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Greeting Maintenance & Reliability Proffesionals

I wanted to find out what type of framework do you guys follow when setting your 1 year, 3 year & 5 year maintenance budget?

Would be grea to find out how you guys do it?

Cheers

Greeting Maintenance & Reliability Proffesionals

I wanted to find out what type of framework do you guys follow when setting your 1 year, 3 year & 5 year maintenance budget?

Would be grea to find out how you guys do it?

Cheers

I've worked in the maintenance and reliability at 3 different fortune 500 companies and the process tends to vary a little at each company.   I would say the basic methodology looks at three areas to build the budget from the ground up.  1.  Labor - this is predicated on the amount of work needed to support the production line based on line time available.  Shorter maintenance window with limited condition based maintenance will require larger work force.  A more reactive maintenance program will require a larger work force to support than a highly condition based maintenance program.  Whether you use autonomous maintenance in your site will also determine the amount of headcount you will carry on your budget assuming autonomous maintenance is not charged over to the maintenance budget.  We include in this labor budget a cost for training and development per individual to ensure we have money to adequately train our work force.  We just use a fixed number per person in the budget times the number of people.  If there is specialized gaps due to labor shortages then you may want a line item to cover that with specialized training.  For instance, there were several years where we couldn't hire trained  maintenance labor so we ran an apprenticeship program with a local community college for a few years to build up our staffing.   This helped to close the gap but was not a normal cost item year over year.  2.  Replacement parts -  these come from two areas of the maintenance process, PM / Machine overhauls which tend to be predictable as to the cost and breakdown which tend to be unpredictable.   If you take all of your known PM's and parts needed to execute those PM's plus your known equipment overhauls at 1, 3, 5 and 10 year marks and have all of them built into your CMMS system then you can run reports to project the work which will also include the projected labor to complete.   Reactive or breakdown work while not easily predictable,  on a stable production system when rolling up for a plant tends to be very repeatable year over year if you take into account inflation.  We take this as a percentage of parts spend to get the total.  3. Maintenance services - what contract labor will you utilize in your site to support your processes with specialized skills.  In a manufacturing site that has historical data then you know what tasks are contracted out and this again tends to be more related to overhaul type work or specialized repairs.  For example we have a certified tank inspector in to inspect a certain population of our tanks each year.  We budget for that expense and spread the population over several years cycle for all tanks in our facility.   We then roll up the sum of these 3 areas an estimated budget,  add in adjustments for inflation.   As a check on this we will pull a 5 year historical spend by production line and use a fit curve to understand if the projected budget for the future year will follow that curve and if not can we specify why IE we have a 10 year overhaul that will shift the cost and if we remove that it will fit the curve.   We then monitor by week, maintenance spend by production line.   There is typically an Engineer who is responsible for that line and therefore the budget.   By watching it each week, we can stay on top of our spend.  As a side note we track as a sub set of our maintenance spend and  the budget needed for our overhauls because often this planning and purchasing period may be 8 months and we want to make sure we don't drop the spend in at the end of 8 months and get a surprise so it is budgeted by month for when we expect those costs to hit then monitor the overhaul budget and spend by month.  While not a perfect process it is allowing our site to come in less than 1% variance to our budget each year.

Greeting Maintenance & Reliability Proffesionals

I wanted to find out what type of framework do you guys follow when setting your 1 year, 3 year & 5 year maintenance budget?

Would be grea to find out how you guys do it?

Cheers

Thank you for taking the time to share this, this is incredibly helpful and very well structured. I really like how you've tied labor, parts, and services together, especially with the validation against the 5-year historical spend. That level of discipline around forecasting and weekly tracking is impressive.

One question I had as I was reading through this-when you're building out the budget, do you factor in historical failure data or condition-based indicators (such as trends from predictive maintenance tools) to refine the reactive or overhaul portions of the budget?

I'm curious how much of that "repeatable year-over-year" spend could potentially be shifted or reduced if failure patterns or early indicators were more proactively incorporated into the planning process.

Would love your perspective on that.

I've worked in the maintenance and reliability at 3 different fortune 500 companies and the process tends to vary a little at each company.   I would say the basic methodology looks at three areas to build the budget from the ground up.  1.  Labor - this is predicated on the amount of work needed to support the production line based on line time available.  Shorter maintenance window with limited condition based maintenance will require larger work force.  A more reactive maintenance program will require a larger work force to support than a highly condition based maintenance program.  Whether you use autonomous maintenance in your site will also determine the amount of headcount you will carry on your budget assuming autonomous maintenance is not charged over to the maintenance budget.  We include in this labor budget a cost for training and development per individual to ensure we have money to adequately train our work force.  We just use a fixed number per person in the budget times the number of people.  If there is specialized gaps due to labor shortages then you may want a line item to cover that with specialized training.  For instance, there were several years where we couldn't hire trained  maintenance labor so we ran an apprenticeship program with a local community college for a few years to build up our staffing.   This helped to close the gap but was not a normal cost item year over year.  2.  Replacement parts -  these come from two areas of the maintenance process, PM / Machine overhauls which tend to be predictable as to the cost and breakdown which tend to be unpredictable.   If you take all of your known PM's and parts needed to execute those PM's plus your known equipment overhauls at 1, 3, 5 and 10 year marks and have all of them built into your CMMS system then you can run reports to project the work which will also include the projected labor to complete.   Reactive or breakdown work while not easily predictable,  on a stable production system when rolling up for a plant tends to be very repeatable year over year if you take into account inflation.  We take this as a percentage of parts spend to get the total.  3. Maintenance services - what contract labor will you utilize in your site to support your processes with specialized skills.  In a manufacturing site that has historical data then you know what tasks are contracted out and this again tends to be more related to overhaul type work or specialized repairs.  For example we have a certified tank inspector in to inspect a certain population of our tanks each year.  We budget for that expense and spread the population over several years cycle for all tanks in our facility.   We then roll up the sum of these 3 areas an estimated budget,  add in adjustments for inflation.   As a check on this we will pull a 5 year historical spend by production line and use a fit curve to understand if the projected budget for the future year will follow that curve and if not can we specify why IE we have a 10 year overhaul that will shift the cost and if we remove that it will fit the curve.   We then monitor by week, maintenance spend by production line.   There is typically an Engineer who is responsible for that line and therefore the budget.   By watching it each week, we can stay on top of our spend.  As a side note we track as a sub set of our maintenance spend and  the budget needed for our overhauls because often this planning and purchasing period may be 8 months and we want to make sure we don't drop the spend in at the end of 8 months and get a surprise so it is budgeted by month for when we expect those costs to hit then monitor the overhaul budget and spend by month.  While not a perfect process it is allowing our site to come in less than 1% variance to our budget each year.

Greeting Maintenance & Reliability Proffesionals

I wanted to find out what type of framework do you guys follow when setting your 1 year, 3 year & 5 year maintenance budget?

Would be grea to find out how you guys do it?

Cheers

Greeting Maintenance & Reliability Proffesionals

I wanted to find out what type of framework do you guys follow when setting your 1 year, 3 year & 5 year maintenance budget?

Would be grea to find out how you guys do it?

Cheers

Great practical breakdown from both Scott and Mark. One thing I'd add from a maintenance reliability perspective: the budgeting framework only works as well as your asset criticality ranking supports it. When you know which assets carry the highest operational risk, you can allocate budget with much more confidence across your PM, breakdown and capital renewal lines.

For professionals preparing for the CMRP, this is exactly the kind of thinking the Business & Management domain tests: connecting maintenance investment decisions to organizational risk and business outcomes, not just historical spend.

Greeting Maintenance & Reliability Proffesionals

I wanted to find out what type of framework do you guys follow when setting your 1 year, 3 year & 5 year maintenance budget?

Would be grea to find out how you guys do it?

Cheers

Greeting Maintenance & Reliability Proffesionals

I wanted to find out what type of framework do you guys follow when setting your 1 year, 3 year & 5 year maintenance budget?

Would be grea to find out how you guys do it?

Cheers

Greeting Maintenance & Reliability Proffesionals

I wanted to find out what type of framework do you guys follow when setting your 1 year, 3 year & 5 year maintenance budget?

Would be grea to find out how you guys do it?

Cheers