It’s estimated 80% of manufacturers are unable to accurately calculate their downtime or understand the costs associated with lost production. Many companies also underestimate the true cost of downtime by overlooking less obvious sources of lost revenue.
In order to minimize the financial loss associated with machine downtime, it’s critical that manufacturers are able to identify the source, total time and true cost of downtime. We’ve compiled the tangible and intangible costs related to lost production as well as a solution to quickly identify where downtime is coming from in order to take quick action.
Downtime Costs Include:
1. Lost Production
The most obvious cost of downtime is lost production. The revenue associated with producing parts and products is lost with each minute of downtime. By calculating how much revenue is generated by the production of items in a given time period, manufacturers can determine the financial cost of lost production. From the perspective of OEE and TEEP, downtime is captured as an availability loss.
2. Labor Costs
The direct labor costs associated with downtime is paying idle employees when machines are down. There are also indirect labor costs connected to downtime, including the pulling of maintenance and other supervisors involved in resolving the downtime issue, which leads to delay of other projects and initiatives.
3. Lost Capacity
Manufacturers that experience sudden increases in demand need to operate at a higher capacity. Reducing downtime creates additional capacity at no cost and allows organizations to fulfill orders during times of higher demand.
4. Cost of Waste
If perishable items are used during production, especially in a food and beverage manufacturing environment, the raw items could be wasted while the machine is down and in repair.
5. Lost Business Opportunities
Downtime can be very time consuming for manufacturers. Time spent identifying bottlenecks and fixing machine issues is time that is not spent on new opportunities and innovative strategies for the business.
Automation Intellect provides real-time and historical insight into what is causing downtime and identifies the source of your most costly production issues.
Automation Intellect provides a plant level view of performance with visual alerting of OEE metrics including Availability, which is where plants see their biggest production losses.
Drill down into a line to see OEE metrics and details on production, faults and downtime.
Get granular level detail on faults and downtime, including which machines have the most occurring faults and the highest aggregated amount of downtime.
By analyzing revenue associated with each part produced, manufacturers can understand the financial losses associated with downtime in order to prioritize efforts to resolve issues.
With Automation Intellect you will know:
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Where downtime is coming from
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The source of your most costly downtime
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Total amount of downtime per fault and machine
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When and where to take action
