Control Your Maintenance Budget: How To Minimize Material Costs in 2024 

March 7, 2024
5 min

With the maintenance industry experiencing continuing labor force challenges and price hikes due to inflation, facility maintenance managers keep looking for ways to wrangle costs, optimize current resources and streamline their efforts with potentially smaller teams and resources. If equipment maintenance cost estimates and material prices are straining your organization’s maintenance budget, you’re not alone.

Just three years ago, reports showed almost half of companies in the United States spent 21 to 40 percent of their operating budget on cleaning and maintenance equipment or supplies. A large portion of this was in response to new health and safety protocols linked to the COVID-19 pandemic. Still, lingering effects from the pandemic and supply chain are impacting facilities throughout the country.

Lowering the costs of materials is a nuanced and complex task—price shopping with suppliers might help you in the short term, but there are additional ways to meet your annual maintenance budget and maximize your return on investment. Let’s dig into a few.

Be Specific With Staffing and Strategic With Routines

Man-hours are precious, and when staff routines or processes lead to an inefficient use of time, it only hurts your department’s bottom line. Creating tasks and specific goals surrounding those tasks helps develop optimized work routines and processes for each staff member.

Ideally, you’ll want a comprehensive reporting tool that makes it easier to review how your staff goes about their respective days. Are there repetitive tasks, or tasks that can be combined? Where are there inefficiencies or tasks that don’t lead to achieving a set goal? Eliminating redundant or duplicate tasks will help you extend your labor hours and resources. Cutting out work that isn’t specifically tied to preventing a specific fault or failure streamlines your processes and makes more efficient use of the limited time your staff has. Developing a preventative maintenance plan helps with this (we’ll get to that shortly).

Another way to be specific with your staffing is to optimize your work order process. When you use a digital work order management tool, you can assign requests to team members using an organized system that shows you what’s on each person’s plate and who has the capacity for new projects. This cuts down on response times and saves on the cost of other technicians taking their time to get to a problem.

Improve Budgeting, Track Maintenance Expenses and Watch ROI

You can’t optimize aspects of your department if you are unaware of the details. The best decisions are data-driven, and you can again use your reporting tools to track more than just staff performance. Run reports to analyze historical spending, maintenance cost breakdowns by asset, labor costs, materials and more to uncover new opportunities to manage annual maintenance costs. If you have an asset that is beginning to cost more to repair than to replace, for example, it may make more sense to replace it than perform fixes over and over again.

Parts and inventory tracking will give you a complete picture of each piece of your equipment so you can identify precisely when to upgrade, replace or perform preventive maintenance on your assets. Store all your spare parts information in one easy-to-find location and keep track of your complete inventory, ensuring that your maintenance team always knows precisely what stock they have on hand and how much of it.

This type of information helps in developing budgets and calculating facility annual maintenance costs, generating proposals for purchases and asset acquisition, planning for staffing and showcasing your department's financial return.

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Create Maintenance Schedules and Practice Preventative Maintenance

The most recent numbers from the trade publication Plant Engineering show the top causes of costly unplanned equipment downtime include aging equipment, mechanical failure and lack of time for maintenance. While not all maintenance failures that lead to downtime are predictable, with the right tools, you can practice good preventative maintenance to help avoid or minimize unnecessary downtime.

Unplanned equipment downtime costs facilities an average of $260 per hour, and the average length of downtime is four hours. That’s more than $1,000 each time an asset unexpectedly is out of commission. These numbers should prompt you to move “make a preventative maintenance plan” to the top of tomorrow’s task list.

Using a CMMS to create a list of routine maintenance for each piece of equipment, scheduling that maintenance and assigning it to various team members is imperative to avoiding unnecessary and unplanned reactive maintenance emergencies. You can perform a preventive maintenance cost calculation by having your reporting and PM features in one dynamic platform. You can also integrate with your accounting tools of choice to plan your maintenance budget (ultimately reducing maintenance costs) alongside your preventive maintenance schedules. 

A key part of preventative maintenance is staying current with inspections and any compliance measures based on equipment specs and manufacturer’s recommendations or requirements. As you follow up on those inspections, over time you will learn the frequency with which each asset requires repairs or parts, and you can adjust your plan for that equipment accordingly. It also helps you to find where you may be putting a temporary fix over an issue, rather than finding a cure for the problem (i.e., through replacement or overhaul).

Another way preventative maintenance plans cut costs is through optimizing labor time. Rather than having technicians waiting around for tools or authorizations, or retracing their steps, a preventative maintenance plan helps your staff know the action plan ahead of time, have the proper tools on hand, know their route and gain all of the go-ahead necessary to do their job as quickly and thoroughly as possible.

technicians performing routine maintenance while calulating labor costs, replacement costs and total maintenance costs in their cmms.

Know the ‘Nuts and Bolts’ of Your Inventory, from Assets to Spare Parts

Awareness is only part of your solution to calculating maintenance costs when it comes to the assets and tools at your disposal. Clarity comes from the ability to access the details of each particular asset life cycle, as well as the inventory levels and how they correlate with other metrics. When you run reports on your average repair times, perhaps they are higher than usual because you have a lack of spare parts on hand. This means you need to adjust your supply chain management and ordering.

Does one type of spare part cost more than it used to? Tracking your vendors and associated costs can help identify where you may be spending more. Try negotiating a bulk purchase for a discount, or find a vendor that will work with you to create a frequency package on a similar deal.

On the other end of the spectrum, perhaps you’re not using another part as frequently as you used to, and now you have a surplus. Rather than continuing to reorder this item or over-order, having this asset information at your fingertips allows you to make data-driven decisions to cut down on purchasing that certain part until your inventory decreases, thus lowering maintenance expenses.

This is where a CMMS can be one of your most valuable assets — Access streamlined records on each piece of equipment in your facility from a single list, and track parts and inventory in the same system. Having a singular, detailed view of all expenses can prompt you when you do actually need to reorder or upgrade an item.

Asset management also means paying attention to the purchase and repair history of each piece of machinery and learning to make the most of your equipment. One important consideration is that every asset is used for its intended purpose. Make sure you're not utilizing them past their recommended lifespan or operational limitations, as this can affect their capacity to function effectively, leading to failures and costly repairs. This can help reduce operating costs as well.

Bonus: Use a Building Maintenance Cost Calculator to Understand Your ROI

Accounting software can help you understand how to calculate annual maintenance cost for your facilities, but a maintenance cost formula extends beyond the price of repairing each asset. You can learn how to calculate repair cost for your equipment, but you'll also want to factor other tools into your budget estimations. Use our ROI calculator for a repair and maintenance cost estimation that factors in software, staff and more.

Choose the Right Technology for Your Goals

We already mentioned needing a robust CMMS and different platforms offer different features that can help your each annual maintenance cost. Another way to save with the right technology this year is by implementing energy-efficient tools. Equipment and technology that reduces energy consumption leads to lower utility bills. For example, upgrading to energy-efficient lighting, HVAC systems and even smart building technology can help you cut a building maintenance cost or two. There also may be grants and tax or other government incentives in your area that correlate with making your building more energy efficient and can help cut out-of-pocket annual maintenance costs

The best strategy to harness your maintenance department costs this year is to make one change and build from there. Streamlining your data, schedules and asset information into one easy-to-use interface will give you a solid platform from which to jump into other cost-saving and optimizing measures. Get your complimentary demo of Maintenance Care to see how a CMMS can help you control your maintenance budget in 2024 and beyond.

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