Cost Savings Compliance

A couple of years ago, I had a boss who wasn’t complying with basic labor regulations. He runs a cleaning pickup and delivery business and to say he does things his own way would be an understatement. For awhile there, as one of his drivers, I let myself be taken of, and it taught me a valuable lesson. A few of them actually. I learned that if a boss requires a driver to use a personal vehicle to make deliveries, the federal reiumbursement rate in California is $0.475 cents a mile, not $30 or $40 or whatever a boss thinks is okay. I learned that even if a boss has a piece-rate system of pay, it’s not legal for it to compensate below minimum wage when work is slow. And overall, I learned that given a chance to take advantage, plenty of people will keep doing it as long as they can. In short order, my boss’s malfeasance caught up with him. One of my fellow drivers copped a resentment about not getting minimum wage and got an attorney to write a letter. My boss was forced to pay us back wages, and when the labor board got wind of this and that some of us also weren’t taking lunch breaks, they threatened him with a hefty fine, something like $12 grand all told. I think he had to go to court to bargain it down, and I wound up writing a letter on his behalf.

Why do I bring this all up? Well, in one respect, it’s easy for businesses to go down the path that my boss went, with the economy continuing to lag and revenue still tight. Companies need every trick they can to increase productivity and earnings so as to guard against the temptation to not comply. Computerized Maintenance Management Systems, or CMMS software is one of these tricks, printing out work orders, showing when maintenance work on fleets is due, and helping with scheduling.

What can $500 buy these days? In some areas, half a grand might be good for one month’s rent, a beater car, or college textbooks for a semester. For companies with a fleet of vehicles to maintain, $500 can also buy a year’s subscription to a Computerized Maintenance Management Systems, or CMMS software platform. It’s the kind of software that can save manpower or machines from being wasted. Here’s the best part: Used properly, CMMS can pay for itself and then some.

CMMS is about automating maintenance processes. It removes the need for employees to have to keep track of when work should be done to keep a fleet in working order. To any employee who’s been through it: Say goodbye to the days of poring over spreadsheets or notebooks or one’s memory, trying to remember when an oil change, timing belt repair, or whatever is due to be performed. Say goodbye to all the anxiety that comes with having to keep track of that. CMMS software can tell when maintenance needs to be done, can help with scheduling, and can even print work orders.

There are a few things $500 won’t buy a company. It probably won’t cover even a few days’ pay for an engineer. It won’t buy a new machine if one breaks down due to negligence or some other human error. But $500 might buy an insurance policy in the form of CMMS. And it will allows operations to run more efficiently, creating greater revenue. With $500 spent on CMMS software, a company can easily buy itself $5,000.

So we’ve established that free isn’t really free when it comes to Computerized Maintenance Management System (CMMS) software. It’s like signing up for a gym. Any company that touts free signup fees is probably hiding at least a few other costs in its monthly billing. In the case of Free CMMS software, these fees are often for telephone support, hosting, software updates, and training. At least there’s no gym enrollment fee or high-pressured sales pitch when one tries to quit. Still, the fees for supposedly-free CMMS software can run into the hundreds each month.

So what is the cost from a CMMS vendor that is upfront about these fees? Surprisingly, that cost is seemingly not prohibitive, and given the amount of money properly-used CMMS software can save a company in personnel and operational efficiency costs, it can be a profitable venture.

One study found that a CMMS vendor that touted free software had $409 in monthly fees with an additional $199 needed for each training course. The monthly fees were broken down into $159 for telephone support and $250 for hosting and software updates.

But another CMMS vendor that openly charged a $40 monthly software fee waived the other costs telephone support, hosting, and software updates, with training costs lower as well, $125 for unlimited courses.

All told, it adds up to an annual savings of about $4,000 for companies. That’s a month or two of salary for an employee depending on job title and geographical location. It definitely pays for companies to deal with CMMS vendors that are upfront.

In February 2007, Pacific Gas & Electric company released it’s final report on refrigerated warehouses. Out of the 63-page report it produced on the cooled facilities, almost one-quarter of the text was devoted to the money that energy efficient refrigerated warehouse equipment can save the companies that use them.

Almost across the board in warehouse operations, this equipment can save money, though only if used with proper efficiency. The PG&E report offered a series of recommendations to maximize this efficiency, noting in its overview:

“The standards have never addressed refrigerated warehouses or the processes around them; previous standards have focused on buildings that are heated and/or cooled for the purpose of human comfort. Refrigerated warehouses and the processes around them such as pre-coolers and food processing are extremely energy intensive and are fertile ground for additional energy savings and demand reductions.”

Part of the report’s cost-saving recommendations revolved around setting R-values for things like compressors and evaporators, something that CMMS equipment can allow for with refrigerated warehouse equipment. Through setting these R-values, operational efficiency can be greatly increased for companies and money thus saved.

The only exceptions noted in the report were for small walk-in coolers or freezers and “areas within refrigerated warehouses that are designed solely for the purpose of quick chilling or freezing of products. The scope is for cold or frozen storage as opposed to process cooling.”

Otherwise, energy efficient refrigerated warehouse equipment in general aided by high-end CMMS technology is a valuable way for companies to cut costs.

There are companies on the Web that advertise “free” Computerized Management Maintenance Systems or CMMS software. That is, they don’t charge a monthly subscription rate for their software. Not included in this pitch is the fact that these companies often bill the firms that purchase their programs for anything from telephone support to hosting to software updates to the webinars that they provide. In fact, these charges can often accumulate to as much as $600 per month. When it comes to CMMS software, free generally isn’t really free.

Any company considering implementing a Computerized Maintenance Management Systems program for its operations will probably see a range of long-term benefits from better tracking of its assets to automatically scheduled maintenance on its equipment to significantly improved production overall. All of these things and more that CMMS provides lead to greater revenue, end of day. And the software also does excellent work promoting safety and other compliance issues, making company brass never have to worry about keeping track themselves of a sometimes seemingly endless series of governmental regulations. CMMS automatically performs all of this work and more.

But it pays for these companies to realistically consider costs before implementing any CMMS program. Sometimes, companies can forego certain analytic services in their CMMS suite, analyze whether Web or LAN-based hosting is ideal depending on their budget, or even time the institution of CMMS around key points of their operations schedule. Free generally isn’t free when it comes to CMMS. That being said, the cost doesn’t have to be prohibitive, either.