FACILITIES MANAGEMENT WHITE PAPERS

The Benefits of Computerized Maintenance Management Systems (CMMS) from an Insurance Perspective

If liability questions arise, CMMS records help an organization defend itself, showing that maintenance was performed.

Thinkage Ltd.

Executive Summary

A computerized maintenance management system (CMMS) is a software package that allows organizations to control, optimize, and verify their maintenance activities (e.g. repairs, routine inspections, preventive maintenance, etc.).

A CMMS can record exactly what work has and hasn't been done. For example, it can record what safety inspections and maintenance jobs should be done, and when they actually were done. It can also help maintenance personnel schedule such safety jobs in advance, so the work isn't forgotten or overlooked. If liability questions arise, CMMS records help an organization defend itself, by showing that maintenance was performed in accordance with any applicable requirements.

A CMMS can also help organizations use their resources more productively. Maintenance departments can substantially increase labor productivity, decrease inventory needs, and reduce equipment downtime by eliminating waste and spotting repair trends. More than anything, a CMMS is a way of keeping accurate and timely accounts of maintenance activities. Such measurements allow effective management decisions instead of blind guesses, and provide the kind of feedback needed to continue making improvements. They also let maintenance personnel become proactive rather than reactive—getting on top of things rather than simply responding to problems as they arise.

What is a CMMS?

A computerized maintenance management system (CMMS) is a software package that keeps records about an organization's maintenance operations. The CMMS notes what jobs have been done, schedules what jobs need to be done in future, and keeps track of all information relevant to maintenance work. A comprehensive CMMS can record costs of labor and materials on a per-job basis, can show what equipment is under warranty, and can tell you when to reorder spare parts.

More than anything else, a CMMS lets you measure what you're doing. It helps you answer questions like these:

• What was the total cost of maintenance (labor and materials) on a particular piece of equipment in the past year?
• What's the replacement cost of that same piece of equipment? When is it more cost-effective to replace the equipment rather than keep repairing it?
• What was the total amount of downtime on that equipment (from which you can calculate downtime costs to the company)?
• What kind of problems did the equipment have? Do the repairs have an overall pattern that suggests maintenance procedures should change? Is it likely that more frequent inspections or preventive maintenance will stop trouble before it appens? Can you prove that this would be worth the cost?

The fundamental principle underlying CMMS is this:

You can't manage what you can't measure.

You can't make sensible management decisions until you have the facts. A CMMS gathers all the facts in one place, and provides maintenance personnel with overviews, summaries, or detailed reports as needed. Armed with such facts, maintenance personnel usually find it easier to show upper management the value of maintenance work.

From an insurance perspective, a CMMS makes sure that necessary work doesn't slip through the cracks. If, for example, a piece of machinery requires monthly maintenance, the CMMS can schedule that maintenance ahead of time to make sure it doesn't get missed. In liability cases, CMMS records can be used to prove that an organization has been appropriately diligent in maintenance efforts; the records can show that all required maintenance has been done in accordance with manufacturer's specifications.

Note: A CMMS is only as good as the organization's commitment to using it. If, for example, maintenance personnel don't record the exact labor and material costs of each job, this information won't be available later on. One study found that most organizations only use 15-30% of the features in their CMMS. While keeping some information is (probably) better than keeping no information at all, it leaves management with less solid data on which to base decisions.

What is in a CMMS?

CMMS packages differ in many respects, but most provide the following features:

Work request management

• Keeping track of problem reports received from sources outside the maintenance department (e.g. complaints from other departments in the organization).

Work order management

• Keeping track of work orders prepared by maintenance personnel. This includes the creation of work orders, plus recording the results of each job after it's finished. The creation of work orders may include:

  • Description of the job
  • Specifying date and time the job should be done
  • Estimating length of job
  • Assigning personnel and estimating labor costs
  • Reserving materials expected to be needed for the work
  • Specifying accounting information for the job (e.g. account to which costs should be charged)
  • Recording useful information for workers (e.g. access information, contact people, applicable service contracts)

  After the job is finished, the CMMS may record information like the following:

  • What the job actually entailed
  • Actual start and end times for the job
  • Actual labor costs and material usage
  • Length of down-time for any equipment involved
  • Actual cause of the problem
  • Any other details that might be relevant now or in future

  Work order management also includes automatic generation of work orders for preventive maintenance.

Equipment management

• Keeping track of the organization's machinery (e.g. assembly lines, manufacturing equipment, vehicles, etc.). This includes keeping records of equipment specifications, meter readings, warranties, service contracts, past repairs, necessary preventive maintenance, spare parts needed to maintain the equipment, cost and replacement cost projections, mean-time between failures, etc.

  In essence, a good CMMS can tell maintenance personnel anything they want to know about a piece of equipment before they go off to perform maintenance on that equipment. It can also provide data that may lead to the detection of significant trends; for example, if a number of machines in the same building suffer electrical problems, maybe there's some overall problem with the building's electrical system.

  Equipment records can also simplify making cost-benefit analyses of maintenance activities. For example, one company discovered that the amount they were spending on preventive maintenance for a set of fans was vastly greater than the cost of just replacing the fans whenever they broke.

Facility management

• Keeping track of maintenance on an organization's premises. Facilities management requires the same kind of information tracking as equipment management.

Inventory control

• Keeping track of the materials and spare parts used to perform maintenance activities. This includes ordering stock when current supplies get low, reserving items for use in upcoming jobs, and maintaining records of storage locations so personnel can find the supplies they need. Good inventory records let you meet expected requirements without buying more than you need. They also let you minimize the amount of storage space you need by eliminating unnecessary surpluses.

Purchasing and receiving

• Keeping track of the costs of everything involved with maintenance: materials, service contracts, work done by outside contractors, and so on. Related facilities let you determine the cost of the materials you keep on hand, track price quotes from different vendors, monitor inventory "shrinkage", etc.

Personnel management

• Keeping track of staff costs and productivity. A CMMS can produce sensible schedules for personnel, and can also provide personnel with time-saving information. For example, the CMMS can record any special instructions associated with equipment or facilities, like "Get the key from Chris Smith" or "Repairs must be done before 8:00 a.m. or after 5:00 p.m."

Effects of a CMMS

Maintenance costs are subject to a greater degree of control than many other costs in an organization. Up to a point, you can choose how much maintenance you do, and you can tune the nature of your maintenance to get better results with less cost. According to one estimate, maintenance can account for as much as 60% of controllable plant operation costs.¹

To control costs, however, you need the right information. You need to know where the money really goes, and whether it's spent effectively. That's where a CMMS comes in. Some of the savings include:

Improved safety

• Equipment gets serviced on time. Problem reports don't get lost. Work orders can include full instructions for preventive maintenance tasks. Maintenance personnel can easily find the information they need to do their jobs. Important notes don't "fall through the cracks"—for example, if someone decides that a particular equipment component needs special attention during inspections, an appropriate note can be added to instructions so that the information is passed on to whoever does the job in future.

Improved liability tracking

• Complete records of all work done on facilities and equipment can be invaluable in liability proceedings. There is no missing paperwork, because everything is stored in computer files.

Increased labor productivity

• Maintenance productivity in Canada and the U.S. averages about 35% (which means that in an 8-hour shift, a worker spends about 2.8 hours in direct handson work). Most organizations with a CMMS have managed to raise this to 70- 80%. Why? They can get more accurate information on equipment and facilities, without having to search through paper files and manuals. They can immediately find out which storerooms have which spare parts. They can plan jobs better; even something as simple as copying a new work order from an old one can save significant amounts of time. Work orders can be more accurate and complete, making sure that the right people arrive at the right place at the right time. Materials can be reserved in advance, so you know you'll have what you need to do the job. Less tangibly, but just as important, employee morale often improves because of better planning, scheduling, and organization. Companies also have less need to pay for overtime, since your existing staff gets more done in their regular hours.

Better inventory control

• Installation and use of a CMMS has been shown to reduce maintenance repair order (MRO) inventories by an average of 5-12%. These savings come from an improved ability to review storeroom inventories and reduce duplication, the elimination of guesswork in reordering and stocking, the identification of obsolete parts, better control of when materials are actually issued from storerooms, and the ability to reserve materials for jobs (thereby letting you know in advance what stock levels will be in future).

Better analysis of history means better planning for the future

• Knowing what went wrong in the past can help you avoid repetitions. If a particular piece of equipment is known to have vulnerabilities ("This model tends to develop electrical problems"), maintenance staff can proactively take steps to monitor and minimize potential problems. Even better, nonmaintenance personnel can be alerted to watch for advance warnings; for example, a machine operator can watch for symptoms of possible malfunctions and call for maintenance attention before there's an actual breakdown.

Thinkage Ltd. offers a demonstrated expertise in the development of software tools. Besides the quality of Thinkage's software design and the excellence of its documentation, the company's greatest strength is its ability to adapt to new computing systems: not just top-popularity platforms like Windows and UNIX, but platforms with non-standard architectures and O/S support. Our flagship product is MainBoss Maintenance Software, a comprehensive software solution for effective maintenance management. For complete information on this product, see www.mainboss.com.

¹ Computer-Managed Maintenance Systems in Process Plants by William W. Cato and R. Keith Mobley, 1999, Gulf Publishing, Houston. Many subsequent statistics are also taken from this book.