Hidden Costs of a Facilities Maintenance Work Order

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In theory, utilizing service providers with lower rates would reduce the overall cost of facility maintenance. However, the hourly rate charged by technicians is only one factor that should be considered.

For example, improved visibility into preventive maintenance schedules could reduce the total number of necessary work orders. Industry research indicates that eliminating unnecessary work orders can reduce facility maintenance expenses by 20%.

According to a report from Chain Store Age, the top five areas facility managers overspend on are:

  • Budget management: Attempts at slashing not-to-exceed (NTE) limits often lead to redundant service calls and increased labor costs. 
  • Equipment management: Failure to track equipment history makes it impossible to forecast future maintenance needs.
  • Maintenance on equipment under warranty: Automated tracking of equipment warranty terms can reduce unnecessary spend.
  • Vendor technology fees: Quantifying the ROI from management vendors can illuminate new opportunities for using technology to its highest potential.
  • Maintenance schedules: Unoptimized maintenance schedules, or lack of investment in preventive maintenance, can drive up costs.

With so many leakage points in the average facility management budget, stakeholders can leverage work order management as a bottleneck to capture unnecessary spend. By widening the scope of view to include all of the costs associated with work orders, facility stakeholders can uncover opportunities to control maintenance spend. 

Hourly rate is just one piece of the work order puzzle

Often, there’s more to work order management than simply choosing the provider with the lowest hourly rate. Automated cost control technology empowers facility managers to complete work orders satisfactorily and only pay for parts used.

Work order management technology can give facility stakeholders visibility into all aspects of service, such as: 

  • Trip charges: Service charge, fuel, mileage, etc.
  • Labor: Regular hours and overtime.
  • Materials: Parts and mark-up.
  • Labor duration: Time spent on every service request.
  • Tax: City, county and state.
  • Miscellaneous charges: Freight, shipping, equipment rental, etc.  

When looking to cut facilities spend, stakeholders tend to focus on the large capital expenditures. However, uncontrolled transaction-level spend adds up quickly. Verifying each work order and controlling NTE's can uncover significant savings opportunities. Tracking each of these variables for each work order at every location would be all but impossible to complete manually, especially in a timely manner. 

Performance visibility to uncover opportunities

The ability to track work order metrics on an equipment-by-equipment basis provides facility managers with more opportunities to identify waste and recapture spend that can be applied to other areas of the business. In fact, 69% of best-in-class enterprises track work order completion time as well as maintenance request response time.

Vixxo controls labor duration against benchmarks, utilizing more than 45 million annual data points to understand how long it takes to complete any repair across more than 100 trades. This ensures that facility managers aren’t charged for a minute more than they should be. In fact, our automated technology won’t let an invoice through if the duration is outside of acceptable parameters. Our patented cost management solution addresses every type of cost within a work order.

  • Trip charges: Pre-determined agreements ensure that trip charges are limited and mileage charges are not allowed.
  • Labor: Industry- and region-level data benchmarks ensure facility managers aren’t overcharged.
  • Materials: Automated technology matches material costs against benchmarks to prevent up-charges.
  • Labor duration: Knowing exactly how long every repair should take reduces the risk of padded labor costs. 
  • Tax: Automated technology ensures taxes are verified by the region of repair.
  • Miscellaneous charges: Every charge is managed and verified prior to invoicing to ensure fair pricing. 

Combined, these solutions ensure you’re never surprised by hidden work order costs. This makes it easier to accurately forecast future maintenance needs. 

Takeaways

  • Hourly rate should never be the only metric used when choosing service providers.
  • Effective work order management can reduce operational costs.
  • Taking a holistic view of all costs included in work orders improves spend visibility.
  • Working with a facility management partner helps facility leaders take control of work order spend with smart technology.

Managing your facility’s work orders with automated technology ensures that every order is subjected to the same high level of quality assurance. To learn more about hidden work order costs and how to reduce operational spend without risking your established relationships with your favorite service providers, connect with a trusted Vixxo consultant today.



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