It has been quite difficult to know accurately when an asset, maintenance should be discontinued or whether to replace it. A premature replacement means that you will be tossing away an item of value. However, a too-late replacement can affect the organization in various negative ways such as more downtime, delays in production, higher costs, greater risks of accidents, more pressure for relocation and rescheduling of resources etc. It can be quite difficult overall. But the decision making is important whether to repair or replace.

To make the correct decision about an asset, you should consider the asset value, cost of replacement and ongoing cost of repairing. All of these cannot be simply monitored manually but needs to be tracked and calculated. A computerized maintenance management software (CMMS) can be useful in decision making whether to repair or replace an asset.

Calculating Cost of Repair

There can be two types of expenses for an Asset Repair:

• Ongoing – The costs can involve the production capacity and quality that is lost. The maintenance expenses over the rest of the life of an asset should also be considered
• One-time – The costs can include labor expenses, environmental abatement and cleanup, lost productivity, regulatory fines, costs of spare parts, expenses for associated materials etc.

It is important to calculate the current value of an asset. You can do this with utmost convenience upon using the applicable Depreciation method. This method informs you of the loss of value of your asset every year. The Depreciation method helps to be aware of the Asset depreciation Valuation journey over a period.

In a few cases, the ongoing expenses over the rest of the functional life of an asset are projected to be high enough. Suggesting a replacement decision to be a better solution than to continue with repair works and incurring more cost and impact on productivity. And due to late replacement the impacts on the Organizations increases. Such as it might cause of

• More Asset downtimes
• Risk of more accidents
• Additional Labor costs
• unnecessary Production delays

A CMMS can help you in this regard. It comes with a visibility and analytics at similar work orders for the asset from the past to find out how much you may have to pay for a one time repair. CMMS can auto-generate ongoing cost reports for every Assets. The autogenerated graphical reports like MTTR, MTBF, KPI, Work Order history of different assets depicts a overall picture to understand the future needs of asset maintenance. CMMS can provide a single data set to be accessed, updated, and stored in one location and everybody can work with the same data.

Calculating Cost of Replacement 

The cost of buying a new asset is not the only cost of replacement. The process of replacement begins with removal of the existing asset. The old asset should be disposed of before the new one can to install. There are expenses involved with choosing the new asset for replacement. This generally involves working with sales departments and conducting online research.

For asset replacement, procurement of new spare parts and associated materials for the new asset will also be necessary. You have to train technicians on the best practices and efficient maintenance workflows. During the installation of the new asset, the expenses associated with lost productivity must also be calculated.

For replacement cost calculation, all these numbers must be added up. You will be able to track and calculate these easily in your CMMS. With CMMS, you can collect data easily and keep it accessible as well as safe. Modern CMMS platforms are cloud-based, and you can store all information in one location and ensure availability of real time data always. There is no need to waste time on duplicate data processing from different versions of the same data in spreadsheets, attachments on emails, paper slips in files etc. CMMS saves time, effort and cost in such cases and also improves efficiency with accessibility to real time based data driven analytics.

Conclusion

When you have a precise idea about when to replace or repair, you can save money. You can get optimum value from your assets over their functional period. With a good CMMS, it can be more convenient for you to gather, store safely and work with the information that requires for taking the right decision. DreamzCMMS can help in such situations to make the right decision during Repair or Replace planning. Get in touch with us today to know how we can help you.