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Defeating Deferred Maintenance


Establishing a Core Belief
for Managing Maintenance


If you want to create a successful maintenance effort you must have a core belief around which a program can be built that will be sustainable across multiple fiscal periods, long living assets, turnover in technical personnel, and most importantly, changes in leadership.

This core belief must be simple and understandable so that the focus does not shift when operational tempo and budget pressures try to cloud and obscure the established long range company maintenance goal. Everyone from the rookie operator of the asset to the highest levels of operational and financial leadership must understand and believe that the core belief will produce the best result possible. When I am engaged to help a client I like to start with this core belief.

Early Detection and Early Intervention will produce the lowest maintenance cost per unit of production possible.

All other options will create a higher cost.

This is easy to understand; however, the devil is in the details. When making maintenance decisions that require reducing or stopping production, leadership must be a high degree of confidence that any action they take is the right action to produce the highest benefit for the entire company.

They must be able to justify the reduction in production for maintenance reasons to be the right action for the overall good of the company. This is often difficult because of the lack of technical mechanical knowledge available to the executive decision-maker at a critical moment. This transfer of knowledge from maintenance to management must be accomplished in just the sixty seconds. If enough understandable information is passed, the executive will probably grant another five minutes.

It is in these six minutes that leadership, finance, operations and maintenance get the opportunity to make the best decision. I use two primary tools to condense the Early Intervention issue into one minute.

The first is “Computing the True Risk/Reward Ratio for Deferred Maintenance”. When an asset requires attention, the maintenance manager uses this form to condense the information. The Early Intervention cost to act before the asset is operated to failure, including expected downtime, is entered and totaled.

The next part of the form contains all the expected Breakdown Event costs including direct maintenance costs if the asset is operated to failure including downtime and expected indirect costs such as known lost sales, rented temporary equipment, etc.

This partially completed form is then presented to the leadership and asked to provide a value for the intangible costs associated with a breakdown event such as safety, customer relations, unwanted regulatory attention, and legal issues.

The numbers are totaled and the Early Intervention numbers are divided into the Breakdown Event numbers. This produces the True Risk/Reward Ratio for Deferring Maintenance for the case being examined. If the form is filled in except for the leadership’s input, the leadership can add their knowledge and reach a preliminary decision in less than one minute.  The decision will be simple because the risk/reward ratio in dollars is seldom less than 40:1 and the downtime ratio is seldom less than 15:1. This will get the additional five minutes.

Just because the decision is simple does not mean the execution will be easy; however, because everyone involved is in the room at the same time all the options can be examined (Not just direct maintenance costs.) and leadership can use the five minutes very effectively to make the best decision for the overall good of the company. Once the decision is made, everyone knows what is expected of them and a scheduled Early Intervention can happen.

I encourage the Maintenance Department to store these worksheets by operating process as a historical source of information to be quickly applied in future decisions. Once the risk/reward ratio is known by process, everyone from the operator to the executive can quickly recognize the gravity of a pending failure. Once the ratio for failing to act is known, simply multiplying the ratio times the Early Intervention costs will produce the expected Breakdown Event costs to the entire company if operated to failure.

 The second tool I use is a little more difficult to understand but easy to use. The “Inverse-Square Rule for Deferred Maintenance” demonstrates to the executive management that the expenses to the entire company incurred during a Breakdown Event are exponential and once initiated can threaten the very existence of the company. The tool uses the Breakdown Event numbers collected while computing the risk/reward ratio above. Once totaled, take the square root of the total.

This number represents the total energy the company will have to expend to overcome the breakdown event at each exponential level of failure. The lowest number represented in the progression will usually be the cost of the primary failure part. If executive leadership has seen the result of several worksheets and believes the breakdown costs are exponential, they will be willing to do whatever is best for the company to avoid a breakdown event by scheduling an Early Intervention.

I also teach it is necessary to create a “Corporate Memory for Maintenance” to manage maintenance across multiple fiscal periods, turnover in technical personnel, and changes in leadership. If the executive leadership demands this tool, then future decisions can be made with confidence even when being pressed by the most demanding production decisions.

Executive leadership must have good information to make the best decision. These tools demonstrate that allowing an asset to operate to failure will incur an exponential and escalating cost to the company. Knowing this they will endorse and support a maintenance program based on Early Detection and Early Intervention because it will become clear that all other options will produce a higher cost.

David Geaslin, Principal
Houston Mobile: (832) 524-8214

The Geaslin Group
David Geaslin, Principal
 Houston Mobile: (832) 524-8214
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