According to statistics, a Computerized Maintenance Management Systems (CMMS) can help an organization save between 10 and 15% annually. But due to the cost of CMMS solutions, many maintenance managers and organizations are reluctant to implement one.
Justifying the cost of a CMMS solution can be easy. In addition to helping maintenance managers track expenses and compare them against budget allocated by different cost centers, a CMMS also allows you to justify next year’s budget for personnel, contractors and/or purchases.
But the benefits of CMMS solution go much further than that – keep reading to find out how a CMMS solution can help increase your ROI.
Track Expenses and Compare against Budget
One of the most notable benefits of Computerized Maintenance Management System is the ability to track expenses and compare them against your budget. A CMMS solution logs parts, labor, and other expenses when maintenance work orders are being completed. In short, it becomes a central database for all maintenance related expenses.
With a Computerized Maintenance Management System, facility managers will never have to troll through receipts and dockets. Running a cost report in your CMMS system will be enough to see where your budget was spent. This will further contribute to assessing next year’s budget for personnel, contractors and/or purchases (see #2).
Justify your Budget for Personnel, Contractors and Purchases
In addition to helping you track your expenses, a CMMS solution helps reduce overtime costs, equipment breakdowns and increase asset and machine life. At the same time, a CMMS improves inventory control, which helps lower the value of the inventory carried on your books and ensures you maintain an optimal service level of at least 95%.
According to Reliabilityweb.com, a CMMS solution can decrease material costs by 19% and inventory control costs by 18 %. By reducing these costs, your next year’s budget for personnel, contractors and/or purchases will be bigger.
Since maintenance is typically performed during outage, maintenance is conducted at the expense of production. With the use of CMMS, facility managers can achieve an average of 5 % reduction in outage time as a result of shortened downtime. The result? A significant improvement in your Overall Operational Efficiency, known as OOE.
When facility managers stop spending so much on maintenance, the money can be directed to other areas, such as personnel, contractors and/or purchases.
Employees vs. Contractors – or Both?
Since a CMMS allows for efficient cost tracking, facility managers can easily determine whether they should use employees or hire outside contractors. Given that every piece of machinery is actively monitored to prevent breakdowns, contractors will no longer be as necessary.
How many labor hours per week are wasted waiting for work orders and revisions, waiting for parts, or rescheduling work orders? By reducing emergency maintenance, facility managers can implement more reliable work order scheduling, and determine whether they should us in-house employees, contractors, or both.
Know your Work Order Costs
Every CMMS solutions includes a work order feature that allows facility managers to define costs and charges associated with each work order. Costs can be broken down by estimated or actual costs. Usually, the different costs that can be defined include labor (employee and/or contractor work cost), materials (stocked or non-stocked parts), and other costs like truck rentals and meals.
A CMMS does more than “fix things” that need fixing. It prevents things from breaking in the first place, and keeps things running in the most cost effective and efficient manner, thereby increasing profits and decreasing losses. Corrective maintenance needs are minimized and maintenance reliability begins to takes its place. This results in better disaster preparedness as well, due to the reduced need for repairs in the long term.
CMMS software is the ideal solution to put you on top of your system, so that you don’t have to worry about what might happen tomorrow.
Ask us about our CMMS software and how we can help your business come out on the positive side.