The maintenance budget is a big and tempting target!
Maintenance management is normally a labor intensive and capital intensive process. Significant labor must be spent in doing the actual maintenance work, employee training and retention. Besides the cost of such labor there are significant expenses associated with purchasing and stocking spare parts and maintenance supplies. It is no wonder that E.I. DuPont de Nemours Co. (Delaware) reported that “The largest, single controllable expenditure in a plant is maintenance, and in many plants the maintenance budget exceeds annual net profit.” (1996). Considering the size of maintenance budgets there is frequently a need for maintenance managers to justify increases or keeping the budgets at the same level as last year. The current economic climate makes this task harder.
What are the signs that your maintenance budget may be inadequate?
- A big maintenance backlog: One very significant number will be the size of your maintenance backlog – normally measured in hours or weeks. The maintenance backlog represents maintenance work that has not yet been done – typically preventative maintenance work that keeps getting rescheduled or delayed because you do not have the time or money to complete it.
- Too much rework: Another indicator is rework – how many work orders had problems or required new work orders to be issued to get a job completed correctly. Too much rework indicates either inadequate training of maintenance technicians or poor maintenance practices (use of inferior parts & supplies, preventive maintenance not done, improper work order instructions, etc.).
- Lots of overtime: The third indicator is overtime – if you are seeing too much overtime it means that maintenance technicians have too much to do or are taking much longer than expected on maintenance work (a sign of inadequate training or poor maintenance practices).
How to justify a budget increase
Your CMMS/ maintenance management software can give you reports and statistics on these conditions and help you identify actions you need to take. So if you see signs of any of the above in your maintenance program it may be time to increase the maintenance budget to hire more maintenance personnel, spend more on training or improve spare parts management (find better vendors, keep more items in stock and so on). How can one justify such budget increases to senior management? Ultimately it boils down to the opportunity cost – the cost of lost production and the inability to serve customers satisfactorily. If you can quantify such costs it can go a long way in helping you get the necessary budget approvals. Work with your operations team and other departments to get an idea of impact of maintenance issues on them. Having the numbers and being able to pinpoint the causes and fixes necessary will make it easier to get the funds you need.
The importance of CMMS/ maintenance software data
To get useful results you will need to be able to collect a lot of data for analysis. This is where a good CMMS/ maintenance management software package is very useful. If you are looking for a CMMS/ maintenance software program you can download and try out a fully functional 30-day trial of FastMaint CMMS Maintenance Management.Download CMMS Software
- “How to Cut Your Maintenance Budget (Without Cutting Your Throat)” from MaintenanceWorld.
- “Articles on Maintenance Costing and Budgeting” from Plant Maintenance Resource Center.
- “Budgeting for Quality” from Manufacturing.Net magazine.