How Faulty Maintenance Exposes Your Company to Risk

Inventory Warehouse Computerized Management Solution

The biggest threats to your company often seem to be related to your actual business; competition, operating overhead and evolving customer needs seem to take precedence over everything else. But there are hidden vulnerabilities in many companies that arise out of simple negligence and a failure to properly maintain their facilities and operations.

Unseen Risks to Your Company

From a liability standpoint, threats to the company are everywhere. Customers could get hurt on-site, either through a slip-fall injury or a food-borne illness. Faulty equipment, vehicles and even shoddy building maintenance can put anyone on your property at risk, including employees.

Your risks extend outside the office as well. Hidden costs can be found in a poorly maintained fleet of vehicles. Cars, trucks and other service vehicles need to be maintained to prevent accidents and use effective planning to replace old or faulty vehicles according to depreciation values and maintenance cost.

And still other threats are much less concrete, operational inefficiencies that, over time, can inflate your overhead and bleed away profitability. A haphazard maintenance system, outdated inventory control scheme or simply a lack of foresight in ordering from vendors can quietly add costs that could otherwise be avoided through proper planning.

Simplifying Maintenance through Automated Scheduling

Having an effective maintenance management system in place helps to automate much of the scheduling and maintenance tracking that falls through the cracks when you’re just using a spreadsheet and calendar. For fleet management, for instance, having a computerized management system that tracks all vehicles over their lifecycle ensures that scheduled maintenance happens with minimal human intervention. That kind of system helps lower overall costs through preventative maintenance like brake checks, fluid changes and regular safety tests. Even the lifecycles of those kinds of assets can be tracked and adjusted to maximize resale value and track depreciation.

The benefits of automation go beyond just scheduling. A fully integrated management solution handles, not just the scheduling and inventory that is required to run a business, but helps target seasonal fluctuations in demand so you can plan ahead on ordering or better negotiate with vendors. That kind of long view from an operational standpoint helps you to see where your real operational inefficiencies are.

The Cost of Faulty Maintenance

The 2007 bridge-collapse in Minnesota could have been prevented with proper preventative maintenance. Just one of several lawsuits from that disaster was settled for $52.4 million in 2010, a number that likely would have been much larger at trial and which had a direct impact on the shareholders of the company that settled. The total paid out by contractors and the state totaled more than $95 million. Had the state done a better job of evaluating its preventative maintenance needs, the tragedy of that bridge failure could have been prevented and the lawsuits avoided.

And unlike large corporations and state governments, regular businesses can’t afford to absorb these types of losses. While the dollar amounts at stake might not be as high as these, the danger to the existence of your business from this kind of liability is not less acute.

The main concern with maintenance, of course, is that it can easily turn into a black hole of resources when improperly managed and scheduled. The personnel who maintain your facilities aren’t contributing to direct profitability, so it’s easy to see them as just an expense. But these hidden costs are often hard to quantify until you have a solution in place to track your maintenance, inventory and purchase order systems in the first place.

Author bio: Grant Smith is Deputy Marketing Manager for ManagerPlus, a company that builds easy-to-use computerized maintenance management software that is customized to their customers’ industries. You can learn more about CMMS software here. When he isn’t writing about facilities management and preventative maintenance, you can find him singing alone in his car or clinging desperately to a rock face somewhere in the mountains.

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