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Is there a rule of thumb for budgeting for unplanned maintenance? I have a new plant and am thinking that a percent of asset cost could be used to determine an amount to budget for unplanned maintenance. Not sure what that percent should be or if there is a better approach. I appreciate anyone's input on this.

Good Morning ,

It is hard to say there is a rule of thumb .What industry are you in ? 

I would suggest a few things if it is manufacturing plant that is worth $200M>

• In my experience with new plant; The first 2  years are impacted by early equipment failure due to number of things that include  new equipment commissioning , install issues ,new operators , new maintenance team, new santitation team,even if the personnel is trained but not familiar with the equipment, you will see some cost increase. It will basically seems like it cost more to run the plan . I would say plan  for 5% of the total asset value to be your total maintenance budget during the first year. for example if it cost you $200M to build the plant plan for $1M as your maintenance budget for the first year. As you get your actual spend you will be able to adjust. If your team is build around a good start up and relibilty strategy you will be able to reduce spend.

if it is relatively small  and less complex plant.

• I would suggest  about 1%.   if the total asset value is $100000 you can start with $1000. But it is very crucial that develop a good start up strategy.

Is there a rule of thumb for budgeting for unplanned maintenance? I have a new plant and am thinking that a percent of asset cost could be used to determine an amount to budget for unplanned maintenance. Not sure what that percent should be or if there is a better approach. I appreciate anyone's input on this.

Hi Robert, 

For fixed plant I have seen anywhere from 2.8-4% of ERP being used for plant in reasonable condition. A little higher for plant that has been run down. These rules of thumb are typically used if don't have equipment strategies in place and Zero Based Budgets. If plant has good PM's in place with costings, then have seen budgets use an 80:20 rule of 80% planned costs which can be calculated reasonably accurately then allow 20% for unknown costs. 
Regards

Marcus

Good Morning ,

It is hard to say there is a rule of thumb .What industry are you in ? 

I would suggest a few things if it is manufacturing plant that is worth $200M>

• In my experience with new plant; The first 2  years are impacted by early equipment failure due to number of things that include  new equipment commissioning , install issues ,new operators , new maintenance team, new santitation team,even if the personnel is trained but not familiar with the equipment, you will see some cost increase. It will basically seems like it cost more to run the plan . I would say plan  for 5% of the total asset value to be your total maintenance budget during the first year. for example if it cost you $200M to build the plant plan for $1M as your maintenance budget for the first year. As you get your actual spend you will be able to adjust. If your team is build around a good start up and relibilty strategy you will be able to reduce spend.

if it is relatively small  and less complex plant.

• I would suggest  about 1%.   if the total asset value is $100000 you can start with $1000. But it is very crucial that develop a good start up strategy.

Is there a rule of thumb for budgeting for unplanned maintenance? I have a new plant and am thinking that a percent of asset cost could be used to determine an amount to budget for unplanned maintenance. Not sure what that percent should be or if there is a better approach. I appreciate anyone's input on this.