7 WAYS TO REDUCE EQUIPMENT MAINTENANCE COSTS
When acquiring new equipment, businesses consider two main expenses: the capital outlay of buying the equipment and ongoing equipment maintenance costs. Maintenance is often a significant portion of a business's overall production expenditure, and reducing maintenance costs
However, although businesses are motivated to limit spending, short-term maintenance reduction and ad-hoc cost-cutting are often counterproductive as they may result in unforeseen consequences that increase costs and risks over the long term.
Improperly maintained equipment may deteriorate to the point where it becomes a safety hazard, exposing employees to risk of injury and employers to legal and compliance penalties. Businesses have a predictive maintenance to create a safe working environment for employees, and equipment maintenance plays an important role.
Inadequate maintenance can also decrease productivity as equipment becomes less efficient or fails. To effectively reduce equipment maintenance expenses, businesses must implement programs to intelligently manage maintenance requirements while supporting a safe and productive work environment
How is Equipment Maintenance Cost Calculated?
Equipment maintenance costs are expenses a business incurs to keep its equipment in good working order. All non-disposable equipment generates maintenance costs, although the specifics depend on the type of equipment, the environment it operates in, and its age, among other factors.
There is no generally agreed on formula for calculating maintenance costs, but typical expenses recorded as maintenance costs include:
Tracking maintenance costs often provides valuable data a business can use to plan maintenance and spot opportunities for cost-savings measures. For example, a sudden increase in maintenance cost for a specific machine may indicate that it is not being operated or cared for correctly—perhaps it needs frequent replacement parts because it is not lubricated sufficiently frequently.
Equipment maintenance data points worth tracking include:
How to Reduce Equipment Maintenance Costs
An effective equipment maintenance cost reduction plan should seek to:
Let's consider seven equipment cost reduction strategies that help companies to achieve these goals.
1. Use High-Quality Replacement Parts
The first suggested strategy may seem counterintuitive because it is likely to increase upfront costs. However, compared to cheaper but less robust alternatives, high-quality components are more durable and reliable, with longer operational lifespans.
Sourcing low-quality parts reduces maintenance costs, but a business will pay more over the long term as the components fail, corrode, or even damage machines. Low-quality parts undergo minimal quality control—that's a primary reason they are cheap—resulting in more defects and increased waste.
In contrast, high-quality parts that have passed through a rigorous quality control process can be relied on over the long term. Their lower failure rate results in less frequent replacements, reduced maintenance labor costs, and fewer production line slowdowns and shutdowns.
2. Implement Preventative Maintenance Scheduling
Preventative maintenance, also known as preventive maintenance, is a strategy of regular and routine maintenance to avoid equipment failures that may lead to downtime. It's often counterposed to reactive maintenance—the "fix it when it breaks" approach.
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The goal of preventative maintenance is to ensure that equipment always performs optimally. Maintenance is carried out before it is strictly necessary, ensuring equipment never becomes unusable due to component failure. It is often many times less expensive to carry out regular maintenance than to run equipment past the point of failure so it requires major repairs or replacement parts.
Preventative maintenance schedules can be refined with data analytics. The business collects data about typical failure rates, the equipment's age, and other historical data relevant to equipment maintenance requirements. With sufficient data, preventative maintenance can be scheduled intelligently, avoiding unnecessary expenses while ensuring equipment performs as expected.
Predictive maintenance takes the data-driven approach further, using real-time data derived from sensors to predict maintenance requirements. For example, sensors could monitor machine vibration or lubricant quality, allowing software to schedule maintenance automatically when predefined thresholds are reached.
Early problem identification is key to reducing machine maintenance costs. A minor and easily fixed issue may become a complex and expensive repair if it isn't dealt with promptly. Your employees work with the equipment and understand how it should function. If something isn't right, they will notice it before maintenance and repair teams.
However, employees may need support and training to report possible issues as soon as possible. Make sure they know the reporting process and who they should report to.
4. Lubricate Regularly and Ensure Grease Fittings Are in Working Order
Improper lubrication is among the most common causes of machine failure. Poor lubrication often results in damage to mechanical systems through wear and abrasion. Lubricant is cheap: replacing bearings, bushings, gears, and other costly components is not.
To reduce lubrication-related failure:
5. Use CMMS Software
We've emphasized the importance of data analysis and scheduling to reduce maintenance costs. A computerized maintenance management system
At its core, a CMMS is a database of your equipment, its maintenance requirements, and data from sensors if available. The system uses this information to plan and schedule maintenance work. CMMS software can also automatically generate work orders and assign employees, as well as track parts and materials inventories to ensure components are on hand when needed.
Much of what a CMMS does could be handled manually, but the software automates labor-intensive and error-prone tasks, reducing maintenance administration workloads and ensuring that work teams follow an efficient maintenance schedule.
6. Equipment Maintenance vs. Equipment Replacement
Replacing worn or outdated equipment can reduce maintenance costs, and there may come a point at which it is more economical to replace equipment than to maintain it. One way to determine when that point has been reached is to compare the equipment's expected maintenance costs with replacement costs plus maintenance costs for the replacement.
For example, based on historical data, a piece of equipment may be expected to require $10,000 worth of maintenance over the next five years. In contrast, a replacement may have lower maintenance costs over the same period. It may also be more efficient because of technology improvements or reduced downtime. You should consider whether that maintenance cost difference justifies the capital outlay on new equipment. If it does, continued maintenance of old equipment may not be financially viable.
The inability to source parts and materials often reduces productivity and lengthens downtime. A business may implement every suggestion we've made so far and yet still fail to hit equipment maintenance cost targets because it cannot consistently stock its maintenance inventory with high-quality components. Partnering with a reliable supplier ensures your business has the parts it needs to run an efficient maintenance program.
As a master distributor and manufacturer, Huyett stocks an extensive range of bearing and shaft retention parts, retaining rings, bushings, fasteners, pins and wireforms, and more. Our comprehensive catalog and deep inventory allow our customers to source the parts they need to maintain their equipment and keep production running efficiently. See our full product selection on huyett.com.