HVAC Preventive Maintenance: Planned Replacement Program Strategies
Posted by CLS Admin on February 28, 2014
In our last installment, we explained the value of a planned rooftop unit replacement program. If you agree with our rationale (and we hope you do), then the next step entails building a program for your unit or units. This blog includes some tips to consider as you think through and develop your program.
Facility managers face a variety of challenges on many fronts. We know – at CLS Facility Services, we talk with managers like you every day, and our business is all about managing facilities of every shape and size throughout the United States.
But one of the toughest challenges any facility manager faces is the CFO conversation. It’s that moment when the realities of sound facility management and tight budgets collide. The CFO conversation might seem unpleasant at first. But when it comes to HVAC replacement, this conversation actually provides an opportunity for you to make a compelling case for planned replacement – and save everyone time and money by doing so.
New HVAC units offer numerous and tangible benefits. But capital expenditures can be expensive; the argument for planned replacement, therefore, is often won by proving that the cost of waiting to replace units exceeds the actual cost of replacement.
This means you must sell management on planned replacement as a capital budget expenditure. Doing so is usually much easier with the aid of hard numbers that support your case.
When considering unit replacement, your CFO will want to know several things:
- The projected energy cost of your current unit or units
- The number of units that must be repaired in the coming fiscal year
- The projected repair cost of that unit or units over specified time periods (e.g., one year, two years, five years)
- The estimated cost of a replacement unit or units
We’re not going to say this is easy math. It isn’t. You’ll need to calculate energy usage on different units of different ages, in different locations, under different conditions. That’s why a solution like CLS’ proprietary PM Logic® proves so valuable to clients of ours throughout the U.S.
PM Logic is an industry exclusive solution from CLS that provides comprehensive data-driven analysis and operational recommendations, including:
- PM recommendations for a specific unit type including situational and environmental variables;
- Repair tracking and status updates, including a detailed history of service calls, repairs, open work orders and previous quotes
- Equipment evaluation and replacement data
- Equipment replacements
- Warranty tracking that helps clients realize money-saving opportunities
- Energy management system installation and monitoring
PM Logic provides a wealth of HVAC asset management knowledge that is both site sensitive and RTU specific – just the kind of information you need for your CFO conversation. [For more information on PM Logic, visit CLS Facility Services or call 800-548-3542.]
Planned replacement requires database management, insight…and logic
Once management buys into planned replacement, it’s up to you to build the program. This is the kind of complex task that we use PM Logic for with a variety of clients. If you choose to do so on your own, we recommend that you start by developing an accurate and updated database of your HVAC equipment. Begin with at least the following information: make, model, serial, type, tonnage, age, condition, preventive maintenance (PM) visits, emergency calls, and annual cost to maintain. With this information, you can then analyze that information in ways that help you make critical decisions.
Consider an example. Say you have 1,000 pieces of HVAC equipment, and you want to build a replacement program. You’ll take your first slice and say, ‘Let’s plan to replace anything older than 15 years.’ And you come up with, say, 150 units. When you present this number to your CFO, he’ll say ‘Whoa – 150 units’ times $10,000 per unit…can’t do it.’
So, you then take your next slice by identifying all units that are over 19 years old. Now, you’re down to 40 units. And that might be digestible to the CFO.
But you go even further by drilling down to age. You also identify where specific units are located, and their current condition. Out of the 40 units you’ve selected, there are three or four that seem pretty healthy, all things considered. They’re over 19 years old, but there’s little or no repair history, and they’re generally working well. If you remove those three or four from the list, you’ll reduce the number even further to 15. Now you have a number, and a corresponding case, that a CFO would be hard to argue against.
That’s all for now. Next time, we’ll touch on some trends in HVAC, and specifically rooftop replacement. Until then, we’ll leave you with the wise words of John Mengelson, Director of Facilities Services, Sears, Roebuck and Company, who once said, “The more you know, the better you can plan to anticipate emergencies. With enough history, emergency replacements are predictable.”
To learn more about CLS’s HVAC services or all other CLS services please call us at 800-548-3542 or go to our website, CLSFacilityservices.com