When purchasing equipment, companies must take into account the cost of maintaining the equipment in addition to its upfront cost. In organizations where equipment is relied on heavily in order to meet production demands, such as manufacturers, maintenance can be quite costly. Examples of maintenance costs may include labor, spare parts, rework, equipment replacement, equipment downtime and others.
Thanks to the advent of computerized maintenance management systems (CMMS) and enterprise asset management (EAM) software, companies can actually manage equipment maintenance in an efficient manner more easily. Maintenance management software generates reminders when maintenance needs to be performed, which helps extend the life of equipment. When implemented correctly, CMMS software can be utilized to analyze maintenance costs and identify areas for improvement.
Assuming all equipment information, processes, fields, etc. are entered into the CMMS software in a consistent manner, companies can begin tracking key performance indicators (KPIs). KPIs are quantifiable measurements that reflect critical business success factors for the company, maintenance department or special project. Put simply, key performance indicators provide a mechanism for measuring success. Common CMMS KPIs include:
- Downtime – the amount of time a piece of equipment is not in operation, either planned or unplanned
- Uptime – the amount of time a piece of equipment is continuously operating in its intended manner
- Mean Time to Repair (MTTR) – the average time it takes to repair a piece of machinery after a failure
- Mean Time Between Failure (MTBF) – the average time that equipment works until it fails and needs to be repaired again
Companies can develop quantifiable goals and work toward them by tracking KPIs within CMMS software. For example, successful food processor John Soules Foods utilizes iMaint, an enterprise CMMS software solution, to calculate their downtime to the cost per minute. “Using our fully-implemented iMaint, we have gone from about 84% uptime to up to 98% uptime,” says Marina Garza, Maintenance Purchasing Assistant. This change translates into significant cost savings for John Soules Foods, which makes management extremely happy.
Unplanned equipment downtime can lead to lost production time, additional labor hours and overtime, increased costs and potentially late deliveries. Unfortunately, a recurring equipment failure is a scenario that many manufacturers are far too familiar with. It’s common for maintenance technicians to perform the same repair over and over again without investigating why the equipment breakdown is occurring. CMMS software provides records such as repairs, modifications, parts used, preventive maintenance tasks and previous failures. Analyzing this data helps maintenance teams identify the probable cause of the breakdown, enabling them to focus on correcting the root issue and thus preventing future breakdowns.
CMMS software also provides companies with a robust view of equipment maintenance costs. Management may typically decide whether or not to replace equipment based on its age, although this isn’t always the most cost-effective way of making a decision. CMMS software not only stores all equipment data (date purchased, manufacturer’s guidelines, etc.), it also stores work history (preventive maintenance, work orders, etc). With some analysis, it may be determined that an older piece of equipment has more uptime and requires fewer repairs than a newer model. As a result, equipment replacement could be postponed and funds could be allocated toward other expenditures, such as capital improvement projects.
CMMS software helps ensure equipment is running optimally and maintained properly—which actually creates a domino effect when it comes to cost savings. Energy costs can be reduced by enabling equipment to run at peak efficiently. Using less electricity, gas and water will certainly reduce a company’s annual utility expenses.
Demonstrating compliance with safety and environmental regulations is necessary to prevent costs associated with violations. It can also be quite expensive to get a facility up and running after again being shut down. CMMS software allows companies to easily comply with safety and environmental regulations through its automated process of scheduling tasks and work orders.
Regular equipment maintenance is essential to keeping it safe, reliable and in working order. Inadequate maintenance can cause accidents, health issues and other dangerous problems. Companies may spend a fortune in legal fees and remediating problems caused by faulty machines, with some never financially recovering. Regular equipment maintenance helps prevent injuries by eliminating workplace hazards and providing a safer and healthier work environment.
CMMS software provides countless benefits and cost-saving opportunities for organizations looking to thrive. For more information on identifying and reducing equipment maintenance costs, or to learn more about our products and services, contact DPSI today.