Machine downtime is the leading cause of lost production time. Unfortunately, according to the Business Industrial Network, more than 80% of business owners can’t accurately calculate their actual downtime costs1 — partially because there are two types of downtime:
Planned Downtime
- Routine maintenance or repairs that allow you to plan for and recover lost income
- Requires shorter recovery time with lower costs than unplanned downtime
Unplanned Downtime
- Unexpected equipment failures that keep your business from producing value
- Raises overhead and negatively impacts your bottom line
The Downside of Unplanned Downtime
Unplanned downtime puts your partnerships and customer relationships at risk through:
- Production delays
- Delayed deliveries
- Lost income
- Increased stress throughout the production and supply chain
How to Prevent Unplanned Machine Downtime
Some downtime is unavoidable — even the best manufacturing systems and parts eventually wear out or fail. But you can manage some of those costs and risks by scheduling planned downtime — routine maintenance and repairs that help prevent equipment failure. You can also build in resources to reduce the impact of unexpected equipment failures:
Incorporate Predictive Maintenance Measures
There is a vast range of affordable devices that can help predict machine failures, including2:
- Infrared thermal imaging
- Vibration analysis
- Oil analysis
- Integrated sensors
- Monitoring modules
Develop a Network of Qualified Repair Technicians
Cultivate a network of trusted repair technicians to help optimize your uptime through:
- Eliminating lengthy searches for qualified service resources
- Efficient service request submissions
- Quick and responsive quotes
- Greater employee and operational productivity
What You Don’t Know About Machine Downtime Can Hurt You
- According to a 2016 study, the average cost of downtime across all businesses was $260,000 per hour — up 60% over 20143.
- Downtime varies significantly by industry — in the auto industry, downtime costs up to $50,000 per minute and $3 million per hour4.
- Factories lose an estimated 5%– 20% of productivity to downtime5.
- Equipment failure is a leading cause of machine downtime.
- Human error accounts for approximately 23% of unplanned downtime6.
- A 2017 survey revealed that 70% of companies don’t know when their equipment is due for maintenance or upgrades7.
How to Calculate Machine Downtime
Let’s say one machine goes down for three full days.
To find your total losses, complete the equation below using the following information:
- Hours of downtime
- Average number of units produced per week
- The machine’s operating hours
- Gross profit per unit
Machine Production Specifications
Daily Operating Hours | Weekly Operating Hours | Average # of Units Produced/Week | Gross Profit/Unit |
---|---|---|---|
8 hours | 40 hours | 10,000 units | $6 |
Calculate Hours of Downtime
Hours of Downtime/ 40-Hour Week | Days of Downtime | Hours |
---|---|---|
8 hours | X 3 days | 24 hours of downtime |
Calculate Units Produced/Hour
Average Units Produced Weekly | Planned Hours of Operation | Units Produced/Hour |
---|---|---|
10,000 units | ÷ 40 hours | 250 units |
Calculate Unproduced Units
Units Produced/Hour | Hours of Downtime | Unproduced Units |
---|---|---|
250 units | ÷ 40 hours | 250 units |
Calculate Hours of Downtime
Planned Operating Time | Actual Operating Time | Hours |
---|---|---|
40 hours | – 16 hours | = 24 hours of downtime |
Calculate Average Production Rate/Hour
Total Number of Units Produced Weekly | Planned Operating Time | Average Production Rate/ Hour |
---|---|---|
10,000 units | ÷ 40 hours | = 250 units/hour |
Calculate Unproduced Units
Hours of Downtime | Average Production Rate | # of Unproduced Units |
---|---|---|
24 hours | X 250 units | 6,000 units |
Calculate Total Gross Profit Lost
# of Unproduced Units | Gross Profit /Unit | Total Gross Profit Lost |
---|---|---|
6,000 units | X $6 | $36,000 |
On top of gross profit lost, you’ll probably have to pay a professional to fix your downed unit. But remember — the actual cost of downtime isn’t lost profit — it’s time wasted.
SOURCES
1 Business Industrial Network, What is the “True Downtime Cost” (TDC)?
https://bin95.com/news/whats_true_downtime_cost.htm
2 The Up! App, Predictive Maintenance vs. Preventative Maintenance for CNC Machines, Lathes, and Milling Machines
https://www.theupapp.com/predictive-maintenance-vs-preventative-maintenance-for-machine-shops/
3 Aberdeen Strategy & Research, The (Rising!) Cost of Downtime, April 21, 2016
https://www.aberdeen.com/techpro-essentials/stat-of-the-week-the-rising-cost-of-downtime/
4 Thomas, Downtime Costs Auto Industry $22k/Minute — Survey, March 29, 2006
https://news.thomasnet.com/companystory/downtime-costs-auto-industry-22k-minute-survey-481017
5 International Society of Automation, When True Cost of Downtime is Unknown Bad Decisions Ensue
https://www.isa.org/standards-and-publications/isa-publications/intech-magazine/2006/January/channel-chat-when-true-cost-of-downtime-is-unknown-bad-decisions-ensue/
6 Business Wire, Human Error is More Common Cause of Unplanned Downtime in Manufacturing Than Any Other Sector, According to New Research, November 7, 2017
https://www.businesswire.com/news/home/20171106006370/en/Human-Error-Common-Unplanned-Downtime-Manufacturing-Sector
7 ServiceMax, The Costs, Causes & Consequences of Unplanned Downtime
https://lp.servicemax.com/Vanson-Bourne-Whitepaper-Unplanned-Downtime-LP.html
Posted on: January 17th, 2023 by: Precision Drive Systems