Preventive maintenance has been more popular in principle than in practice over the years. One scarcely can argue with the idea of keeping equipment well maintained to extend its expected life and avoid future repair costs. Less clear is an understanding of the actual relationship between the cost of preventive maintenance and the returns such activities can be expected to deliver. This article describes a process of assessing the value of preventive maintenance programs and activities by analyzing them in terms of key financial ratios. Engineers and building operators trying to persuade property owners and managers to invest in preventive maintenance (PM) for their portfolios offer a range of solid arguments: “The equipment will perform better.” “Equipment life will be extended.” “Repair costs will fall.” “Downtime will be reduced.” “Tenant satisfaction will increase.” “The manufacturer says we need to do it.” Although most owners acknowledge these issues, they may be more concerned with saving money and obtaining optimum value from their investments. Given that perspective, a more convincing argument for preventive maintenance would demonstrate that PM generates a solid rate of return in terms of risk mitigation and asset protection. Anecdotal evidence does suggest that preventive maintenance is valuable. Until now, however, no one has placed a firm value on the relationship between costs and returns. For one thing, the economic value of preventive maintenance is difficult to determine. No specific statistical methods exist. No empirical studies have been performed. How does one quantify the extended life of a chiller? How can one know how much longer a compressor will last if it receives proper preventive maintenance than it would if no PM took place? Source: Jones Lang LaSalle Wei Lin Koo, Tracy Van Hoy, P.E. https://media.licdn.com/dms/document/media/D4D1FAQHW1vplqy5n6A/feedshare-document-pdf-analyzed/0/1693660134739?e=1697068800&v=beta&t=4TOJ9CwPEhFZzeonU-LIFWUUFWXfkblHi4hyhtaEnOs