companies may hire third-party contractors with the necessary expertise and skills. The problem is that those contractors may not immediately be available to take the job. All these manpower or skill-related issues force you to postpone maintenance work.

Now, you may think deferred maintenance is unavoidable at times. You’re right! So, what is a good reason for deferring maintenance?

If you’re close to spending the allocated maintenance budget, you may defer maintenance work for the next budget cycle.

Companies with this kind of budget issue should focus on strengthening preventive maintenance programs.

If you don’t encounter faults or issues during regular inspections, you may be better off with scheduled maintenance based on operation and maintenance (O&M) manual guidelines.

Also, remember to maintain shorter backlogs for high-risk assets.

However, no reason is good enough to postpone maintenance for a long time because every deferred maintenance task carries some risk.

Suggested read: How to measure asset reliability with a bathtub curve?

Risks of deferring maintenance

Deferring maintenance for low-risk, easy to replace parts or equipment is okay. However, you should take into consideration the breakdown or deterioration of such parts and its impact on operations.

Deferring maintenance for any piece of equipment means it runs damaged for a while, impacting its life span and productivity negatively, and damages your facility in the long run.

Check out these risks before deferring maintenance:

• Breakdown maintenance costs: Deferring maintenance for long increases instances of breakdown maintenance, which come with operational disruptions, and the high costs of unplanned downtime.
• Reduced production capacity: Lack of efficient equipment negatively impacts your product delivery schedule and production capacity. Moreover, inefficient assets consume more energy and make infrastructure asset management expensive.
• Safety hazards and compliance issues. Postponing maintenance for too long means you’re creating an unsafe working environment for tenants and workers. Plus, you’re likely to attract hefty fines from the Occupational Safety and Health Administration (OSHA).

You can avoid all these by creating a simple, effective process for handling maintenance backlog—let’s see how.

How to manage maintenance backlogs?

One way to deal with deferred maintenance is to create backlogs and execute those tasks when possible. Follow these simple steps to get started:

• Issue discovery: Record issues in a computerized maintenance management system (CMMS) after spotting them.
• Issue analysis: Wait for the maintenance team to analyze those problems and create work orders (or better, automate it with a CMMS)
• Work order creation: If your team can’t handle the tasks immediately due to a lack of resources, add them to the backlog.

As you create a backlog, remember to categorize these tasks by:

• Usage frequency: How frequently do you use this asset?
• Critical resources: Is it a critical resource for production?
• Risks and costs: How much will it cost to repair this asset? Is it safe to defer maintenance?
• Urgency: Can the facility run efficiently in case of an unexpected asset failure?

Once you create a backlog, you’ll be better positioned to handle deferred maintenance tasks on time.

Steps to create a deferred maintenance workflow

How do you know if you should defer a maintenance activity?

Facilities generally use a deferred maintenance workflow to decide what to do on priority and what can wait.

A deferred maintenance workflow involves:

• Analyze preventive maintenance tasks: Maintenance activities are of two types—preventive and reactive. Facility managers and technicians use preventive maintenance checklists to spot issues across buildings and assets. These tasks include routine maintenance tasks that you take up to ensure assets, equipment, and building longevity.
• Understand reactive maintenance issues: Technicians also look at reactive or corrective maintenance tasks for assets that have failed and need immediate attention.
• Look at capital renewal tasks: Capital renewal programs systematically manage asset replacement and refurbishment to ensure the healthy lives of assets.
• Check resources and bandwidth: At this stage, you look at available resources (time, money, labor) to complete all preventive, reactive, and capital renewal jobs. Then, you prioritize them based on your bandwidth and maintenance priority.
• Take maintenance decisions: Now, it’s time to schedule the priority tasks and add non-critical tasks to the maintenance backlog. This backlog creates your deferred maintenance queue.

Depending on your organization type and size, the details of the deferred maintenance workflow may vary.

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How to reduce deferred maintenance?

While deferred maintenance is inevitable for some assets, you must have the right strategy to company it.

Reducing deferred maintenance becomes easier with conducting inspections, auditing maintenance, automating preventive maintenance, and prioritizing assets with higher contributions to revenue.

• Automate preventive maintenance program: Maintaining assets before they break down is key to avoiding deferred maintenance. A connected CMMS solution alerts you if an asset is likely to experience failure. You can significantly reduce the deferred maintenance backlog by addressing the asset issue ahead of time.
• Prioritize high-value maintenance tasks: The right maintenance management tool will also help you dive deep into the cost of not addressing asset issues. That way, you can easily calculate your runway before an asset fails. On the other hand, those tools also tell you what equipment failure can cause serious problems. Evaluating both and prioritizing high-value maintenance activities lets you prevent deferred maintenance.
• Audit and log maintenance activities: Having real-time asset and resource data helps you prioritize tasks and make decisions. A top-class CMMS platform like Facilio keeps you on top of resource allocation, authorization, real-time reporting, asset lifecycle analysis, and much more. Plus, it offers data-driven insights into deferred maintenance orders and audit reports.

If you’re considering raising funding requests to the management team, CMMS software can help you there too.

For example, it can show whether deferred maintenance will be more expensive than preventive maintenance for an asset. With this data, you can get stakeholder buy-in faster.

Suggested read: When to Use Which Maintenance Strategy: A Decision-Maker's Guide

Reverse the deferred maintenance mindset

When you execute the right maintenance at the right time, you start building long-term, sustainable maintenance efficiency.

Quick recap, keep these points in mind to reduce deferred maintenance:

• Shift the focus from reactive repairs to proactive preventive maintenance.
• Regularly inspect assets, equipment, and infrastructure to identify potential issues before they escalate.
• Implement a CMMS to track maintenance activities, schedule tasks, manage vendors and inventory, and monitor performance.
• Utilize data and analytics to identify trends, optimize maintenance schedules, and make informed decisions to improve equipment reliability and operational efficiency.

With the right tools and the power of automation, your maintenance team is empowered to keep your assets running optimally, facilities productive, and employees safe.

Don't let deferred maintenance threaten the safety and productivity of your facilities, schedule a demo with Facilio today!