4 Ways CMMS Implementation Increases ROI & Cuts Maintenance Costs
Maximizing ROI and keeping costs can seem like an uphill battle for any business, and an Everest-size climb for a company in an asset-heavy industry. With issues like equipment downtime, low visibility into asset condition and parts inventory, and an inability to prioritize work orders popping up every day, it can be incredibly difficult to move away from reactive maintenance practices and gain the control necessary to maintain a better financial footing.
This can all change with a robust computerized maintenance management system (CMMS). With accurate reports, connected systems and comprehensive work order management, the right CMMS can provide a single source of truth for all the information that your facility and maintenance management team needs to implement effective preventive maintenance strategies and increase ROI.
In fact, the 2020 Benchmarks & Best Practices for Maintenance Management Report indicates that, of facilities that have substantially implemented CMMS, 88% report significant cost savings, ranging from tens of thousands to millions of dollars.
Here are four distinct ways a CMMS can help your business accomplish these tasks and increase ROI.
1. Reduce Equipment Downtime
High equipment downtime is an incredibly common concern for businesses in asset-heavy industries: manufacturers experience an average of 800 hours of unplanned downtime each year. The average cost of each incident is $17,000, though in some industries downtime can cost as much as $50,000 per minute, which translates to $3 million per hour.
And the causes here are varied – sometimes it is human error, sometimes it is equipment failure. The good news is that the vast majority of the time, this unplanned downtime is totally avoidable. A CMMS system can replace disparate systems, Excel sheets and physical paperwork to effectively track:
- Assets and physical equipment (machines, vehicles and other equipment)
- Supplies such as parts, materials and other inventory
- Work orders and workflows
- Related information such as service schedules, equipment budgets and invoicing
This information can help you better understand your inefficiencies, thereby enabling your maintenance team to track, report and reduce your downtime. It also takes the guesswork out of your benchmark data and – hopefully – leads to marked improvements over time.
Want to track the exact ROI you would get from a CMMS? Check out How to Determine Your CMMS ROI.
2. Improve Labor Utilization
Labor costs can easily get out of control: technicians often do not have the information they need to complete a work order, overtime costs can get out of hand, managers get stuck in a cycle of reactive maintenance – the list goes on. A CMMS offers key features to help, including mobile access, API access, QR code and barcode-enabled workforce tracking, device-agnostic user interface, and more. These features allow:
- Managers and operators to build, review, prioritize, assign and track work orders from any device. They can also receive up-to-the-minute updates when a work order is complete.
- Users to schedule preventive maintenance by setting up time, usage or condition-based maintenance triggers.
- Technicians to be immediately alerted when there is a new work order and receive important details like repair histories, checklists, asset manuals and more.
- Technicians to immediately input notes, mark a job as complete and let others know the status of a particular asset.
Ultimately, this sets maintenance managers up for success and allows them to make more informed decisions related to overtime, technician efficiency and labor costs. In the big picture, these features also allow for more effective preventive maintenance planning, reducing the number of expensive emergency repairs, decreasing downtime, and saving you money.
Remember, though, that you have to get your team on board in order to effectively use a CMMS. Our research shows organizations that invest in CMMS training see improvements in labor efficiency. Specifically, 82% of respondents who use a CMMS with proper training reported strong improvements to work scheduling and labor efficiency of personnel.
3. Increase Asset Reliability + Asset Life
Preventive maintenance (PM) is essential for improving the performance and reliability of maintenance operations. According to one report, predictive analytics yields a tenfold return on investment, and it results in a savings of 30% to 40%. What is more, total productive maintenance has been shown to increase plant capacity by over 10% and productivity by 50%. In addition, organizations that configure most assets in their CMMS report strong improvements to equipment reliability.
This is due to the fact that, with PM schedules and dashboards on a CMMS, all preventive maintenance information resides in one place, so maintenance managers have access to unlimited amounts of manufacturer-related specifications and metrics. They can use this information to extract meaningful data to pinpoint preventive maintenance needs and manage KPIs:
- Track equipment usage and performance, including metrics like mileage, gauge readings and operational hours.
- Create asset profiles so you know all the pertinent information about a particular machine at-a-glance, including failure codes, required safety equipment, maintenance history and more.
- Quickly generate custom reports on things like asset downtime or cost of inventory so you can answer important questions about your maintenance operations at any time.
- Connect with other relevant systems in your company so your maintenance data is always available to relevant departments and individuals.
This ultimately allows organizations to automate PMs, keep track of when maintenance is performed and effectively identify problem areas and opportunities within your organization.
Further Reading & Resources:
- Blog post: "Why You Aren’t Realizing the Full Benefits of Your CMMS"
- Webinar: "The Definitive Visual Guide for a Successful CMMS Selection"
- White paper: "Moving Toward Data-Led Asset and Facility Management Solutions"
4. Modernize Your Inventory Management
Your business has to order, use and keep track of countless MRO (maintenance, repair and operating supply) items, and your technicians need to access these parts in order to effectively complete repairs. This can be costly. In many cases, MRO accounts can make up as much as 40% of a business’s annual procurement budget.
With a smart inventory and parts managed strategy, organizations save time and avoid mistakes. Technicians can keep track of equipment in the field without having to run back to the office to get parts. Not only does this trim time spent tracking parts, but it also optimizes inventory control operations. As a result, organizations experience improved speed and accuracy with repairs, as well as lower costs associated with stockout.
A CMMS can help all this happen. Specifically, a CMMS can make your MRO inventory management easier and less costly by helping to:
- Automate purchases so you have the correct parts in the right place at the right time.
- Keep track of every spare part, including important details like purchase date, availability on certain sites, where the part is stored, and more.
- Inform technicians what parts are needed for a particular prepare and where those parts can be found.
- Track big-picture metrics like inventory costs, order histories and usage statistics.
Ready to learn more about cutting maintenance costs with CMMS adoption? Try our CMMS Cost Savings Calculator to measure your exact ROI or schedule a time to talk with us.