Most people are familiar with the costs of doing business: wages for workers, office rent, the cost of raw materials, and product shipping, to name a few. What many don't realize is that there are costs when a business is not running (downtime). Machine stoppages, loss of Internet connectivity, and employee errors can result in losses of millions to billions of dollars from the company's bottom line. Industries like manufacturing are turning to solutions, from greater employee training to AI automation, to reduce the period of downtime and its costs.
- What is Downtime in Manufacturing?
- Major Causes of Downtime in Manufacturing
- The Hidden Cost of Downtime in Manufacturing
- Strategies to Reduce Downtime in Manufacturing
What is Downtime in Manufacturing?
Simply, downtime in manufacturing is any time the production line is stopped. There are two forms of downtime:
- Planned downtime are deliberate stoppages. These have been scheduled or otherwise anticipated by the manufacturer. Shutting down an assembly line for regular maintenance or upgrade is planned downtime.
- Unplanned downtime is an unexpected stoppage. Machinery that won't start at the beginning of a shift, or a vital computer suddenly turns off in the middle of a production run, are examples of unplanned downtime. By their very nature, companies cannot expect them when they will occur.
Major Causes of Downtime in Manufacturing
Both planned and unplanned downtime incur costs for companies. Unplanned downtime is the worst of the two, since the company could not have properly budgeted or scheduled for the loss. Repair bills are usually higher as well. Since it's far harder to predict when production can resume, revenue loss due to unplanned downtime is higher due to the time wasted while performing repairs.
Causes of unplanned downtime include:
Equipment Failure
Components in the machinery, such as sensors, fans, belts, pumps, or motors, can jam or fail. There may be leaks of oil, water, or other chemicals. These and more can lead to minor issues that, left unresolved, can result in major malfunctions and unplanned downtime.
Poor Maintenance Practices
Machines suffer wear and tear over time. The arms of the industrial robot assembling car parts may not swivel correctly anymore. Extreme environments, like high heat, frigid cold, and excessive dust, may slow down computer operation. Lack of – or improper – maintenance of such machines and other vital equipment can lead to an unexpected shutdown.
Supply Chain Disruptions
Businesses today heavily rely on others to keep them supplied and operate properly. Example: steel manufacturers need mining companies and power plants to provide the necessary raw materials and power. Events like extreme weather or an earthquake, a workers' strike, or on-and-off again tariffs can inflict unplanned downtime on everyone in the supply chain.
Human Error
Despite advances in automation across most industries, human workers are still needed to handle many tasks. Thus, human errors, whether due to inadequate training, lack of experience, stress, or inattention, can lead to production stoppages and unplanned downtime.
Software & Technology Failures
Computers, electronic devices, and networks have revolutionized virtually every sector, from Industry 4.0 in manufacturing to the digital transformation of healthcare. Unfortunately, outdated software and hardware, industrial cybersecurity, and Internet outages can have users swiping around their smartphones in boredom until the workplace issues are resolved.
The Hidden Cost of Downtime in Manufacturing
Downtime stops production from the manufacturer, regardless of whether it's planned or unplanned. While financial costs are commonly touted, there are other consequences, especially when downtime is unplanned.
Lost Revenue
Downtime costs vary from sector to sector and even from business to business. Regardless, the numbers can be quite high. B2B research company Aberdeen estimates that the average business loses $260,000 per hour of downtime. This results in a loss of over $2 million in just four hours of downtime. This figure does not account for workplace accidents, equipment replacements, or other expenses, which are detailed below.
Productivity Losses and Workforce Inefficiency
Businesses not only suffer financially from downtime, but also in productivity. An average manufacturing plant, in an article written by the International Society of Automation, loses 5 to 20 percent of its annual productivity to unplanned downtime. The loss is not only felt financially (as shown above) but can lead to an increase in worker injuries due to stress and a lack of familiarity with the problem.
Increased Emergency Maintenance and Logistics Costs
Companies will have to pay more to resolve the issue(s) causing the unplanned downtime. These expenses can range from hiring specialists and paying for any overtime to purchasing and installing costly replacement or new equipment. And once the repairs are completed, the company may need to pay extra for expedited shipping costs to keep customers happy (see the following).
Customer Dissatisfaction and Damaged Trust
Unplanned downtime can delay orders, which can be frustrating for customers. They may, in turn, order less from that business in the future or give referrals. They may even seek more reliable competitors if the delay is extreme or they are dissatisfied with the explanations for the unplanned downtime.
Strategies to Reduce Downtime in Manufacturing
All companies will have to face some downtime. Even planned stoppages to install new, more efficient machinery and their industrial computers result in lost productivity and income. Companies thus look for strategies to reduce downtime as much as possible, especially the more unplanned (and costly) downtime.
Preventive Maintenance Programs
Simply, preventive maintenance programs are routine, regularly scheduled inspections of equipment involved in production. Any worn-out components, failing systems, and deteriorating devices are fixed and replaced before they fail. The U.S. Department of Energy estimates that preventive maintenance programs save between 12 to 18 percent in expenses compared to fixing equipment after failure (reactive maintenance).
Predictive Analytics and IoT Monitoring
Unlike preventive maintenance programs, which rely on routinely collected data, predictive analytics monitors machinery conditions in real-time through a web of interconnected sensors (Internet of Things or IoT). AI computers analyze the IoT's data for current and possible future issues. Staff are then alerted to proactively deal with these issues before they cause problems and downtime.
Standardized Operating Procedures & Training
As previously mentioned, human error can be a cause for unplanned downtime. To minimize the chance, the company's machinery and its operating procedures should be standardized as much as possible. Working with an original equipment manufacturer can ensure such conformity. Workers should then be brought up-to-speed with the workings of their particular job and all involved machinery. That includes recognizing early signs of potential machine failure and the process to report it promptly.
Stronger Supply Chain Management
While certain supply chain disruptions – like storms wiping out a critical parts supplier – are beyond a company's control, others, like a workers' strike, can be anticipated and prepared for. Companies should have a diverse pool of vendors and suppliers. This ensures it always has the materials needed for production at hand.
Modernizing Equipment and Technology
Older equipment is more prone to failure, whether due to wear and tear, inadequate maintenance, or incompatibility with newer systems. To reduce this risk, companies should conduct an audit of their machinery and replace outdated equipment with new, more modern alternatives. Older but still vital pieces of equipment should be connected to computers with legacy ports for both access as well as protection from cyberattacks.
Reducing Downtime for a Competitive Edge with Cybernet PCs
Downtime is any period when a company's production line is not functioning. The consequences can be severe, as sales drop due to loss of productivity and expenses skyrocket as workers scramble to restart production lines. Unplanned downtime, especially, can be devastating for companies as they cannot be prepared for and budgeted accordingly.
Contact an expert at Cybernet Manufacturing to reduce downtime and its impact on your company. Our computer lineup – medical, industrial, and business – has been built from the ground up to handle the many unique challenges of their respective industries, ensuring they'll keep functioning as you restart the machinery around them.