The Inverse-Square Rule for Deferring Maintenance

When planning maintenance budgeting and making important decisions as to the risks associated with deferring maintenance we need a reliable tool to compute the consequences for deferred action. This tool needs to be able to compute the consequences of deferring action not just for direct maintenance breakdown costs but the cost consequences to the whole company to include:

Direct Breakdown Maintenance Costs - This would include the parts and labor to correct a breakdown event.

Indirect Operational Costs - This would include all measurable operations costs to the company incurred because of the breakdown event. Example would be lost man/hours, idled workers, ruined materials, extended rental costs, known lost sales, etc.

Intangible Costs - These costs are more difficult to acquire but are just as important. Examples would be customer dissatisfaction with your performance, lost opportunity, estimated lost sales, legal issues, unwanted attention from regulators, etc.

When this total cost for a breakdown event to the system has been computed, take the square-root of the number. This will be the cost of the primary failure part. If the number is too big, the event has progresses multiple levels of failure and you must continue to take the square-root each time.

When you examine the number for each level of failure it will represent the cost of intervention at that level.

The link below is to a worksheet that I have created that will help you quantify these consequences when budgeting maintenance and making critical operations and maintenance (O&M) decisions.

Worksheet for computing the
Inverse-Square Rule for Deferred Maintenance

If you should care to visit concerning the application of this knowledge to your O&M decisions, I am at your service. ~ David Geaslin