The return on investment (ROI) calculation is a financial indicator. Calculating it for a CMMS (Computerized Maintenance Management System) is not necessarily easy. However, it is useful to be able to calculate it, for example for the maintenance manager in order to show his management the usefulness of such software, to determine the profitability of this solution over the long term, or comparing the costs and the quantitative benefits.
Calculation of ROI
The return on investment (ROI) calculation is done by dividing the gains that the software brings, in relation to the cost of the implementation of it. The ROI formula is: (gains – investment costs) / investment costs.
For example, if the use of CMMS saves $ 10,000, and the annual cost of the software is estimated at $ 500, the ROI calculation is: (10000 – 500) / 500 = 19%
Cost of Acquisition and Operation
The cost of a CMMS varies from one company to another (depending on the number of licenses they need). At the time of calculating cost of purchasing the software, you have to add the cost of training the personnel, the purchase of hardware (new computers, data storage servers, etc.), specific development and other factors. A possible annual fee for the software must also be added.
Earnings through use of software
The use of the computerized maintenance management software can bring several gains for the company, be it at the level of the machines, the stock of spare parts, the use of labour and much more.
The CMMS allows accurate monitoring of preventive maintenance. By performing preventive maintenance on time, you increase the availability of your Asset. Thanks to the alerts generated automatically by the software, depending on the periodicity of the interventions (day / week / month / year), you can act on time to carry out preventive maintenance.
Just like preventive maintenance of a car, for which it is necessary to carry out regular tune up to contribute to its good functioning, to carry out the preventive maintenance on the production machines improves their lifetime, will reduce the corrective maintenance (due to breakdowns), and will make it possible to postpone their replacement .
In the CMMS, everything is memorized: For each asset you can easily find the list of maintenance (preventive and corrective) scheduled, requests for new maintenance task, spare parts, maintenance contracts, etc. You can attach files to each asset, and thus find them easily, for example, technical documentation on a machine.
Similarly, when a failure occurs on a machine, for which you know that an maintenance has already taken place in the past, a search can allow you to quickly find the solution that was put in place, rather than groping for the right solution to the problem.
The use of CMMS saves time, which will improve the productivity of the maintenance team.
Managing a stock of spare parts is an important operation for maintenance. If it is not possible to keep a stock of all the parts, it is also not possible to wait for each maintenance task to receive parts that would be ordered at the last moment.
CMMS allows you to visualize part requirements (for example, for the following week or for the following month). In this way, it is possible to schedule your orders for spare parts, without adversely affecting preventive maintenance.
It is also possible to manage a minimum stock for each part. At each use, the software will warn that the minimum stock level is reached, and that this inventory must be refilled. Finally, a filter also allows you to quickly find parts that are in stock, but have never been used.
The different functionality on the store reduce the dead stock (corresponding to the unused parts), keep only the necessary parts in stock, and reduce the supply cost to a minimum.
Calculating the ROI of a CMMS can be complex. If the cost of the software is known, the estimated earnings must be estimated in order to calculate the return on investment.
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