Factory downtime costs are the bane of the manufacturing industry, with facilities losing anywhere from five to twenty percent of productivity to downtime every month. Exact facility downtime costs are surprisingly hard to pin down: Eighty percent of companies fail to properly calculate downtime costs, with some companies underestimating factory downtime costs by as much as 300 percent.
A company that doesn’t accurately track downtime has no benchmark for improvement. It’s difficult to know, for instance, how to avoid downtime through increased maintenance training if you cannot measure training’s impact on facility operations (especially as training often results in temporary downtime due to travel and the absence of trainees from the workplace). To learn how to avoid downtime, then, you have to first understand how to calculate factory downtime costs.
What is Downtime?
Downtime is defined as any period of time when factory processes are not running and production has stopped. Most often, this relates to problems with machinery or equipment, but downtime can also be caused by emergency evacuations, power outages, injury incidents, or absent personnel.
Factory downtime costs, or “true downtime costs,” include employee wages paid during downtime, lost business, utility costs, equipment repair and replacement costs. Less tangible facility downtime costs, such as employee morale, responsiveness, and customer satisfaction, are more difficult to calculate but can have far-reaching consequences.
Calculating Factory Downtime Costs
To calculate your true factory downtime costs, You’ll need to know your total downtime and downtime cost per minute. You find these numbers by making the following calculations:
- Planned operating time per month - Actual operating time = Total monthly downtime
- Number of units produced per minute x Profit per unit = Downtime cost per minute
Use these numbers to determine your monthly downtime costs with this formula:
- Total monthly downtime (in minutes) x Cost of downtime per minute = Monthly cost of downtime
How to Avoid Facility Downtime Costs
Facility downtime costs can be reduced in a number of ways, including improving process efficiencies, proper inventory supplies, and improved staff communication. Improved maintenance is generally seen as the most important factor. A company’s ability to prevent equipment issues — and to repair machinery quickly and efficiently — is key to reducing facility downtime costs. The better trained your maintenance staff, the less risk of sudden equipment failures and corresponding downtime costs.
Traditional offsite training carries with it the potential for its own downtime costs. A three-day offsite training seminar with a day for travel on each side of the course pretty much takes your maintenance staff out of play for a five-day work week. In a worst case scenario, equipment fails during training, leaving you with only a skeleton staff in your maintenance department who may (or may not) be able to resolve the problem before your trainees return.
Virtual Instructor-led Training (VILT) and simulation training allow you to sidestep this possibility. Virtual training courses provide access to experienced, live instructors who provide face-to-face instruction through video conferencing. Courses may be taken within the facility or at the employee’s home. If virtual courses run during work hours, employees remain available should unexpected downtime occur.
In addition to regularly scheduled virtual training seminars, TPC Training also offers private virtual training and on-site training options, allowing instructors to focus on site-specific downtime issues..
Simulated training reduces factory downtime costs by providing employees with hands-on experience resolving downtime-related issues. Working within a safe, virtual environment, employees learn how to resolve a range of downtime issues without bringing your production line to a halt. Simulated training can be customized to reflect your facility’s unique set of processes, equipment, and machinery, providing an opportunity for maintenance staff to practice resolving your most common causes of facility downtime.
Factory downtime costs are an expensive aspect of any manufacturing facility. By combining accurate measurements of true downtime costs with up-to-date virtual and simulation-based maintenance training, you can keep your downtime costs to a minimum while increasing productivity.