FEATURE
in the past year, your total cost per hour would come to £50. Once you’ve calculated the cost per hour, it you can determine averages for different types of equipment and spot outliers.
Age – Keeping a record of an asset’s age gives facilities managers a more accurate picture and basis for comparison. An asset that’s eight years old would have a different value to one just two years old even if they experience the same runtime. The older asset is more likely to require more intensive maintenance. And, if it’s something that can resell, the price may be considerably lower than the one assigned to the newer asset.
Work orders costs – Once you’ve determined which assets cost more to repair than others, you can identify underlying issues and take proactive steps to address them. For example, you may discover an asset has a faulty component that has been replaced several times to no avail and then find an alternative or longer-term solution. Alternatively, you may identify a recurring issue that could be resolved with further technician training.
Repair or replace? If you know the TCO of an asset, you can make an informed decision to either repair or replace it. This would also lead to a more efficient PPM programme. It doesn’t make financial sense to repair assets with a short lifespan or ones that are relatively inexpensive to replace.
To understand the failure and repair costs of assets, facilities managers can focus on various metrics. Mean time to failure (MTTF) is a measure used to calculate the average time it takes for non-repairable assets to fail. MTTF is most useful for smaller assets such as light
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bulbs or fan belts. Mean time between failures (MTBF) determines the average time between failures for assets that can be repaired. MTBF is most suitable for larger assets where failure doesn’t result in the entire asset needing to be replaced. Finally, mean time to repair (MTTR) is a metric used to identify the average time it takes engineers to repair an asset in a given period. To calculate MTTR you need to divide the number of unplanned repair hours by the total number of repairs needed.
How can technology help? The right technology allows facilities managers to identify TCO with greater accuracy while developing a more efficient and effective asset management and maintenance strategy. Both enterprise asset management (EAM) systems and computerised maintenance management systems (CMMS) can help facilities managers gain insight into asset lifecycle costs from purchase to decommissioning, including maintenance frequency and costs, condition data, work order schedules and history, inspection information, labour costs, and more.
The emergence of new smart technology-led maintenance techniques, such as condition-based and predictive maintenance, has also added a new dimension to TCO. By integrating IoT sensors and analytics platforms with EAM systems or CMMSs, facilities managers can compare both real-time and historic asset utilisation and condition data against the TCO of an asset to estimate future costs and plan ahead strategically.
The ultimate aim of tracking TCO is to make smarter asset management decisions and improve return on investment.
www.iofficecorp.com TOMORROW’S FM | 27
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