Using a computerized maintenance management system (CMMS) can help track many aspects of a facility’s day to day operations such as assets, parts and labor planning, scheduling work and shutdowns, purchasing new materials, etc. One of the many benefits of accruing this data is being able to review past expenditures, monitor current budget allocations, and plan for future budgets.

Maintenance budgeting is a fundamental element driving equipment reliability. When managing costs according to a budget, the variances will become evident as the work is executed. Better data and analytics allow organizations to determine where those issues are arising and why. Maintenance budgets are dependent on knowledge and experience. Real-time access to historical asset and cost information simplifies the ability to make risk-based decisions. Budgets formed through guesswork do not support risk-based decisions or reliability engineering. Good data is required in order to weigh the costs and benefits of each approach and how to prioritize the improvements.

One of the most effective ways to control the maintenance budget is to identify and eliminate recurring reliability and maintenance problems. To accomplish this, the data on maintenance work performed must be collected and analyzed. The identified factors should be ranked according to the severity of impact to the business. Root Cause Analysis can then be applied to eliminate the causes of failures. These factors can be grouped into categories such as lost production, emergency work, repeat failures, defective parts, etc. It is a good idea to track the losses in each of these categories and review them on a regular basis.

Without a process in place to collect and analyze equipment, maintenance work, and cost data, an organization cannot improve upon what it is doing. Evaluating spending against the maintenance budget provides significant insight into where improvement opportunities exist. Special attention should be paid to assets with large variances, both over and under budget. A large negative variance can indicate that an asset has exceeded its useful life. Conversely, a large positive variance can indicate that an asset is performing above expectations and represents an opportunity to reduce spending.

To set up the cost centers and budgets properly, we recommend starting the planning process with a meeting with your CFO (chief financial officer) or authority in the accounting department. Cost Centers should be set up based on requirements and departments to track budgets. This can include departments, divisions, types of assets, customer projects (for a job shop), or different buildings. Also consider separate budgets and cost centers of parts and stockrooms, purchasing, contractors, etc.

These cost centers should be used with assets, work orders, inventory, and purchasing. The budget module will track monthly budgets and expenditures. This data can be used for analytics and insights, such as comparing similar assets, the performance of technicians, departments, and divisions. You can then compare the past years and plan for next year.

This information can also be available in Excel format. The data can be integrated with accounting or ERP software for further analysis and planning.

Maintenance Managers continuously face the need to reduce maintenance costs. Since maintenance is one of the more controllable costs for any business, there is constant pressure to control and reduce maintenance costs in order to reduce business expenses. The success of the Maintenance Manager depends on their ability to control or reduce maintenance costs while maintaining or actually improving the availability and performance of the equipment. It is impossible to meet this challenge without a long-term, focused plan to improve maintenance performance. The long-range maintenance plan should identify the areas where the reliability and maintenance organization needs the most improvement. A key area to focus on is the improved use of a CMMS program.

Learn how Eagle CMMS can assist you to keep track of aspects in your facility’s day to day operations, call us at 262-241-3845 or send us an email or schedule a demo to learn more about our software.