While high levels of automation in modern manufacturing systems increase the reliability of production, tool failure and preventive maintenance (PM) events remain a significant source of production variability. It is well known for production systems, such as the M/G/1 queue, that optimal PM policies possess a threshold structure. Much less is known for networks of queues. Here we consider the prototypical tandem queue consisting of two exponential servers in series subject to health deterioration leading to failure and repair. We model the PM decision problem as a Markov decision process (MDP) with a discounted infinite- horizon cost. We conduct numerical studies to assess the structure of optimal policies. Simulation is used to assess the value of the optimal PM policy relative to the use of a PM policy derived by considering each queue in isolation. Our simulation studies demonstrate that the mean cycle time and discounted operating costs are 10% superior.