Want to Lower Maintenance Costs? Here’s What You Need to Know!

Maintenance cost is a major concern to any organization that depends on the use of machines, tools, or infrastructure. Whether you are running a manufacturing plant, a fleet of vehicles, or a building’s HVAC systems learning and managing the cost of maintenance can have a profound effect on your business. In this blog post, let me look at what I mean by maintenance cost, why it is important, and how one may control it to enhance organizational effectiveness.

What are Maintenance Costs?

Maintenance costs are the total cost of keeping a piece of equipment or machinery, a structure, or infrastructural facility in optimum condition. This encompasses including costs in maintenance, replacement, spare parts, labor costs, and potential lost production due to equipment breakdowns. Maintenance costs can be classified into two main categories:

• Planned Maintenance Costs: These are costs that are associated with systematic maintenance, for instance, periodic checks, applying oil, and changing a component before it wears out. Thus, planned maintenance is mainly intended to ensure that an equipment does not break down at an undesirable time.
• Unplanned Maintenance Costs: These costs originate from the fact that in many equipment operational scenarios there are emergencies, like equipment breakdowns, which lead to repair works, extra hours of labor, and ultimately, the more serious and sometimes completely unplanned, periods of equipment downtime. There are two major types of maintenance; scheduled maintenance and unscheduled maintenance and the latter is usually costly and time-consuming than the former.

Maintenance Costs

Maintenance costs consist of the following parts:

1. Labor Costs

Labour costs are also one of the major factors to be considered in maintenance costs. It includes the pay and other packages offered to those involved in the maintenance team, contractors or technicians. This is because the type of equipment in question and the skills needed for maintenance will determine the labor cost. Experienced technicians are more likely to receive higher amount of pay but they are likely to undertake less time diagnosing and repairing a fault hence ultimately being cheaper than the inexperienced ones.

As for the costs of raw material and spare parts that are used by the company, it is found that this expense is also significant when compared to other manufacturing companies.
In every maintenance job we are probably carrying out a bearing replacement or changing the oil in a machine, it is going to need materials and spare parts. The foregoing costs may differ depending on the type of equipment that is being maintained as well as the availability of parts of the equipment. Effective management of spare parts inventory in this respect is thus recommended as a way of avoiding unnecessary delays in restoring the affected equipment and at the same time keeping costs in check.

Downtime Costs

Downtime is the time that the equipment is out of service because of either maintenance or repair work. This can prove very costly in the long run, especially to sectors such as the manufacturing industries whereby equipment means production and most importantly revenues. Downtime cost therefore is pegged a combination of the lost revenue, cost of the idle labor and the repair costs.

Preventive Maintenance Costs

PM is defined as systematic activities like inspection, cleaning, oiling and replacement of worn out part at fixed interval of time. PM may require costs during implementation, however they help reduce large costs that may arise from a breakdown in the future. Preventive maintenance costs must also have a line within the total budget of maintenance to avoid a one sided type of maintenance.

Energy and Utility Costs

At other times, costs of maintenance may not necessarily be in terms of repairing the machines, but rather with the amount of energy used by the machinery. When equipment is not well maintained, it is capable of using much energy as compared to when it is well maintained. If machines are well maintained they work effectively and you do not have to spend a lot of money in energy bills.

Importance of Managing Maintenance Costs

Cost of maintenance management is vital in the competency of the overall cost of doing business with a view of ensuring the efficient running of operations. Here are some reasons why managing these costs is crucial:

• Improved Equipment Reliability: A common reason that it solves is that maintenance makes it possible to be certain that the equipment is in good working condition thus minimizing cases of breakdown thus having to repair such equipment.
• Reduced Downtime: In other words, it is essential for companies to perform activities that are within their control by doing periodic maintenance to reduce chances of unscheduled breakdowns hence improve productivity.
• Cost Savings: Although such plans are expensive, they end up saving a lot of money in terms of repairs, energy consumption, and on the life of equipment.
• Increased Safety: Equipment that is well maintained is safer to operate with as compared to the mismanaged or neglected ones. Failure to practice proper maintenance of equipment is leads to hazardous conditions that can endanger the workers.
• Optimized Resource Allocation: Maintenance management budget also assists in resource control so that the company has sufficient workforce, material and spare parts to work on at the right time.

How to Reduce Maintenance Cost?

Thus, it can be stated that it is possible to minimize maintenance costs by planning and employing relevant practice. Here are some tips to help you reduce costs while maintaining operational efficiency:

1. Put in place a Preventive Maintenance Program

This need and the benefits to be gotten make the adoption of preventive maintenance one of the best ways of cutting down on maintenance costs. A plan for maintenance tasks are simple to accomplish and will assist with identifying small problems before they turn into huge crises; therefore, less expensive and time-consuming.

2. Use Data and Analytics

Information obtained from a maintenances’ equipment monitoring systems or CMMS (Computerised Maintenance Management System) can give the information on equipment output, use profile and areas of frequent failure. Studying this data will enable you to cater for the right maintenance schedules and timing so as to avoid expensive breakdowns.

3. Outsource Specialized Tasks

At times, it can actually be cheaper to hire outsiders to work on specific maintenance requirements. Regular contractors may also be preferred due to their sufficient skills and tools needed in performing maintenance compared to the employees of the company in cases of large equipment.

4. Track Maintenance KPIs

The basic metrics that may be used to monitor the effectiveness of the maintenance strategies include Mean Time Between Failures (MTBF), Mean Time to Repair (MTTR) and the cost of maintenance per unit. By performing a regular check on these KPIs, you will be in a position to find a loophole that you can work on and slash costs.

Conclusion

It’s important in the evaluation of the status and performance of an operation that depends on equipment or infrastructure to consider the matter of costs on the maintenance of the equipment or buildings. It is therefore important for businesses to understand the constituents of maintenance costs and be able to embrace certain concepts such as preventive maintenance, data analysis and its inventory management whereby business can be in a position to bring down its expenses it incurs on maintenance and it will also be in a position to make considerable savings on its expenses it incurs on its operations.

Effective management for the expenses that are incurred in maintenance is not only vital in ensuring that your equipment has a long useful life but also important to help your business to operate effectively in the highly dynamic market today. Implementing a good maintenance schedule enables one to get reliable equipment with minimal downtime hence helping in cutting costs in the long-run.

Frequency Asked Question