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Rodney Timm, director of Property Beyond, demystifies the perpetual confusion and misunderstanding surrounding life cycle FM Innovation Awards HVAC & Refrigeration
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The credibility of the facilities management industry is at stake with ongoing confusion around planning for asset maintenance Technology & Software
and budgets. Sector specialists, seeing the frustration of organisations and governments-related maintenance planning, have
started to develop life cycle replacement and asset management models to provide work plans and expenditure assessments
needed to maintain assets at the required level of functionality. However, the understanding of these models and definitional Events
issues tend to perpetuate confusion in the industry.
no event

MAINTENANCE PLANNING

Consistency related to maintenance definitions is important. Maintenance relates to the activities necessary to retain assets in
the appropriate conditions to achieve the required service potential over the projected life cycles. Ideally, maintenance policies
should be established in frameworks to support maintenance-related decisions. These policies should define service standards
required to achieve quality objectives supporting specified levels of availability and functionality of the assets. These will
likely be contained in a variety of documents such as codes of practice, mandatory requirements, operating manuals and
maintenance schedules.

Within these documents and maintenance plans, the use of terminology can cause confusion. Although debates continue about
the exact definitions, the common maintenance categories can be simply defined as follows:

● reactive/ad hoc maintenance – actions performed, usually as a result of failure, to restore an asset to its operating or desired
condition

● planned maintenance – activities that are specific asset initiatives or recur on a predictable basis, including items of
statutory, routine and preventive maintenance

● statutory/mandatory maintenance – works that must be done to meet statutory requirements, such as testing and tagging of
fire equipment

● routine/cyclical maintenance – activities required to achieve normal operating efficiencies such as servicing elevators or
cleaning air-conditioning filters

● preventive maintenance – the systematic process of inspections, detections and prevention of incipient failures such as signs
of corrosion on structural steel elements

● programmed maintenance – work assigned for a specific period such as a financial year or during an annual shutdown
period and may include items of planned maintenance, and

● deferred and backlog maintenance – although marginally different, both relate to work items that should be done within a
defined period to prevent deterioration of assets and functionality, but not carried out because of funds shortage or planning
inadequacies. Maintenance plans can be formulated into these categories using relevant asset data and information. In turn,
these plans will define the program of activities and the maintenance budget.

CONDITION AUDITS

One challenge in maintenance planning is determining the required maintenance activities. Although a condition audit can be
an expensive exercise for a portfolio of property assets, it is usually the key to understanding the baseline condition of the
assets. Condition audits can vary significantly in quality, usually based on the initial brief and the budget. Problems that arise
may be related to the default five-point rating scale for buildings, elements or components.

The key considerations for condition audits are knowing what is required, preparing detailed briefing, expecting to pay a little
more and, once completed, making sure the data is captured appropriately to form the basis for future updating and planning.

ASSET LIFE CYCLE PLANNING

Life cycle planning is undertaken to determine future potential expenditure, both operational and capital, usually at a building-
element level. The models are usually based on applied predictive algorithms considering condition, age, criticality and gross
replacement cost of the elements under review. These cost estimates are aggregated into spreadsheets and graphics for the
asset managers to seek budget allocation from financial controllers. Life cycle planning represents essential expenditure to
maintain the operational integrity of the assets and avoid the build-up of future backlog maintenance. But often there is
disappointment due to the lack of enthusiasm from the finance department and the asset managers walk away empty-handed.

Although the principles behind these life cycle costing models is sound, understanding what they really mean and their use in
maintenance planning is less certain. Essentially, these models have a starting base of splitting a building asset into core
elements, such as roofs and internal finishes, and possibly into component levels such as windows and carpets. Next, these
elements or components are allocated probable life spans based on industry standards, and finally they are attributed gross
replacement costs. Combined into a financial model, this results in the projected life cycle cost profile of a building. However,
too often the outcome of this model is considered too literally.

Life spans of elements and components are not exact – they may last much longer or less than the industry average.
Additionally, the gross replacement cost rate is usually an average estimate sometimes derived from different building types
and hence the outcome can be erroneous. Although this method can work for newly completed buildings, when projected life
cycles are more predictable and costs are relatively well-known, applying the model to older assets can be more challenging. It
is likely that the various elements in these older buildings have been maintained to different standards and replacement costs
are less certain. It is highly unlikely, however, that the resulting life cycle plan for replacing building elements is predictively
accurate or that it provides specific details of backlog maintenance.

The use of life cycle plans in maintenance strategies is thus limited. They are not maintenance plans indicating definitively
what elements need attention or are to be replaced in the short- to medium-term. Life cycle plans are useful theoretical tools
that provide indicative maintenance programs and expenditure pattern for a portfolio of assets based on many assumptions and
generic inputs.

ASSET MANAGEMENT PLAN (AMP)

An AMP is usually the instrument referencing many sources and documents that should be used to detail portfolio strategies
including implementation actions for the short- to medium-term. This plan will set a program of asset creation, operation,
maintenance, refurbishment, replacement, disposal and performance monitoring at the desired service levels to support the
operational needs of the organisation.

The key to structure these plans is understanding the business operation overlay, as it will reflect future operation platforms
and how the service delivery is evolving. Asset strategies emerging from this consideration may include portfolio changes
such as co-locations, consolidations and moving to technology or non asset-based solutions. In many cases, these decisions are
unlikely to be related to maintenance considerations.

Equally important are the financial imperatives related to capital constraints, as well as asset operation cost limits and targets.
Capital constraints affect decision-making in maintenance and capital works strategies, and also impact asset funding models.
Asset operation or occupancy costs considerations also include other costs such as rent, statutory charges and utilities.

AMPs drive asset decisions, which in turn contribute to the success of a facility. Using a bottom-up or a top-down approach
with inputs such as operational costs, condition audits and life cycle plans inclusive of financial and business strategies
ultimately define the individual asset strategies and maintenance plans that must be implemented.

Rodney Timm is the director of Property Beyond Pty Ltd.

Asset Management Building and Property Management

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