Guide·e-Kwip· 10 min read

Planned maintenance vs reactive — the maths for asset-heavy operations

Planned Preventative Maintenance (PPM) is not universally cheaper than reactive fix-on-fail. Which is cheaper depends on the failure profile of the asset class, the cost of unplanned downtime, and the labour rate of the maintenance team. Here's the maths, applied to the four asset classes we see most often at e-Kwip customers.

The generic model

Annual cost under PPM = (planned intervention cost × frequency) + (residual failure rate × unplanned cost). Annual cost under reactive = (failure rate × unplanned cost). PPM wins when the reduction in failure rate × unplanned cost exceeds the planned intervention cost. That's the whole equation — the interesting variables are the failure rate, the unplanned cost, and the labour rate.

Case 1 — heavy plant (excavators, forklifts)

Failure rate under reactive: 3–4 unplanned incidents per year per unit. Unplanned cost per incident: £1,200–2,500 (parts + labour + hire replacement). PPM cost: £600–900 per year per unit. PPM wins by a wide margin — 3–5x return. Always PPM for heavy plant.

Case 2 — power tools

Failure rate under reactive: 0.4 incidents per year per unit. Unplanned cost per incident: £80–150 (usually replacement, not repair). PPM cost: £40 per year per unit (PAT testing + inspection). PPM wins narrowly, mostly because of the compliance requirement (PAT testing is required regardless of the economics). The economic case is thin; the legal case is decisive.

Case 3 — IT assets (laptops, monitors)

Failure rate under reactive: 0.15 incidents per year per unit. Unplanned cost per incident: £100 (swap, restore from image). PPM cost: £30–50 per year per unit (health checks, cleaning). PPM loses on economics — reactive is cheaper. Run reactive with a next-business-day swap SLA and forget PPM for IT.

Case 4 — HVAC and building plant

Failure rate under reactive: 1–2 incidents per year per unit. Unplanned cost per incident: £2,000+ (business disruption dominates). PPM cost: £400–800 per year per unit. PPM wins decisively when the failure interrupts revenue-generating activity. Always PPM for HVAC serving customer-facing space.

The two questions to ask before every PPM decision

1) What does failure cost, including downtime and adjacent disruption? 2) What is the failure rate under reactive alone? If the product of those two exceeds the PPM cost by 2x or more, do PPM. If not, run reactive with a fast-swap process. Either way, track the actual failure rate — the assumption behind the decision is the thing most likely to be wrong.

Takeaway

PPM is not always cheaper; it's cheaper for expensive-to-fail assets and legally-required-to-check assets. e-Kwip supports both patterns — PPM schedules for heavy plant, reactive workflows for low-cost swaps.

e-Kwip