How to Reduce Equipment Maintenance Costs

10 min

Companies usually rely on their assets to get the job done, so they spend a significant amount of money on purchases. 

However, equipment maintenance should be an important point in their budget. This can become expensive if not done correctly. 

Your goal should be to reduce these costs without sacrificing work quality. 

This article will help you do that.

It will also guide you in ensuring that the machinery is in good working order, that you are taking care of it properly, and that the staff knows how to service it. 

Additionally, this article will teach you how to measure the success of your preservation strategy and see how you compare to the world average.

Be Aware Of Equipment Costs

Calculating your equipment costs allows you to decide whether or not to keep the tool once you see how much owning it costs you. 

Look into selling or replacing the item if you determine that you’re spending more on the tool than it is worth to you. 

Such losses happen when a device is no longer necessary in your operations or when there are cheaper alternatives on the market that are just as efficient.

Calculations help you decide whether to outsource the item (by renting or leasing) instead of owning it. 

This way, you’ll eliminate unnecessary expenses and save money.

You can add up equipment rates, gather equipment hours, and upload this data into the system to get a clear picture of the costs.

To calculate equipment rates, simply divide the purchase price with the tool’s estimated longevity. 

Add any other obligatory costs, such as annual taxes, insurance, and maintenance expenses to this number to get an accurate rate.

Equipment hours stand for the number of hours the tool is in use, which is information you can obtain from the worker in charge of it. 

A variety of asset management systems will calculate these expenses for you. 

While they may be expensive, they are more reliable than spreadsheets and help you save money in repairs, loans, and underutilization.

Don’t Forget About Depreciation

When calculating costs, pay attention to depreciation, which helps you determine the value of the tools based on their useful life. 

An asset purchased five years ago is of less value than when you bought it on account of its use during those years. This has to be accounted for when you calculate your equipment costs.

It will provide more insight into how much it pays off to own an item instead of outsourcing it.

Use Your Equipment Budget Wisely

While buying cheaper tools might seem like a good idea at first, you will ultimately spend more money on them because of their lower quality.

People are often swayed into a false economy and neglect to take into account later expenses.

What they fail to consider is that a cheap item will often fail or break down due to a lack of quality, meaning that the company will need to invest in repairs. 

Not only do breakdowns make you spend more money, but they also cause delays in the project while your team is waiting for a new piece of equipment or for the old one to get fixed. 

Keep in mind that although price doesn’t necessarily equal quality, if you want to be taken seriously and stay in business, you should invest in high-quality, reliable tools. 

High-quality products will help you save up on preservation costs in the long run—you will spend more money on the purchase, but you will eliminate the need for investing in new parts, constant repairs, or replacements.

When buying new machinery, you should first review the assets you currently own to see how often you use them and how well they do their job. 

Also, keep the benefits of the new purchase in mind. If you only need a piece of equipment for a short-term project, consider renting instead of buying as it will save you money.

Take into account the company’s long-term plan and how the new purchase fits in, and eliminate the risk of breakdowns and save up on servicing by refusing to compromise on quality.

Ensure the Proper Use of Tools

Your machinery operators need good training to use the equipment correctly and decrease the risk of malfunction.

The better training your operators get, the earlier they can spot when a piece of machinery is not functioning the way it should. 

Sometimes, they can notice an issue as soon as it appears, which means that it can get fixed without any downtime or additional repair costs.

How can you ensure that your training is adequate?

The training must include details on how to use the machinery the right way and its primary purpose, using the manufacturer’s manuals

Your training should help operators understand when to solve the issue themselves and when specialized staff needs to take over, as improvising can lead to severe problems with the machinery.

In fact, maintenance specialists should be the ones to help train operators.

They have valuable insight into how to take responsibility for the upkeep of the tools and machinery and the prevention of possible issues. 

The goal is to have operators who know how to properly use, examine, and clean the machinery so that the specialized staff can focus solely on the more complicated aspects of their job.

When you don’t train people adequately, you fail to get the best out of them or the tools, which can be expensive.

Prevent Tool Breakdowns

Eliminate the risk of breakdowns and reduce the costs related to them by prioritizing maintenance.

There are different types of maintenance (preventive, predictive, and reactive), and each company should employ them to take care of essential assets.

To save money and reduce the risk of breakdowns, opt for preventive servicing, the preferred type of maintenance among personnel, focusing on acting instead of reacting.

A preventive approach means the staff inspect the machinery regularly for any possible issues or breakdowns. 

They clean and check equipment, ensuring that it’s safe and functioning correctly before approving it for further use. 

This type of upkeep helps them detect an issue before it causes a breakdown and leads to a halt in operations for your company that can end up costing you ten times more than scheduled downtime.

In addition to a reduction of downtime, this approach helps prevent machinery-related injuries

Tackling less urgent and expensive repairs quickly also ensures higher safety and more reliability in equipment.

All of this will save your organization money in the long run. 

Improve Maintenance by Using Checklists

A good way for the staff to perform preventive servicing properly is to have detailed checklists for each piece of equipment. 

They should tick off the tasks individually as they complete them or mark a job as passed or failed. This increases productivity and facilitates the process.

However, doing this on paper takes up time and makes it difficult to find records if you want to compare the previous and current checklists. 

Instead, consider switching to software that will help you do all this work from your smartphone.

Train Your Service Personnel Well

Properly trained servicing staff saves you time and money, reduces the need for outsourcing people and equipment, and helps your company run smoothly.

Good training empowers teams to perform regular machinery checks as it gives them all the necessary information on how a tool should work, how they should clean it, and how to spot possible problems.

This reduces the need for outsourcing machines or service specialists. 

If you train your team well and they become great at what they do, you will not need outside staff to fix your tool. 

In-house staff will be able to check for issues before they cause a breakdown—enabling you to use your own equipment longer.

To ensure your training is efficient, make it frequent so your team can always remember the key takeaways and use them in practice. 

The failure to do that can cost you the first time they come into contact with something they’ve forgotten how to maintain properly.

Don’t forget to organize refreshment training to help the team remember specific parts of it that may not come into play that frequently. 

Refreshment training prevents them from forgetting less practiced instructions. 

These will come in handy when they experience the problem for the first time and reduce the risk of breakdown.

Finally, don’t forget to measure the results and performance after training to know how useful it was. 

Without this data, you cannot understand how successful your efforts were or what areas of training your team may find challenging. 

Simplify Maintenance Procedures

When there is a problem, your team will look for instructions on how to fix it. Those should be clear and to the point.

The clearer they are to follow, the less room there is for error. 

As a result, the chances of your equipment being damaged are lower, as your employees won’t have to rely on guesswork or improvisation to make things work. 

Simplifying instructions also saves your employees’ time and energy—and your company’s money. 

Employees should be able to find the necessary information quickly, without having to read through paragraphs upon paragraphs of text. 

This will give them more time to get the job done, fix the equipment, and make sure it’s in good working order.

If you’re interested in simplifying your instructions, start by reviewing them carefully.

Then, get rid of redundancies and unnecessary information. 

Try to summarize the data without losing the main takeaways and leave only the instructions necessary for proper operation.

Invest in cloud-based asset management to digitize information and procedures relevant to maintenance by storing them where they are accessible to employees. 

asset report

When employees can find the information quickly, they are more likely to rely on manuals.

Finally, automate equipment tracking and checks using a software solution that helps schedule preservation checks. 

This will save time by making it easy to track and check the state of equipment using a QR code. 

A quick smartphone or tablet scan can let you know who used the equipment, how they rated its condition, and if someone should service it.

Digitalizing procedures makes them more accessible, which helps your team perform better.

Keep Track of Warranties

Warranties serve as the manufacturer’s guarantee that they will replace or repair the equipment in case of an issue during an agreed period. 

You have to follow instruction manuals, keep the assets unmodified, and do regular upkeep if you want to use the warranty guarantee.

The warranty period is usually a couple of years, but some sellers offer warranty extensions if needed.

Warranties help you eliminate unplanned downtime, saving you money. 

Frequently used tools or tools prone to wear and tear will break down eventually, even with the best maintenance. 

When they break down, you will have to find a replacement tool or outsource one to keep business going instead of waiting for someone to fix your equipment.

Warranties guarantee that you will get a replacement item while yours is being repaired, thus practically eliminating downtime.

Always keep in mind the warranty conditions when purchasing machinery. If something is cheap but has a shorter warranty period, you might spend a lot more money on it than you think. 

As soon as the warranty expires, you are in charge of covering repair costs and renting a replacement item, which can double your spending.

Solutions that let you track not only the item’s whereabouts but its condition and warranty information can save you a lot of money. They let you know when you are up to date with warranties and insurance for your tools. 

When you are not, you risk being bogged down in avoidable costs.

Track Your Equipment

Tracking your assets will help you know the location, condition, and availability of an item, allowing you to organize work better and save money in the process.

Keeping track of all your items can be time-consuming and complicated. However, if a necessary tool isn’t available, projects get canceled or delayed, causing monetary losses.

Tracking software lets you know where an item is, who is using it, and when they will return it. 

This feature is available even when a tool is not in use—you can search for it in the cloud without scanning the tag or QR code. 

When you track your machinery, you also eliminate the risk of loss, theft or misplacement

Tracking lets you know who is overseeing each piece of machinery and what its state is, and even track them using GPS.

When employees are personally responsible for the item and know they will have to turn it in and report its condition, they are more likely to take care of it.

Specialized software also lets you check equipment in and out smoothly. 

When someone needs a specific tool, the software will let them know whether the device is currently available or when it will be.

This helps employees plan their work and projects accordingly, saving time and money.

Tips for Tracking Your Equipment

How can you start tracking your equipment?

Purchase software with the features mentioned above—GPS tracking, tool usage, its condition, and date of return

You should mark each item with a QR code or a rugged tag, depending on its size. 

Once the item is tagged, you can upload all relevant data into the cloud and have it readily available for anyone who scans the code or tag. 

With a software solution that simplifies and digitalizes the process, you will be able to track the tagged tools at all times, thus increasing productivity.

Measuring the Success of Your Asset Maintenance

As a business manager, you have to reduce unnecessary spending, boost productivity, and help your team do better work with quality equipment.

How can you know if your efforts are adequate?

Start by researching how often your team checks machinery and how many problems they find and fix without causing significant downtime. 

The more issues get resolved, the more use you get out of the tools without losing business. 

You can also find out how practical your training is by looking into the quality of upkeep.

Try to understand why a tool broke down—it can happen due to wear or tear, a general malfunction, but it can also point to insufficient servicing or improper use. 

In the latter case, you need to organize training for the equipment operators and teach them how to correctly use the tool and recognize when there is an issue.

Breakdowns caused by the product’s poor quality will be a clear sign that you need to invest in more expensive machinery. It will cost less when you consider repair and replacement expenses.

Maintenance-Specific Metrics

Maintenance consultants recommend using three different metrics to recognize how successful you are at maintaining your machinery: 

  • preservation costs/estimated replacement value, 
  • preventive servicing hours/total servicing hours, 
  • emergency repair hours/total upkeep hours.

The first metric lets you know how much you spend on owning a piece of equipment (material, labor, and operating costs) in comparison to how much it would cost to replace it with a tool its age or newer. 

The world average is 2.5-3%.

The second metric explains the relationship between the time spent on preventive maintenance and total upkeep hours. The world-class value here is 60%.

The third one compares the hours of emergency repairs with the total number of hours spent on preservation. The average is 3%, but the lower the score, the more effective you are at servicing your assets.

Conclusion

Now that you know that maintenance is integral for the proper functioning of your company and that there are ways to reduce its cost, you can start implementing solutions to be more efficient. 

The best course of action is to buy quality equipment and take its warranty into account when deciding. 

Once you have the product, organize a training not only for the service team but for the operators, who should understand how to do basic checks. 

Ensure that your procedures are easy to follow by simplifying the instructions, providing the team with checklists, and digitizing product data, including manuals, check-up schedules, and product location. 

Finally, use software that can help you organize, keep track of tools, and notify you when checks are due or when a warranty expires. 

When you want to test how efficient you are at cost-cutting, turn to the three suggested metrics to calculate your percentages and understand what has to improve. 

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