We all know that personal healthcare costs increase as you age. People start to have more health issues, and costs for treatment, prescriptions, and care continue to rise.
Similarly, equipment maintenance costs increase as equipment ages, leading to higher maintenance expenses for your organization. If not properly managed, reactive maintenance and ongoing maintenance cause unnecessary costs and downtime.
Sourcing parts for aging equipment can be a challenge for some because the costs to keep the equipment viable continues to rise. Remi can help you leverage your service dollars and use valuable data collected through each service event, offering solutions that ensure your maintenance department stays financially efficient..
Tracking maintenance costs for aging equipment can pose challenges, as maintenance costs continue to escalate due to scarcity of spare parts and the frequency of major repairs.
This blog explores the life cycle of aging equipment and highlights key influences on service pricing and equipment maintenance.
First, let’s define the terms associated with the useful life of equipment:
- Physical Life: The time until the piece of equipment can no longer function, requiring a total replacement asset.
- Replacement Delays: Waiting to replace equipment with inadequate maintenance at this stage significantly increases costs. This is because routine maintenance and emergency repair efforts increase drastically as the system nears its end of life.
- Profit Life: The period when the equipment’s maintenance cost is lower than the value it generates for your business.
- Economic Life: The time the equipment offers optimal value based on maintenance spending and capital expenditures compared to its total output, making preventative maintenance essential in preserving this value.
New Equipment:
Equipment maintenance costs are likely at their highest point when the equipment is new and just released to the market. At this point, the OEM is the only vendor that can service the equipment and can dictate the cost of service.
Newer Equipment:
Costs tend to drop as equipment matures since maintenance managers have more maintenance options available. Independent Service Organizations (ISOs) start offering competitive and preventative maintenance solutions, which further helps in reducing maintenance costs and improve operational efficiency. However, be careful of long-term contracts with OEMs, as these often come with annual price escalations due to equipment age.
An Alternative Solution
A solution like Remi provides a unique alternative by offering multiple qualified service options, saving on maintenance expenditures. This flexibility, combined with essential preventative maintenance programs, is key to extending the productive life of your equipment and avoiding unnecessary expenses.
Routine preventive maintenance, like regular medical checkups, ensures your assets remain operational. Proper maintenance can also prevent equipment downtime costs, increase equipment productivity, improve overall cost savings, lower operating costs, and reduce business expenses–making your operations more cost-effective.
Next week, we will focus on the repair costs of maintaining mature equipment and discuss the advantages of extending its useful life.
-This blog was also published on AHA Service Guiding Healthcare Solutions.