Curious if maintenance is really worth it?
Every business owner with heavy equipment asks themselves this question. Maintenance costs money. Parts cost money. And downtime? Downtime costs you money too… But here’s the kicker.
Not performing maintenance will cost you an arm and a leg.
Businesses who monitor their maintenance ROI end up far outperforming their competitors who don’t. They keep spending way less money and turning way more profit while running equipment much longer than the industry average. All because they pay attention to the numbers.
What you’ll discover:
- Why Maintenance ROI is MORE Important Than Ever
- How To Calculate Equipment Maintenance ROI
- Fuel System Factor That’ll Blow Your Mind
- 4 Proven Ways to Boost Your ROI
Why Maintenance ROI is MORE Important Than Ever
Routine maintenance is much more than just another budget item.
In fact, it’s one of the most important investments your business will make.
Why? Because according to Siemens’ latest report about equipment maintenance, unexpected downtime cost fortune 500 companies about $1.4 trillion every year. Now if you’ve been paying attention you may have caught that that number jumped up from $864 billion just a few years ago.
But wait… it’s actually worse for small-to-medium sized businesses. Because even the slightest breakdown can have disastrous consequences when you don’t have as large of a buffer. Think eating up an entire month’s profits in a single day type of scenario.
The companies that come out on top are the ones that monitor how much they spend on maintenance compared to how much it saves. That’s what ROI tracking does for you.
How To Calculate Equipment Maintenance ROI
Maintenance ROI can be calculated using this simple formula:
ROI = (How much maintenance saves you) – (how much you spend on maintenance) / how much you spend on maintenance x 100
It all starts by calculating how much you spend on maintaining equipment. That includes the cost of parts and labor but also tools and software you use to manage maintenance tasks.
Next, determine how much maintenance is saving you. Some may assume this is simple but it’s where most people trip up. There are quite a few areas where maintenance helps you save money.
- Preventing downtime. Scheduled maintenance = less unexpected breakdowns
- Equipment life. Maintained equipment lasts years longer
- Repair costs. Taking care of small problems before they become BIG problems
- Fuel Economy. A well maintained diesel fuel delivery system including injectors, filters, and even a John Deere diesel engine fuel pump will help your engines run better and burn less fuel.
Once you have an accurate idea of what you’re spending versus what you’re saving, you’ll start to see the ROI clearly. And you’ll be shocked at how much money maintaining your equipment is actually saving you.
The Fuel System Factor That’ll Blow Your Mind
If you’ve made it this far there’s one more thing to help your maintenance ROI that most people forget about…
Maintaining your equipment’s fuel delivery system will drastically improve your ROI.
When the components that deliver diesel fuel to your engine start to go, everything starts to suffer. Fuel economy goes down. Horsepower is lost. And eventually your engine could be at risk.
Here’s a real life example of how it impacts your ROI:
Did you know a dirty fuel filter or worn out fuel injector doesn’t just waste fuel? When your engine has to work harder because of a fuel delivery problem you put extra stress on ALL of the engine. And that stress accumulates until you’re faced with a very expensive breakdown that could have been prevented with maintenance.
Any business owner that operates diesel equipment should be monitoring their fuel system as part of their maintenance program. Ensuring your fuel delivery system is operating at optimum levels is one of the quickest ways to improve your ROI. Simply because it has such a large impact on your fuel expenses and equipment lifetime.
4 Proven Ways to Boost Maintenance ROI
Great, now that you know how to calculate ROI it’s time to learn how you can improve it.
Here are four proven strategies that have helped businesses boost their ROI.
Switch From Reactive Maintenance to Preventive Maintenance
This is hands down the number one thing you can do to improve your ROI.
Reactive maintenance is when you wait for equipment to break before doing anything about it. It’s the expensive way of doing things and according to research done by Verdantis, reactive maintenance costs 3-5 times more than preventative maintenance when you take into account lifetime costs and downtime.
Instead, schedule preventive maintenance on all of your equipment. Be consistent and track it. You’ll be amazed at how little it costs you compared to the huge gains you’ll see.
Monitor The Right Metrics
Typically when thinking of monitoring maintenance most people think of how much money they spend on it. While that is important there are several other metrics that can help paint a better picture of where your money is going.
These are the metrics you should be tracking:
- Mean Time Between Failures (MTBF)
- Mean Time To Repair (MTTR)
- Maintenance Cost Per Unit of Production
- Planned vs. Unplanned Maintenance
When you monitor these numbers over a long period of time you will begin to see patterns. Patterns that will show you where you are wasting money and where you can improve.
Use Quality Replacement Parts
This goes hand in hand with cutting costs. This mistake is made ALL the time. Business owners think they can save money by using cheaper replacement parts. Guess what happens?
They end up costing you more money.
Cheap parts don’t last as long as they’re supposed to. They cause more downtime, and before you know it you’re spending twice as much money as you would have if you used quality parts.
This is crucial for parts that have a direct impact on your fuel system, hydraulic systems, and engine. Using quality replacement parts from reputable dealers will ensure your equipment lasts much longer.
Train Your Team
If you don’t have someone who is capable of performing maintenance tasks then everything else talked about won’t matter. Investing in your team is one of the best things you can do to improve your ROI.
Having well-trained technicians allows you to catch issues before they become big problems. Tasks are completed correctly the first time (meaning less re-work) and they’re completed quicker.
Your employees are one of the best investments you can make when it comes to improving your ROI.
Bringing Your ROI Machine Back Together
Now that you know what goes into calculating ROI on equipment maintenance you should be scrambling to get all of your numbers together.
Measuring your ROI is the difference between your business falling into the “also finished” category or being the industry leader. Companies that understand this…
- Spend less money on equipment overall.
- Experience less downtime which equals more profitable hours.
- Run equipment longer before they have to replace it.
And all of this starts with understanding that maintenance isn’t a cost, it’s an investment. So start paying attention to the numbers and your business will thank you!
