CMMS ROI -- Justifying the Cost of a CMMS Solution
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.
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 tohelping maintenance managers track expenses and compare them against budget allocated by different cost cen¬ters, a CMMS also allows you to justify nextyear’s budget for personnel, contractors and/or purchases.
But the benefits of CMMS solution go much further than that – keepreading 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 againstyour budget. A CMMS solution logs parts, labor, and other expenses whenmaintenance work orders are being completed. In short, it becomes a centraldatabase for all maintenance related expenses.
With a Computerized Maintenance Management System, facility managers will never have to troll through receipts and dockets. Running a costreport in your CMMS system will be enough to see where your budget was spent.This will fur¬ther 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 solutionhelps reduce overtime costs, equipment breakdowns and increase asset andmachine life. At the same time, a CMMS improves inventory control, which helpslower the value of the inventory carried on your books and ensures you maintainan optimal service level of at least 95%.
According to Reliabilityweb.com, a CMMS solution can decreasematerial costs by 19% and inventory control costs by 18 %. By reducing thesecosts, your next year’s budget for personnel, contractors and/or purchaseswill be bigger.
Since maintenance is typically performed during outage, maintenanceis conducted at the expense of production. With the use of CMMS, facilitymanagers can achieve an average of 5 % reduction in outage time as a result ofshortened downtime. The result? A significant improvement in your OverallOperational Efficiency, known as OOE.
When facility managers stop spending so much on maintenance, themoney can be directedto other areas, such as personnel, contractors and/or purchases.
EMPLOYEES VS. CONTRACTORS – OR BOTH?
Since a CMMS allows for efficient cost tracking, facility managerscan easily determine whether they should use employees or hire outsidecontractors. Given that every piece of machinery is actively monitored toprevent breakdowns, contractors will no longer be as necessary.
How many labor hours per week are wasted waiting for work ordersand revisions, waiting for parts, or rescheduling work orders? By reducing emergency maintenance, facility managers can implement more reliable work orders cheduling, 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 allowsfacility managers to define costs and charges associated with each work order.Costs can be broken down by estimated or actual costs. Usually, the differentcosts that can be defined include labor (employee and/ or contractor workcost), materials (stocked or non-stocked parts), and other costs like truckrentals and meals.
A CMMS does more than “fix things” that need fixing. It preventsthings from breaking in the first place, and keeps things running in the mostcost effective and efficient manner, thereby increasing profits and decreasinglosses. Corrective maintenance needs are minimized and maintenance reliability beginsto takes its place. This results in better disaster preparedness as well, dueto the reduced need for repairs in the long term.
CMMS software is the ideal solution to put you on top of yoursystem, so that you don’t have to worry about what might happen tomorrow.