Maintaining Budget During Supply Chain Delays

Supply chain issues are causing prices to soar, and budgets to tighten. Mitigate these problems with preventative maintenance and energy monitoring.

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Gridpoint preventative maintenance

The demand (and price) for HVAC systems in the United States is soaring. Despite a mild winter season, the projected demand for HVAC units in the US is set to increase by more than 5% this year.

While this increased demand has resulted in higher profits for manufacturers, it has been a nightmare for facility managers. HVAC equipment needs to be manufactured and distributed across a large network of manufacturers, distributors, wholesalers, and retailers before reaching its final destination: your site.

supply chainBut at each point along this supply chain, there are issues that arise. The biggest issue is that production cannot keep pace with demand—manufacturers have been unable to produce enough units to keep up with orders, leading to backlogs and delays. In fact, air conditioning unit manufacturers say they are 30% behind on orders. These companies are operating at full capacity and even then, they cannot meet their deadlines thanks to delays caused by lead times on raw materials or other parts of the supply chain. The problem has created a domino effect across the entire industry.

Below are some recent statistics on how supply chain issues are affecting facilities:

  • Supply chain problems have bumped HVAC pricing by more than 80% in the last six months.
  • Prices on asset components and facility management parts are up 12 – 15% on average.
  • Lead times on many commodities have been extended by 30 – 50%.
  • Decentralized maintenance approaches have resulted in 20 – 30% of the aggregate facility maintenance budget.
  • Not only are freight costs up, but everything is backed up and it is taking twice as long to receive a container of goods as it did prior to the pandemic.
  • Supply chain delays are extending lead times by as much as 50%.

Supply chainWhat can Facility Managers do to Mitigate these Issues

Supply chain issues and raising costs noted above can make controlling facility budgets feel impossible. Costs continue to rise above budgeted prices, and outages seem to loom with order and shipping delays. However, with two easy tools facility managers can take control of these problems and easily mitigate budget strain and outages.

Utilize Predictive Maintenance

There are three types of maintenance that facility managers can utilize when addressing problems with HVAC units: preventative, reactive, and predictive. Preventative maintenance is a scheduled maintenance that, just like its name, prevents critical issues. Reactive maintenance occurs when equipment has already broken down or malfunctioned to restore equipment to its normal functioning status. Predictive maintenance is a technique that uses condition-monitoring tools and techniques to monitor the performance of a structure or a piece of equipment during operation.

Reactive maintenance can be extremely costly and put the comfort of both employees and customers at risk with prolonged outages, or worse, a loss in revenue due to having to stop operations. Waiting until equipment breaks to perform maintenance puts you at the mercy of manufacturers. With the average cost of HVAC repair visits being upwards of $450, parts increasingly being backordered, and new HVAC machine prices rising, you risk extended outages and overextending your budget.

Because predictive maintenance addresses problems before appliances stop working it is highly cost effective, saving roughly 8%-12% over preventive maintenance, and up to 40% over reactive maintenance. Predictive maintenance gives you the time to order parts, address maintenance needs, and ultimately extend the life of existing appliances, eliminating the need to purchase new machines.

Click here to learn more about how GridPoint can make predictive maintenance simple.

Employ A Monitoring System

Energy and asset monitoring systems can prevent truck rolls, or costly repairs, as they identify HVAC issues before they become a major problem allowing you to easily perform predictive maintenance.

An energy and asset monitoring system is your first line of defense against costly HVAC outages. Monitoring systems use AI to collect data about your facility’s HVAC system, understand long-term, trending HVAC system issues, and help prioritize maintenance. This allows you to extend the life of existing equipment and reduce the need for new equipment.

In the last 12 months alone, GridPoint’s HVAC Health tool was able to identify 32,354 malfunctioning units (12,310 Sev 1 and 20,044 Sev 2) and alerted facility managers, before it became a critical issue.

Want results like these? Get started with a free energy analysis on your site! Our energy experts will conduct a free energy analysis and site evaluation, identifying ways to improve your onsite assets and reduce your overall operating costs.

Click here to read more facility management-related articles from GridPoint.