[Themaintainers] Re proper accounting and budgeting for maintenance costs

[Melinda Hodkiewicz]

I should have clarified that Anthony's books are more for industrial than infrastructure maintenance
Melinda

Professor Melinda Hodkiewicz 
BA Hons (Oxon), PhD, CEng, FTSE
BHP Fellow for Engineering for Remote Operations
Faculty of Engineering and Mathematical Sciences
University of Western Australia
M050, UWA, Crawley, Perth, WA 6009
Melinda.hodkiewicz at uwa.edu.au

-----Original Message-----
From: Melinda Hodkiewicz 
Sent: Tuesday, 6 April 2021 8:47 AM
To: Stewart Brand <sb at longnow.org>; themaintainers at lists.stevens.edu
Subject: RE: [Themaintainers] Re proper accounting and budgeting for maintenance costs

Another excellent ref for practitioners are the books by Anthony Kelly

[BOOK] Maintenance organization and systems A Kelly - 1997 - books.google.com The profitability of any industry, in any technological sector-power, process, manufacturing, mineral extraction, transport, communication, etc-will be profoundly influenced by the reliability and performance of the plant which it uses. It is therefore vital that all possible ...
  Cited by 124 Related articles All 2 versions 

[BOOK] Maintenance strategy
A Kelly - 1997 - books.google.com
Devising optimal strategy for maintaining industrial plant can be a difficult task of daunting complexity. This book aims to provide the plant engineer with a comprehensive and systematic approach, a framework of guidelines, for tackling this problem, ie for deciding ...
  Cited by 169 Related articles All 2 versions 

[BOOK] Strategic maintenance planning
A Kelly - 2006 - books.google.com
Strategic Maintenance Planning deals with the concepts, principles and techniques of preventive maintenance, and shows how the complexity of maintenance strategic planning can be resolved by a systematic 'Top-Down-Bottom-Up'approach. It explains how to ...
  Cited by 142 Related articles 

[BOOK] Managing maintenance resources
A Kelly - 2006 - books.google.com
Managing Maintenance Resources shows how to reduce the complexity involved in engineering, or re-engineering, a maintenance organization. It recognises that this is a complex problem involving many inter-related decisions-such as whether or not resources ...
  Cited by 37 Related articles 

[BOOK] Maintenance systems and documentation A Kelly - 2006 - books.google.com Managing Systems and Documentation addresses the main systems necessary for the successful operation of a maintenance organization, such as performance control, work control and documentation. It shows how they can be modelled, their function and operating ...
  Cited by 46 Related articles

Melinda

-----Original Message-----
From: themaintainers-bounces at lists.stevens.edu <themaintainers-bounces at lists.stevens.edu> On Behalf Of Stewart Brand
Sent: Tuesday, 6 April 2021 12:57 AM
To: themaintainers at lists.stevens.edu
Subject: [Themaintainers] Re proper accounting and budgeting for maintenance costs


The note below from David Albrecht is dead on.

There must be good articles, papers, and BOOKS on the subject of sensible budgeting and funding for maintenance-ideally of all sorts, as well as infrastructure.

What sources do people here recommend?

		-Stewart Brand

> 
> Message: 1
> Date: Sun, 4 Apr 2021 21:03:06 -0700
> From: David Albrecht <albrecht.dr at gmail.com>
> To: Melinda Hodkiewicz <melinda.hodkiewicz at uwa.edu.au>
> Cc: "themaintainers at lists.stevens.edu"
> 	<themaintainers at lists.stevens.edu>
> Subject: Re: [Themaintainers] Maintenance engineering coursework?
> Message-ID:
> 	<CACFrA1PDgF7GCw_RT=6fLmQxwSy1N714WdYwSBuZXyoNt11u7A at mail.gmail.com>
> Content-Type: text/plain; charset="utf-8"
> 
> Rental property operator and software engineer here.
> 
> I don't think a course like this is complete without some discussion 
> of accounting. At the risk of stating the obvious, accounting is the 
> accumulated body of knowledge on how to quantify economic activity.
> Probably half if not more maintenance problems are ultimately rooted 
> in poor accounting, specifically focusing too much on cashflow and not 
> enough on the balance sheet.
> 
> Simple but obvious example to illustrate the point. A municipality 
> spends
> $1 million on a new road with an estimated lifetime of 20 years. Next 
> year, they collect $500k in tax revenue and spend $475k. Yay, a 
> surplus! Cut taxes! Except the simple math of $1 million/20 years for 
> our road shows you need to be tracking the $50k annual wear and 
> tear...somewhere. Most organizations -- many municipalities and 
> unsophisticated rental property operators -- don't do this well, and 
> are caught short when a major capital item hits end-of-life, causing 
> them to scramble to get a loan and fall farther and farther into debt they have no way to service.
> 
> I think the solution is to emphasize a culture of continuous, 
> incremental capital replacement in an organization. I haven't seen too 
> many organizations (especially in the public sector) with the 
> discipline to accumulate huge piles of cash for lumpy capital 
> spending, without shenanigans taking place that cause the money to get 
> redirected for other short-term uses. I'd love to know if I'm wrong about this.
> 
> On Sat, Apr 3, 2021 at 5:02 PM Melinda Hodkiewicz < 
> melinda.hodkiewicz at uwa.edu.au> wrote:

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