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Managing Maintenance: More Than Just Savings

After some initial missteps, Wake Forest University Health Sciences finds the ideal solution to managing its equipment.
University Business, Sep 2006

In retrospect, it is clear that Wake Forest University Health Sciences (WFUHS) has been on a quest for more than six years. The goal? To find a maintenance management program for its research, business, and diagnostic equipment that consistently delivers savings, high-quality service, and operational efficiency. What WFUHS discovered during those six years is that there is a profound difference between programs that save money and those that truly manage maintenance. WFUHS had saved money with different programs. However, it wasn't until 2002 that we found a program that truly managed maintenance for our unique environment.

In 2002, WFUHS partnered with a company that manages maintenance on a time-and-material basis, provides essential management resources such as an on-site maintenance manager, and delivers guaranteed savings. Since implementation of this program, WFUHS has saved 15 percent on its maintenance expenses (versus estimated service contract costs).

The most significant difference between this and previous maintenance programs, however, was the scope and sophistication of management services. Proven professional management expertise has turned out to be the critical hallmark of WFUHS' successful maintenance management program. Without it, staff and service vendor support quickly withers, rendering the entire program ineffectual. WFUHS discovered this as they went through two different programs before implementing its current program. For WFUHS, three times has indeed proven to be the charm.

WFUHS is a nonprofit subsidiary of Wake Forest University, Winston-Salem, N.C. It was formed to oversee both the Wake Forest University School of Medicine, with a student and research population of 1,500, and numerous other research operations, some of which are spun into technology companies such as Amplistar and Pilot Therapeutics. The School of Medicine is a research institution that is home to 18 research centers, ranging from human genomics to investigative neuroscience to positron emission tomography. Many of these research centers perform both investigative research and patient care services.

WFUHS receives more than $100 million in grants annually. Overall, WFUHS has more than 700 faculty members as well as an additional 4,000 other employees. The equipment included in WFUHS' maintenance management program lies primarily in the School of Medicine. It is a mix of research-specific and therapeutic equipment.

Medical research institutions such as WFUHS operate within a unique environment. Part research facility, part patient care provider, and part educator, WFUHS' departments generally operate independently, making their own decisions regarding how to manage their departments, including how to handle maintenance. In addition, the research centers receive federal grants to support their research. These grants help pay for equipment maintenance.

Prior to 1998, a combination of service contracts and time-and-material-based service was used to manage equipment maintenance. Each department and research center made its own decision on how best to manage its equipment. The drawbacks of this method were obvious: disparate maintenance management efforts, poorly or little documented maintenance histories, high costs, and time-consuming staff efforts. In 1998, WFUHS decided to purchase and implement a system-wide equipment maintenance management program. Their goal was to reduce costs and manage as much of their maintenance needs under one umbrella as possible. In this, they succeeded.

Unfortunately, the two companies with which they partnered lacked sufficient financial and organizational expertise, resulting in their eventual bankruptcy and jeopardizing the maintenance of WFUHS' equipment.

Vendors, unhappy with the delay or lack of payment from these companies, refused to work for WFUHS. Their staff was also frustrated. Although they supported WFUHS' goal of saving money, they were quickly tiring of the management and vendor upheavals. At the administrative end, they were dissatisfied with the quality and scope of management services being offered by the first two companies. For example, detailed information on maintenance history was spotty, at best, and difficult to obtain. There was also limited assistance with other important equipment management issues, such as equipment purchasing, preventive maintenance, and inventory management. In 2002, WFUHS began its search again for an effective maintenance management program.

In July 2002, WFHUS selected the Lifecycle Program from Thermo Asset Management Services, a Brookfield, Wis.-based business unit of Thermo Electron Corporation (, Waltham, Mass. WFUHS' primary objective was identifying a program that not only delivered guaranteed savings, but did so within the framework of an effective, uniform, and sophisticated management program. Selecting a new maintenance partner was the first important process. Convincing their staff and service vendors that this was the right choice and deserving of their support was next, and the first part of the battle the administration faced to have the program accepted by the end users. Without their support, there would not have been a new program.

As an organization, WFUHS does not mandate the use of a specific maintenance program. They do, however, strongly encourage system-wide participation. The goal of WFUHS is to reduce costs throughout Health Sciences, not just in one or two departments or centers. This is only possible when everyone participates. Obtaining staff support required extensive legwork from both the WFUHS purchasing department and from our new management partner. The new company met with every department, laboratory, and research center. They provided informational and instructional materials on program operations and answered specific questions. Included in these meetings were documented examples of the program in operation: working with vendors, identifying and negotiating savings opportunities, and utilizing management resources such as assistance with equipment purchasing and accessing maintenance histories online. A detailed equipment inventory took place during this same time. The inventory identified all current equipment, established existing maintenance expenses, and determined the equipment most suitable for the program.

Winning back service vendors--both independent service providers and manufacturers offering service on a time-and-material basis--was the second part of the battle to regain confidence. The two companies used by WFUHS from 1998 until early 2002 either paid service providers late or not at all, particularly when one of those companies went bankrupt. A key task for Thermo Asset Management Services was to meet with WFUHS' service providers and establish credibility. The service providers initially balked at cooperating. However, after numerous meetings highlighting their expertise and years in business, the new management company gained the confidence of the service providers.

"One of our biggest challenges was restoring the relationships between the vendors and WFUHS," stated Michael Ketner, Lifecycle Technology Manager at WFUHS. "It was important to the staff at WFUHS that the partnerships were reestablished, so we made that a high priority."

The asset management program includes several important features, all within the context of a uniform, system-wide program. Below is a brief description of the features considered critical to a successful asset management program at WFUHS.

Uniform system for managing diverse equipment. There are a total of 85 departments and 919 items currently participating in the program. Tracking maintenance across a diverse equipment population without a uniform system in place is virtually impossible. WFUHS simply cannot track savings, identify and share successful management techniques, and effectively manage vendors without a uniform system. The new program achieves this with implementation of a uniform system for managing maintenance across all departments and centers--from contacting the vendor to issuing payment. It also provides comprehensive reporting of maintenance activity. This includes detailed reports on corrective and preventive maintenance by equipment item, by site, and by service vendor. The database permits custom reporting as well.

Continued usage of current vendors. It was very important to researchers that they be allowed to continue using their same service vendors. This program permits them to do so, albeit on a time-and-material basis. Research centers that were already obtaining service on time-and-material service now have access to a large and comprehensive engineering database of alternative services and parts providers, giving WFUHS researchers a greater breadth of choice than ever before. They also receive reimbursement for any repair work performed by their own staff.

On-site manager. Given the size of WFUHS, it was critical that they have an on-site manager to assist in the daily operation of the program. This manager has numerous responsibilities: maintaining the equipment inventory, offering on-going education and operational support to WFUHS staff (such as assistance with specific repairs or identifying alternative vendors), explaining program operations to new service vendors, and collecting and reviewing all invoices prior to payment.

Invoice review and reconciliation. The company provides a blanket purchase order for all manufacturers. Vendors submit all service reports and invoices directly to the on-site program manager for review and reconciliation. If a discrepancy is discovered on the invoice--such as double travel charges, failure to issue or apply a credit, etc.--the on-site manager contacts the vendor directly to clear it up. This frees up researchers' time so they can focus on their primary tasks. Within the last year, 683 service reports and invoices were reviewed, with the management partner identifying $9,700 in overcharges.

Real-time engineering service. This service, called the Help Hotline, offers repair assistance on alternate parts and labor sources, historical reference on equipment and service procedures, and preventive maintenance recommendations.

One powerful example of this service in action was a recent savings of $28,513. A component of a spectrometer in the human genomics research center needed to be repaired. A critical wire kept coming loose, preventing the spectrometer from working properly. The manufacturer wanted to replace the entire component for $30,000. Thermo's on-site manager contacted the Help Hotline for engineering assistance. After discussing with the Help Hotline, the manager returned to the manufacturer's service technician and requested that he try to repair the wire rather than replace the entire component. The service technician was initially reluctant, but agreed to try. This repair did work, however, and both the technician and the research center were satisfied with the repair. Instead of paying $30,000, WFUHS only paid approximately $1,500 in labor and travel costs.

Preventive maintenance (PM). This is a key component of any successful asset management program. The on-site manager sends out recommended PM schedules to the various researchers. The researchers schedule the PM themselves or, if desired, can request that vendors contact them directly for PM scheduling.

Online access to maintenance history. The program includes an online service permitting 24-hour access to WFUHS' maintenance records. This includes detailed reports on preventive and corrective maintenance by equipment item, by department, and by service vendor.

Detailed budget allocation and management. Included in the management reports is detailed budget information. WFUHS research center and department staff appreciate having accurate information at their fingertips.

Equipment inventory administration. The on-site manager carefully tracks the need to quote new equipment before the equipment comes off warranty to determine if it should be added to the program and deletes equipment that is no longer in use.

Equipment Acquisition Resource. This value-added service enables WFUHS to successfully negotiate favorable transactions on capital equipment purchases. In the past two years, this service has provided proposal analyses that identified nearly $22,000 in potential savings.

Two years later, WFUHS believes the partnership is a success. There were some initial adjustments required because of our unique position as both a research institution and patient care provider. These have been mostly resolved. Overall, the researchers and medical staff are pleased with the program, particularly with the management information now available at a click of a button, the on-site manager who provides expert assistance for any equipment maintenance-related issue, the streamlined blanket purchase order system, and the reduced administrative burden of managing assets and resulting increased staff productivity.

WFUHS's initial goal was not simply to save money--it already knew how to do that. Rather, its goal was to implement a more holistic approach to the management of its research, business, and diagnostic equipment. In this regard, the new program has succeeded quite well, and of course, it's saving money.

Martha Plyler is the former director of purchasing for Wake Forest University Health Sciences, Winston-Salem, North Carolina. She recently retired from WFUHS after more than 40 years of service.

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