As the potential tariffs between the United States and Canada remain in flux, businesses in asset-intensive industries are grappling with an uncertain financial outlook. With tariffs possibly reaching as high as 25%, the cost of equipment, parts, and tools is expected to rise, affecting sectors such as manufacturing, oil and gas, and mining. While the exact details of these tariffs continue to shift, one thing is certain: businesses will likely feel the financial impact in the form of increased costs.
In light of this ongoing uncertainty, prioritizing preventative maintenance strategies has never been more critical. Preventative maintenance has always been a best practice in managing the lifecycle of assets. However, with rising equipment costs and escalating operational expenses due to tariffs, it has now become a necessity. The goal is clear: increase equipment longevity, reduce the frequency of costly breakdowns, and minimize the impact of rising prices.
Understanding the Financial Impact
The imposition of tariffs is expected to have a devastating effect on the cost of equipment and spare parts. As Kim Bildfell, S4A’s EAM Functional Consultant who has spent 20 years in the oil and gas industry as a millwright mechanic, explains, “The tariffs will not only increase the cost of equipment but will also affect parts such as belts, bearings, lubricants, and tools required to maintain those assets.” When equipment crosses borders multiple times during its manufacturing process, each crossing can add significant additional costs, compounding the effect of the tariffs.
Beyond the tangible rise in parts and equipment prices, businesses will also face increased operational costs. As Bildfell notes, these tariffs are not just an economic burden – they represent a broader financial strain that manufacturers will inevitably pass on to consumers, leading to higher production costs across the board.
Preventative Maintenance: The Answer to Soaring Costs
Given these increased costs, preventative maintenance has become more critical than ever. By implementing a regularly scheduled preventative maintenance program, companies can avoid premature equipment failures that might otherwise result in costly repairs or replacements. Bildfell highlights the potential consequences of neglecting preventative strategies: “Premature failures include the cost of replacing failed parts, production downtime, potential damage to a company’s reputation, and, in worst-case scenarios, employee injuries or environmental damage.”
The financial implications of neglecting maintenance can be staggering. A single unexpected breakdown could lead to a halt in production, causing loss of revenue and a ripple effect across the business. In industries where reputation is key, a failure to maintain equipment can also harm a company’s credibility and reliability. Furthermore, catastrophic failures can lead to safety issues, with the possibility of regulatory fines or even legal consequences if accidents or environmental damage occur.
By investing in preventative maintenance, businesses can mitigate these risks, ensuring that their assets remain in optimal condition. Regular inspections, timely repairs, and accurate forecasting all help to extend the life of machinery, reduce downtime, and avoid the need for emergency replacements. In turn, this minimizes the financial impact of the tariffs.
Embracing Technology for Preventative Maintenance Success
Digital solutions, such as BlueWorx and Envoy Maestro, can help companies implement and enhance their preventative maintenance strategies. With more accurate, real-time data from assets, these digital tools allow companies to perform inspections more efficiently and accurately. For example, BlueWorx provides technicians with the ability to conduct real-time inspections of assets, which significantly improves the timing and accuracy of inspection data. This allows engineering teams to identify trends, perform root cause analysis, and make data-driven decisions about when and how to perform maintenance.
As Bildfell explains, “Having accurate inspection data readily available for engineering teams greatly improves their ability to perform trend analysis of equipment and root cause analysis in the event of failures. This allows companies to adjust their preventative maintenance programs to maximize the use of their equipment, minimize costs, and maximize profits.”
In the face of rising costs, being able to extend the life of equipment through better-maintained assets becomes not just an operational necessity but a competitive advantage. Digital solutions can also help companies optimize their schedules, ensuring that preventative tasks are completed on time, and reactive maintenance is minimized.
Protect Your Bottom Line with Strategic Asset Management Technology
The impending tariffs are set to drive up costs across industries, and asset-intensive companies will undoubtedly feel the financial strain. Now is the time to take proactive action.
By embracing a more strategic, technology-driven approach to asset maintenance, businesses can mitigate the impact of rising equipment costs. S4A IT Solutions offers powerful tools, like BlueWorx and Envoy Maestro, to help organizations streamline their maintenance processes, optimize schedules, and extend the life of their assets.
Interested in learning more? Speak with one of our EAM specialists to discuss how your organization can not only protect its bottom line but position itself for long-term success in an increasingly uncertain economic environment.
