--- title: Repair or Replace? Strategies to Keep Your Assets Afloat description: Deferred Maintenance will dictate whether you sink or swim. With the right asset strategies, deciding whether to repair or replace will always come easy. image: https://blog.nexusglobal.com/hubfs/Featured%20Images/Articles/Feat%20Image%20-%20Repair%20or%20Replace.jpg --- [Skip to the main content.](https://blog.nexusglobal.com/repair-or-replace#main-content) [![Nexus Logo PNG White](https://blog.nexusglobal.com/hs-fs/hubfs/Nexus%20Logo%20PNG%20White.png?width=1600&height=645&name=Nexus%20Logo%20PNG%20White.png "Nexus Logo PNG White")](https://www.nexusglobal.com) [![Nexus Logo PNG Black](https://blog.nexusglobal.com/hs-fs/hubfs/Nexus%20Logo%20PNG%20Black.png?width=1600&height=645&name=Nexus%20Logo%20PNG%20Black.png "Nexus Logo PNG Black")](https://www.nexusglobal.com) - [Software](https://www.nexusglobal.com/software) - Business Optimizer - Data Optimizer - Strategy Optimizer - Planning Optimizer - Investigation Optimizer - Software Integrations - [Services](https://www.nexusglobal.com/asset-management-as-a-service) - [Solutions](https://www.nexusglobal.com/apm-solutions) - Leadership - Strategy Management - Work Management - Data Management - Investigation Management - [Training](https://www.nexusglobal.com/apm-training) - [Industries](https://www.nexusglobal.com/clients) - [Knowledge Center](https://blog.nexusglobal.com) - [About](https://www.nexusglobal.com/about) - Careers - Schedule a Call Search [Contact Us](https://info.nexusglobal.com/contact-us) Toggle Menu Search Toggle Menu [Contact Us](https://info.nexusglobal.com/contact-us) - [Software](https://www.nexusglobal.com/software) - Business Optimizer - Data Optimizer - Strategy Optimizer - Planning Optimizer - Investigation Optimizer - Software Integrations - [Services](https://www.nexusglobal.com/asset-management-as-a-service) - [Solutions](https://www.nexusglobal.com/apm-solutions) - Leadership - Strategy Management - Work Management - Data Management - Investigation Management - [Training](https://www.nexusglobal.com/apm-training) - [Industries](https://www.nexusglobal.com/clients) - [Knowledge Center](https://blog.nexusglobal.com) - [About](https://www.nexusglobal.com/about) - Careers - Schedule a Call - Example Link - Example Link - Example Link [Facebook](https://blog.nexusglobal.com/repair-or-replace#0) [Instagram](https://blog.nexusglobal.com/repair-or-replace#0) [Linkedin](https://blog.nexusglobal.com/repair-or-replace#0) [X](https://blog.nexusglobal.com/repair-or-replace#0) [YouTube](https://blog.nexusglobal.com/repair-or-replace#0) [Medium](https://blog.nexusglobal.com/repair-or-replace#0) [![Bo](https://blog.nexusglobal.com/hubfs/Imported%20sitepage%20images/Bo.svg) Business Optimizer DISCOVERING HIDDEN CAPACITY](https://www.nexusglobal.com/businessopt) [![Do](https://blog.nexusglobal.com/hubfs/Banner%20Images%20and%20Logos/Do.svg) Data Optimizer VALIDATE ASSET DATA QUALITY](https://www.nexusglobal.com/apmsolutions/data-management/dataoptimizer) [![So-1](https://blog.nexusglobal.com/hubfs/So-1.svg) Strategy Optimizer MORE THAN JUST PM OPTIMIZATION](https://www.nexusglobal.com/strategyopt) [![Po](https://blog.nexusglobal.com/hubfs/Banner%20Images%20and%20Logos/Po.svg) Planning Optimizer SIMPLIFYING & OPTIMIZING MAINTENANCE PLANNING](https://www.nexusglobal.com/apmsolutions/work-management/planning-optimizer) [![Io](https://blog.nexusglobal.com/hubfs/Io.svg) Investigation Optimizer IDENTIFYING FAILURES FOR UNPARALLELED RELIABILITY](https://www.nexusglobal.com/apmsolutions/investigation-management/investigationopt) [![Topic Icons\_Software](https://blog.nexusglobal.com/hubfs/Banner%20Images%20and%20Logos/Topic%20Icons_Software.svg) Software Support FOR EXISTING USERS](https://www.nexusglobal.com/software-support) [![l-domain-01](https://blog.nexusglobal.com/hs-fs/hubfs/Imported_Blog_Media/l-domain-01.png?width=50&height=40&name=l-domain-01.png) Leadership](https://www.nexusglobal.com/apmsolutions/leadership) [![sm-domain-01](https://blog.nexusglobal.com/hs-fs/hubfs/Imported_Blog_Media/sm-domain-01.png?width=50&height=40&name=sm-domain-01.png) Strategy Management](https://www.nexusglobal.com/apmsolutions/strategy-management) [![wm-domain-01](https://blog.nexusglobal.com/hs-fs/hubfs/Imported_Blog_Media/wm-domain-01.png?width=50&height=40&name=wm-domain-01.png) Work Management](https://www.nexusglobal.com/apmsolutions/work-management) [![dm-domain-01](https://blog.nexusglobal.com/hs-fs/hubfs/Imported_Blog_Media/dm-domain-01.png?width=50&height=40&name=dm-domain-01.png) Data Management](https://www.nexusglobal.com/apmsolutions/data-management) [![im-domain-01](https://blog.nexusglobal.com/hs-fs/hubfs/Imported_Blog_Media/im-domain-01.png?width=50&height=40&name=im-domain-01.png) Investigation Management](https://www.nexusglobal.com/apmsolutions/investigation-management) [Careers](https://www.nexusglobal.com/careers) [Schedule a Call](https://info.nexusglobal.com/consultation) 3 min read # Repair or Replace? Strategies to Keep Your Assets Afloat [![Picture of Nexus Global](https://blog.nexusglobal.com/hubfs/nexus-global.jpg) Nexus Global](https://blog.nexusglobal.com/author/nexus-global-a) : Published May 28, 2020 Updated December 16, 2020 [ARTICLE](https://blog.nexusglobal.com/tag/article) [INVESTIGATION MANAGEMENT](https://blog.nexusglobal.com/tag/investigation-management) [STRATEGY MANAGEMENT](https://blog.nexusglobal.com/tag/strategy-management) ![Repair or Replace? Strategies to Keep Your Assets Afloat](https://blog.nexusglobal.com/hubfs/Featured%20Images/Articles/Feat%20Image%20-%20Repair%20or%20Replace.jpg) Two years ago, I made a poor decision that cost me a boat. You see I made the decision to defer maintenance. I had plenty of time to do the maintenance, no worries. I was scheduled to be on the road for the next three weeks so when I got back, I would be sure to winterize the motor for the cold months coming. You can guess what happened next… While I was gone, the weather took a wild swing where the average temperatures were well below normal. There was a stretch of 4 or 5 days where the temperature never got above 25 degrees. When I returned, my top priority was to do the maintenance on the boat. I started the engine up to run it for a few minutes and then continue with the required work. Something just didn’t sound right. I opened the bilge and water was spewing everywhere. Both manifolds were cracked beyond repair. You see water remained in the motor, froze, and cracked the manifolds. Expensive mistake, because I decided to defer the [necessary maintenance](https://www.nexusglobal.com/strategyopt) in order to keep my asset functioning when called upon. In the world of asset management, we ask questions about equipment and maintenance almost daily: Should we repair the equipment? Can we overhaul it? Can we just replace the unit altogether? How about deferring the work until next month? What factors determine the right path? The consequence of failure, the costs, and return on investment (ROI) are some of the key aspects managers need to consider in making the right decision. Whether the issue is a boat or a main motor-drive, the issue of deferred maintenance comes up sooner or later. Wikipedia defines the issue this way, "[Deferred maintenance](https://en.wikipedia.org/wiki/Deferred_maintenance) is the practice of postponing maintenance activities, such as repairs, on both real property (i.e. infrastructure) and personal property (i.e. machinery) in order to save costs, meet budget, or realign available monies. The failure to perform needed repairs could lead to asset deterioration and ultimately asset damage. Generally, a policy of continued deferred maintenance leads to higher costs, asset failure, and in some cases, safety, health and environmental implications." If a manager decides to defer needed repairs or replacement, what is the [impact of continued failures](https://www.nexusglobal.com/apmsolutions/investigation-management/investigationopt)? In some instances, there is the potential for environmental issues or violations. Safety and health also need to be considered. This includes service disruption, employee comfort, and other systems, as well. The criticality to the overall operation of this equipment has a significant impact on the decision-making process. #### What costs should we consider? It is important to realize that maintenance costs are only one part of the total costs we should consider. Best practice maintenance organizations consider the [total cost of ownership (TCO)](https://en.wikipedia.org/wiki/Total_cost_of_ownership) when evaluating options. Focusing exclusively on the direct cost will lead to less-than-optimal results. In the case of motors, for example, direct costs include: - Labor costs of removal and installation - Materials costs for rebuilding, rewinding, or repairing - Freight costs, which are commonly at a premium or expedited rate But mangers also might consider the other costs: - [Efficiency loss](https://www.nexusglobal.com/apmsolutions/work-management) - [Equipment downtime](https://www.nexusglobal.com/apmsolutions/strategy-management) - costs of lost operator wages, utilities, etc. - Customer service or comfort - hard to measure, but you sure do hear about it! ### Repair or Replace? Deciding if it’s time to repair or replace an asset can be difficult, but there are some questions to ask when making the decision. #### How much will the repair cost? When a pump motor fails, managers face a repair-or-replace decision. Many companies use a 50 or 60 percent rule for repairs or replacement. If a repair cost is more than 50-60 percent of the cost of a new motor, it is not repaired. If the horsepower (hp) of the motor is less than a certain threshold, the motor is scrapped and replaced. A company policy usually dictates this ratio. The cost and availability of replacement is also an important consideration when deciding whether to repair or replace. #### How old is the asset? If you’re considering when to replace an asset, use the average life span as a good reference point. The [life span of an asset](https://www.nexusglobal.com/strategyopt) varies based on their usage and maintenance. What is the asset utilization requirements, 24/7 or a couple hours, weeks, or months? When considering an asset repair or replace, also note whether it is still under warranty and how many times you’ve run into trouble with it. I find it amazing how many organizations don’t have a formal warranty tracking policy in place. #### Do we need to replace with a more energy-efficient equipment? Energy costs are another important factor when deciding whether to repair or replace assets. If your equipment has a lower energy-efficiency rating than newer models, you might reduce costs in the long run by switching it out. [Energy.gov](https://www.energy.gov) is a great reference site with dozens of reports and white papers such as [Determine Electric Motor Load & Efficiency](https://www.energy.gov/sites/prod/files/2014/04/f15/10097517.pdf). #### Could better maintenance extend the life of the asset? Most [maintenance strategies](https://www.nexusglobal.com/apmsolutions) were developed when the asset was new, and the original equipment manufacturer (OEM) recommendations were the basis for that strategy. Over the years, the strategy has been adjusted based on failures or performance. For instance, a lot of companies do a great job [adding tasks to preventive maintenance (PMs)](https://www.nexusglobal.com/strategyopt), but a lousy job reviewing if that new task addresses a failure mode. That’s why I am a strong advocate for performing failure mode and effects analysis (FMEAs) or failure mode effects and criticality analysis (FEMCAs) on critical equipment. I recently completed a [workshop conducting a formal FMECA](https://info.nexusglobal.com/training) on a crane. The outcome produced new strategies that addressed historical failures that were never previously addressed. When managers must decide on whether to repair or replace a piece of equipment or entire unit, using [lifecycle costing or a similar tool](https://www.nexusglobal.com/apmsolutions) can assist in making the right business decisions. The decision they make will have profound impact on budgets, future operations, and the people in the facility. Remember, lowest cost is not always the lowest price. Don't wait until your operation is frozen before making a decision. - [Tweet](https://twitter.com/share) [![DMAIC + RCA: A Proven Approach to Reliability](https://blog.nexusglobal.com/hubfs/Featured%20Images/Feat%20Image%20-%20Lean%20Six%20Sigma%20DMAIC-1.jpg)](https://blog.nexusglobal.com/dmaic-rca-a-proven-approach-to-reliability) #### [DMAIC + RCA: A Proven Approach to Reliability](https://blog.nexusglobal.com/dmaic-rca-a-proven-approach-to-reliability) [![Picture of Larry Olson | CMRP, CRL, CAMA](https://blog.nexusglobal.com/hs-fs/hubfs/larry_olson.jpg?width=30&name=larry_olson.jpg) Larry Olson | CMRP, CRL, CAMA](https://blog.nexusglobal.com/author/larry-olson-cmrp-crl-cama) Pair DMAIC with RCA to cut repeat failures, standardize fixes, and sustain reliability—steps, example, metrics, pitfalls, and quick wins. [INVESTIGATION MANAGEMENT](https://blog.nexusglobal.com/tag/investigation-management) [MAINTENANCE](https://blog.nexusglobal.com/tag/maintenance) [STRATEGY MANAGEMENT](https://blog.nexusglobal.com/tag/strategy-management) [ASSET PERFORMANCE MANAGEMENT (APM)](https://blog.nexusglobal.com/tag/asset-performance-management-apm) [PMO](https://blog.nexusglobal.com/tag/pmo) [STRATEGY OPTIMIZER](https://blog.nexusglobal.com/tag/strategy-optimizer) [RELIABILITY](https://blog.nexusglobal.com/tag/reliability) [Read More](https://blog.nexusglobal.com/dmaic-rca-a-proven-approach-to-reliability) [![Steel Finishing: FMEA → Value-Added Strategies](https://blog.nexusglobal.com/hubfs/BLOG_AMNS_SO%20Featured%20Image%20(1408%20%C3%97%20833%20px).png)](https://blog.nexusglobal.com/strategy-optimizer-supports-steel-finishing-facility-with-conducting-fmea-and-improving-reliability-efforts) #### [Steel Finishing: FMEA → Value-Added Strategies](https://blog.nexusglobal.com/strategy-optimizer-supports-steel-finishing-facility-with-conducting-fmea-and-improving-reliability-efforts) [![Picture of Larry Olson | CMRP, CRL, CAMA](https://blog.nexusglobal.com/hs-fs/hubfs/larry_olson.jpg?width=30&name=larry_olson.jpg) Larry Olson | CMRP, CRL, CAMA](https://blog.nexusglobal.com/author/larry-olson-cmrp-crl-cama) How a leading steel finishing facility used FMEA + Strategy Optimizer™ to create value-added maintenance strategies and strengthen reliability. [STRATEGY MANAGEMENT](https://blog.nexusglobal.com/tag/strategy-management) [METALS & MINING](https://blog.nexusglobal.com/tag/metals-mining) [ASSET PERFORMANCE MANAGEMENT (APM)](https://blog.nexusglobal.com/tag/asset-performance-management-apm) [PMO](https://blog.nexusglobal.com/tag/pmo) [RELIABILITY](https://blog.nexusglobal.com/tag/reliability) [Read More](https://blog.nexusglobal.com/strategy-optimizer-supports-steel-finishing-facility-with-conducting-fmea-and-improving-reliability-efforts) [![FMECA for Energy Storage: Value-Added Maintenance](https://blog.nexusglobal.com/hubfs/BLOG_Fluence%20Energy_Featured%20Image%20(1408%20%C3%97%20833%20px).png)](https://blog.nexusglobal.com/fmeca-in-energy-storage-tech-brings-value-added-maintenance-strategies) #### [FMECA for Energy Storage: Value-Added Maintenance](https://blog.nexusglobal.com/fmeca-in-energy-storage-tech-brings-value-added-maintenance-strategies) [![Picture of Doug Robey | CMRP, CRL](https://app.hubspot.com/settings/avatar/956dd448a701e49e9f8bd4c5381c0b29) Doug Robey | CMRP, CRL](https://blog.nexusglobal.com/author/doug-robey-cmrp-crl) How the world’s largest solar-storage maker used FMECA and Strategy Optimizer™ to build value-added maintenance strategies and improve reliability. [STRATEGY MANAGEMENT](https://blog.nexusglobal.com/tag/strategy-management) [POWER GENEARTION](https://blog.nexusglobal.com/tag/power-geneartion) [ENERGY & UTILITIES](https://blog.nexusglobal.com/tag/energy-utilities) [ASSET PERFORMANCE MANAGEMENT (APM)](https://blog.nexusglobal.com/tag/asset-performance-management-apm) [PMO](https://blog.nexusglobal.com/tag/pmo) [RELIABILITY](https://blog.nexusglobal.com/tag/reliability) [Read More](https://blog.nexusglobal.com/fmeca-in-energy-storage-tech-brings-value-added-maintenance-strategies) Nexus Global Business Solutions, Inc. Nexus Global Business Solutions, Inc. 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