Upon completion of this course, participants will be able to:

• Apply Total Cost of Ownership (TCO) to all major asset decisions.
• Develop and manage maintenance budgets based on value-driven principles.
• Identify and prioritize cost-reduction opportunities in maintenance spending.
• Utilize Activity-Based Costing (ABC) for maintenance activities.
• Analyze maintenance cost data to identify high-cost assets and failure modes.
• Implement strategies for optimizing spare parts inventory investment.
• Calculate and justify the Return on Investment (ROI) for reliability projects.
• Measure the hidden costs of reactive maintenance and poor asset performance.

• Maintenance Managers and Directors
• Reliability and Asset Engineers
• Financial Analysts supporting Operations
• Capital Planners and Procurement Specialists
• CMMS/EAM System Data Analysts
• Senior Maintenance Planners

• Case studies on successful cost reduction programs
• Individual exercises in calculating TCO and ROI
• Group simulation on budget allocation and trade-offs
• Role-playing negotiations with external vendors and contractors
• Data analysis workshops using simulated CMMS cost reports

Unit 1: Strategic Costing and Value Management

• Defining the components of TCO (acquisition, operation, maintenance, disposal).
• Using TCO in the asset selection and procurement process.
• Comparing TCO with Life Cycle Costing (LCC).
• Developing economic justification for asset replacement vs. refurbishment.

• Moving from cost-center thinking to profit-contribution.
• Zero-Based Budgeting (ZBB) techniques for maintenance.
• Variance analysis and corrective action planning.
• Benchmarking maintenance costs against peer groups.

Unit 2: Cost Analysis and Failure Economics

• Segmenting maintenance costs (labor, materials, contracted services).
• Applying Pareto analysis to identify the 20% of assets driving 80% of costs.
• Calculating the Cost of Unplanned Downtime (CUD).
• Identifying the hidden costs associated with poor quality maintenance.

• Introduction to ABC principles in a maintenance context.
• Defining cost drivers and cost objects for maintenance tasks.
• Using ABC to accurately price internal services.
• Utilizing ABC data to prioritize preventive maintenance tasks.

Unit 3: Optimizing Maintenance Investment

• Defining the quantifiable benefits of reliability improvements.
• Techniques for calculating Net Present Value (NPV) and Internal Rate of Return (IRR).
• Developing compelling business cases for capital investment in reliability.
• Monitoring and reporting post-project realization of benefits.

• Strategies for identifying and eliminating obsolete and excess stock.
• Optimizing reorder points and order quantities to minimize holding costs.
• Cost implications of stockouts and emergency procurement.
• Managing critical spares investment (risk-based approach).

Unit 4: Contract Management and Outsourcing

• Developing cost-effective contracts for maintenance services.
• Key performance indicators (KPIs) for contractor management.
• Strategies for managing contractor scope creep and cost overruns.
• The make-or-buy decision: insourcing versus outsourcing analysis.

Unit 5: Financial Justification for Modernization

• Justifying CMMS/EAM upgrades based on financial benefits.
• Financial analysis of condition monitoring technology implementation.
• Building a case for digitization and automation in maintenance.
• Forecasting future maintenance costs based on asset age and condition.