Cutting maintenance costs

Where maintenance cost can be cut, the order to make the cuts in, and the parts stock that keeps repairs from waiting.

Cutting maintenance cost starts with a measured baseline. Measure each place below before you change it.

Measure downtime, uptime, and labor productivity before any change

Measure downtime, uptime, and labor productivity for the assets you plan to change, and keep the same definitions for the whole comparison. Accurate records are what make a before and after comparison stand.

Cut productivity losses first, then PM, repeat failures, and contracts

Make these four cuts in this order: first the time technicians spend waiting for parts, tools, permits, and equipment, then PM tasks that add little value, then repeat failures, then contract requirements and rates. The Reliability Academy’s 2021 article sets out this sequence, and says to start with PM when cuts are urgent.

Plan and schedule each job so parts, tools, permits, and access are ready when the technician arrives.

Many PM tasks add little value

Review each PM task against the asset’s record and the manufacturer’s recommendation.

Eliminating repeat failures lowers corrective cost

Find the assets that keep failing, and do root-cause work on their repeat failures.

Review contract requirements and rates

Review the requirements of each maintenance contract, and the rates paid under it.

Reconcile spare parts each month to measure cost control

Reconcile inventory on the books against inventory on the shelves each month. It’s a good measure of cost control.

Move breakdown work onto planned work

Count the breakdown work on each asset, and move the assets that keep breaking down onto planned work first. For the cost difference between preventive and reactive maintenance, read Preventive vs reactive maintenance.

Parts stock before it stops a repair

In FixAhead, each part can have a Reorder Point, its minimum stock level. A part is flagged Low Stock when its stock is at or below its Reorder Point. Each part’s unit cost goes into the maintenance cost reports. Each work order records its planned and used parts, and its cost is calculated from inventory prices.

For how many of each part to stock, and how to keep the count true, read How to Stop Running Out of Spare Parts.

1. Set a part’s Reorder Point

Press Add Parts on the Inventory page, then enter the Reorder Point in Add New Part and press Add Part. For a part already listed, choose Edit Item from its Action menu and set the Reorder Point there.

A part’s form: Pieces, $18.50, Reorder Point 4, Reorder Quantity 10, and the Critical Part box. — A part's form, with a Reorder Point of 4.

2. See the parts flagged Low Stock

The Low Stock Items card on the Inventory page counts the parts at or below their Reorder Point, and the Low Stock Alert names them. Each one shows Low Stock in its Status column, or Out of Stock when none is left.

Exit sign LED lamp, Low Stock, over Reception LED downlight’s stock card and Transaction History: issued for WO-1 by Anthony, minus 2; initial stock by Johnathan, plus 8. — The Low Stock Alert names 2 parts, and each part's Status shows beside its stock.

3. Check a part’s price history

On a part’s row, open the Action menu and choose Price History. It lists each purchase’s date, quantity, unit cost, total cost, supplier, and notes, with the total purchased, total value, and average price above the list.

Price History for Reception LED downlight: 8 purchased, $1,600.00 total value, $200.00 average price, over its purchase. — Price History for Reception LED downlight, with one purchase.

Questions to ask a vendor:

Can I set a Reorder Point for each part, and see which parts are at or below it?
Does a work order’s cost come from the parts it used, priced at the inventory unit cost?
Can the cost reports be exported as a file for my accounting system?

Make the first cut, then measure it again

Choose the first cut from the order above, measure its baseline with the definitions you will keep, make the cut, and measure again.