Is your company considering the implementation of an enterprise asset management (EAM) system or computerized maintenance management system (CMMS)? While many maintenance managers recognize the value of having EAM/CMMS software, they may struggle to justify the cost of implementing it. However, demonstrating the ROI of EAM/CMMS systems is crucial if you want to seek budget approval from upper management.
Quantifying the Benefits of Maintenance Management Software
Delaying the implementation of a comprehensive maintenance management system will cost your organization more in the long run. Equipment downtime, emergency repairs, overtime costs, spare part costs, and time spent preparing for audits can all chip away at your organization’s bottom line.
EAM/CMMS solutions transform your maintenance operations from reactive to proactive. They reduce costs by helping you plan and schedule preventative maintenance, increase equipment life and reliability, and boost employee productivity. The benefits of EAM/CMMS systems like iMaint and PMC software include the following:
- Controls costs by preventing emergency repairs, reducing unnecessary spare parts inventory, and improving the use of labor resources
- Ensures regulatory compliance by consistently including safety and precautionary steps in work order procedures
- Assures quality by keeping assets in peak operating condition
- Generates preventative maintenance work orders designed to keep your equipment up and running and extend the life of your operating assets
Studies show that implementing maintenance management software can help organizations save 15-30% of their maintenance budgets. Depending on the size and operating characteristics of your organization, this could translate into tremendous annual savings.
A.T. Kearney, in conjunction with Industry Week magazine, published a customer satisfaction survey that sampled 558 companies who were using a maintenance management software package. These companies reported the following benefits:
- 20.1% reduction in equipment downtime
- 19.4% savings in lower materials costs
- 17.8% reduction in MRO inventory expense
- 28.3% increase in maintenance productivity
- 9-month average payback time for a PC-based system
- 14.5-month average payback time for all systems
The A.T. Kearney report revealed that by using a maintenance management system, a company could significantly reduce the number of breakdowns and lost time resulting from parts being out of stock.
Justifying the Purchase of DPSI’s EAM/CMMS Software
Recently, a maintenance manager was trying to purchase one of our maintenance management systems. He worked in a mid-sized manufacturing plant with approximately 150 employees and about as many machines and spare parts. In order to defend his decision to computerize the maintenance department and its inventory and purchasing areas, he needed to show the company how much money they risked losing by not using our system. This is the chart he presented to the plant’s managers and engineers:
|Part||Part Price||Days for Delivery||Price for Delivery||Downtime
|Downtime Cost / HR||Total Cost of Replacement||Part Cost|
|Backup Variable Volume Pump||$1,000||21||$1,100||508||$100||$53,000||$1,230|
|Backup Machine Nozzle||$4,720||14||$4,900||355||$100||$43,120||$4,876|
|Backup Heat Exchanger (Small)||$1,335||28||$1,485||680||$100||$70,820||$1,845|
|Backup Heat Exchanger (Large)||$3,306||14||$3,456||344||$100||$41,162||$3,816|
|Backup Screw Repair||$2,085||28||$3,085||678||$100||$72,970||$2,645|
The maintenance manager’s presentation was successful. His higher-ups immediately realized that the cost of not having parts in stock was exorbitant and purchased our product within a week.
To learn more about the returns that an EAM/CMMS system can bring to your organization, read our Success Stories or sign up for a free trial.