Why you need it
Cost per asset answers “how much does this pump cost me?” But many decisions are made one level up: replacing a line, renegotiating a building contract or investing in a plant.
The roll-up carries costs up the tree. The cost of line 2 is the cost of its equipment, plus its groupings, plus anything charged to the line itself.
What gets added
- Labor hours on each job, at the cost of each labor category.
- Spare parts and materials used.
- Outside services and subcontractor work.
All under the same date filter, so you compare like periods.
An example
A packaging line costs $52,000 a year to maintain. The roll-up shows that the filler takes $26,000, half of it. The conversation with management stops being “the line is expensive” and becomes “this machine costs half the line.” These are example figures.
The usual mistake
Charging the same cost at several levels. If a part is charged to the machine and also to the line, the roll-up counts it twice. Each cost goes to the lowest level where it can be identified, and the tree carries it up.