Maintenance Savings

What Is Maintenance Savings?

Maintenance savings is a key performance indicator (KPI) in facilities management. It represents the cost savings achieved by improving the efficiency and effectiveness of maintenance operations. Tracking this KPI can provide valuable insights into which maintenance practices yield the most significant returns on investment.

Fewer repairs, extended equipment life, less downtime, and fewer unexpected events all help reduce maintenance expenses and improve this KPI. As a result, your facility will save money and improve overall company financial health.

This KPI also helps measure how effectively the organization uses resources to minimize equipment upkeep expenses. If the KPI shows that maintenance and repair costs are unexpectedly high, it may indicate the need for a new maintenance strategy.

How Maintenance Savings Is Calculated

Maintenance savings is calculated by comparing both the direct costs and indirect costs of regular maintenance before and after improvements. Improvements may refer to changes like equipment upgrades, maintenance schedule adjustments, or new maintenance practices.

Each total amount (before and after) includes factors such as labor, parts and materials, service fees, downtime expenses, and costs related to deferred maintenance.

For example, if a facility’s annual maintenance cost was $100,000 pre-improvement and dropped to $80,000 post-improvement, their maintenance savings KPI would be $20,000.

Why Track Maintenance Savings?

There are several benefits to tracking maintenance savings. Here are a few good examples of how you can use this KPI.

Budgeting

Maintenance savings data is good to have while planning a facility’s monthly budget. Managers can analyze their facility’s maintenance cost savings and allocate these funds elsewhere. This KPI can also help provide solid evidence to justify investments in new maintenance improvement projects.

Companies may also use these insights to help prioritize projects. If they discover that a particular initiative historically leads to more savings, they can plan additional, similar projects.

Performance Incentives

Maintenance savings are an effective metric for setting clear performance targets for maintenance teams. By tying incentives to savings, organizations can motivate their teams to find innovative ways to optimize maintenance processes and keep machinery in good working condition.

Operational Decisions

Analyzing maintenance savings data helps managers make informed decisions about repairing, replacing, or upgrading equipment. Using this insight ensures the chosen option aligns with business goals in the long run and optimizes each asset’s life cycle.

Continuous Improvement

Tracking maintenance savings over time is useful for evaluating the impact of specific maintenance initiatives. For instance, a commercial facility could compare their new predictive maintenance strategy to their old reactive maintenance strategy by observing how the shift reduced the frequency and cost of unplanned downtime.

Ways to Reduce Maintenance Costs

There are many strategies that you can implement to reduce costs and increase savings. Here are some examples.

Implement Preventive Maintenance

Scheduling proactive maintenance prevents unexpected equipment breakdowns and larger, more expensive issues. Fewer breakdowns also mean you can go longer without needing an equipment replacement.

Adopt Predictive Maintenance

Leveraging predictive maintenance technology allows you to monitor equipment performance. As a result, technicians will know when to expect potential failures before they result in costly interruptions. Reserving technicians only for when failure is about to occur also helps you optimize staffing resources for other maintenance needs. This targeted approach maximizes resource efficiency while minimizing unexpected disruptions.

Optimize Inventory Management

Keep precise track of your inventory to ensure parts are available when needed without overstocking. This balance reduces carrying costs and ensures staff can perform maintenance tasks quickly upon request.

Train Staff

A well-trained workforce can handle maintenance tasks more efficiently. Therefore, routine maintenance will take less time, which leads to lower labor costs. Additionally, training helps prevent issues caused by improper equipment use. Cross-training staff on various equipment can also reduce the impact of skill shortages if that’s an issue at your facility.

Outsource When Appropriate

In some cases, outsourcing specialized maintenance technicians is more cost-effective than using in-house staff. This approach is especially beneficial for maintenance tasks that require highly specific expertise, like taking care of complex HVAC technology.

Invest in High-Quality Equipment

While higher-quality equipment may have a higher initial cost, the expense generally leads to lower future costs over the asset lifespan. For example, a manufacturing plant may purchase a high-quality, energy-efficient machine that will consume less power and have fewer maintenance needs.