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or twice and initially ignored. But when it doesn’t go away, maintenance—know that the longer you operate equip-
what do you do next? In many cases, immediate attention is ment that needs repair, the more it will cost to fix it. They
given to the problem. Maintenance is performed and oper- may think the worst case will be something in the nature
ation continues. But sometimes, correction of the develop- of twice as much. Geaslin himself initially thought deferred
ing problem is deferred to a later time (often for legitimate maintenance might cost three to four times as much as a
reasons). One scenario allows a short time delay—say, the timely repair. But in his research, he discovered that the con-
end of the day—and troubleshooting and corrective action is sequence of deferring maintenance is not just higher costs,
taken before the next level, a failure, occurs. Yet another sce- not even two or even four times more. The real penalty for
nario allows postponing the “non-essential” repairs because deferring maintenance that becomes a breakdown event is
of cost, labor shortage, or just the ongoing demands of 15:1 at a minimum, and often exceeds 40:1. So Geaslin cre-
(seemingly more important) operations. ated his theory of the “Inverse Square Rule of Deferred
So what happens when you let this dangerous atti- Maintenance” to explain how he arrived at this base number.
tude exist that fosters this type of deferred maintenance? “If a part is known to be failing and the repair is deferred
You have probably all done it from time to time. The rea- and allowed to remain in service until the next level of fail-
sons—not enough staff, competing priorities, not enough ure, the resultant expense will be the square of the cost of the
resources, not enough cash—are less important than the failed part,” according to Geaslin.
consequences. One of the crucial mistakes made when Geaslin points out that this is why a $40 worn-out brake
dolling out maintenance dollars as outlined by David Todd shoe left in service—until the brake shoe’s rivets damage the
Geaslin of the Geaslin Group (specialists in managing brake drum, the drum ruins the core value of the shoes, the
maintenance activities) is forcing maintenance spending truck breaks down on the road, a second truck and driver
into specific lumps of time that do not meet the needs of has to be dispatched, the load transferred, and one driver
machines, thus creating the need for deferred maintenance. dead-heads back with the tow truck—results in an expense
This in turn can lead to the risk of a next-level failure that of the square of $40 and becomes $1,600. If the brake prob-
can impact passengers and exponentially increase the initial lem causes a serious personal injury accident, the cost can
costs of repair. easily square again to $2.5 million!
Geaslin goes on the say that many executives—who When you outline the additional costs above and beyond
may be far removed from the consequences of deferred the cost of materials and labor—such things as getting that

COMPUTING THE TRUE RISK/REWARD RATIO (BREAKDOWN EVENT COST)

The worksheet to the right is provided to organize the $
Operate to Failure costs company wide. Direct Maintenance Cost
Labor Costs, Parts Costs
1 Enter the direct maintenance cost to repair the
breakdown event. Indirect Costs $
Lost Man/Hours, Ruined Materials
2 Enter all known measurable costs that are not Known Missed Sales Etc.
maintenance related such as known missed sales or
lost plant man/hours. Intangible Costs
Customer Dissatisfaction $
3 Enter any intangible costs such as customer Unwanted Regulator Attention
dissatisfaction, estimated lost sales or lost Estimated Lost Sales
opportunity. Lost Opportunities
$
4 Total these costs. Total Breakdown Event Cost to the Company
5 Enter your Early Intervention Costs. Early Intervention Cost
Cost to have repaired the asset when the first $
6 Divide the Total Cost to your company by the symptoms appeared
Early Intervention Cost.
The cost to have initiated training when the
first symptoms appeared
The resultant ratio will be your True Risk/reward Ratio
for Deferring Maintenance for this event.
True Risk/Reward Ratio for Deferring :1
Maintenance or Training

SPRING 2017 | NSAA JOURNAL | 7