Let’s face it, creating a budget isn’t anyone’s favorite thing to do. But, if you want to run your business in a cost-effective, efficient manner, you can’t avoid it. To make the task a little easier, here are some steps to follow when creating your maintenance management operations budget:
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Step #1: Look at Last Year’s Spending
Check past records to see how much you spent on maintenance and other related costs. If you have a CMMS, this becomes much easier. The software usually can give you a variety of reports that shed light on your spending history. The types of reports you might want to pull from your CMMS include maintenance history reports and asset or equipment depreciation reports. Some CMMS systems even include forecasting tools that allow you to plug in present and past data, and then predict what you’ll spend over the next one, five or even 10 years. These forecasts are helpful to use as a frame of reference, while creating your budget. They can give you an idea of whether the numbers you have in mind are on track, way too high or much too low.
Step #2: Evaluate Your Procedures
Take stock of how you are doing things. Ask yourself these questions:
- Are there things you could do differently?
- Are there steps you can remove from your processes?
- Are you caring for your equipment properly?
It’s never smart to do something a certain way just because that’s how you’ve always done it. Being willing to challenge the status quo and take a critical look at your procedures is one way to find cost savings.
Think about it: technology today changes at a breakneck pace. If you haven’t updated your systems in several years, it may be time to consider doing so. Modern CMMS systems include a lot of features that can help you automate a variety of tasks. And they can keep track of your fleet, inventory, equipment, preventive maintenance schedule, vendors and more. Using a CMMS to help employees get their work done faster leads to sizable savings in the long run.
Aside from employee costs, equipment maintenance is another huge cost center you’ll want to look at. If you don’t take care of your equipment with regular maintenance, unexpected issues can be very expensive. Not only do you have to pay to fix the equipment, you also lose any potential profit that could have been made during the downtime. And on top of all of that, you still have to pay your employees for those hours, even if they can’t do their regular jobs.
The best way to avoid this is with regular preventive maintenance. This is another area in which a CMMS can be helpful. It keeps track of preventive maintenance schedules and reminds you when the task is due. That way, you won’t forget them and your machines will run smoother and last longer.
Step #3: Look for Ways to Reduce Costs
Aside from the items mentioned above, there are other things you can do to reduce your maintenance costs.
Prepare Yourself Better for Unplanned Maintenance.
Build a buffer into your work schedule. One easy way to do this is to break your weekly or daily schedule down into periods of time for planned maintenance. Then, come up with a list of all the tasks you would like to do. Finally, split that list of tasks into 3 categories like this.
- Category 1 – tasks you must do
- Category 2 – tasks you should do soon
- Category 3 – tasks you would like to do
Then, when equipment failure occurs, you can handle it during the time periods reserved for category three, or even two, depending on how big the issue is. Using this type of schedule helps keep costly maintenance issues from cascading. In addition, it saves your employees from having to spend their entire workday fighting one fire right after another.
Create a Maintenance Calendar
Pick dates over the next week, month, quarter or year where you can schedule necessary maintenance and organize it by equipment type or location. Then you should share this schedule with operations to make sure that it doesn’t conflict with their plans.
Educate Your Staff
Even non-operations staff should know some general signs of equipment failure to look for. They should also know how to report possible failures. Something as simple as an unusual noise can signal a serious problem. So, if anyone happens to come across something they think seems concerning, they need to be able to quickly and easily share that information with the right people. One of the best ways to make this happen is by training your staff on how to submit a maintenance request or work order via your CMMS system. After all, one of the main benefits of using a CMMS system is that it automatically routes these types of important messages.
Step #4: Consider Any Increasing Costs You May Incur Next Year
Think about what you hope to accomplish in the next 365 days. Are you considering any of the following?
- Buying new equipment
- Adding new staff
- Expanding your product line
- Moving to or building a new facility
- Expanding your hours of operation
- Buying or merging with another business
- Undertaking any special new projects
These are large costs that can have a huge effect on your budget. Consider them carefully, when thinking about your spending for next year.
Step #5: Create Your Budget
Based on what you’ve learned about your business by going through the first four steps in this blog, you should have the numbers you need to create your budget. Simply start with last year’s expenses, subtracting the costs you came up with in steps 2 and 3. Then, add the new expenses you discovered in step 4.
Want to make budgeting simpler? Consider investing in a CMMS that can help you record and track all of your expenses. Believe us — it’s much easier than a mountain of spreadsheets.