How Much is Machine Downtime Really Costing You? Let’s Do the Math

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 costs¹Business Industrial Network, What is the “True Downtime Cost” (TDC)?
https://bin95.com/news/whats_true_downtime_cost.htm — 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, including²The Up! App, Predictive Maintenance vs. Preventative Maintenance for CNC Machines, Lathes, and Milling Machines; November 22, 2022
https://www.theupapp.com/predictive-maintenance-vs-preventative-maintenance-for-machine-shops/:

• 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 2014³Aberdeen 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
• Downtime varies significantly by industry — in the auto industry, downtime costs up to $50,000 per minute and $3 million per hour⁴Thomas, Downtime Costs Auto Industry $22k/Minute — Survey, March 29, 2006
  https://news.thomasnet.com/companystory/downtime-costs-auto-industry-22k-minute-survey-481017
• Factories lose an estimated 5%– 20% of productivity to downtime⁵International 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/
• Equipment failure is a leading cause of machine downtime.
• Human error accounts for approximately 23% of unplanned downtime⁶Business 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
• A 2017 survey revealed that 70% of companies don’t know when their equipment is due for maintenance or upgrades⁷ServiceMax, The Costs, Causes & Consequences of Unplanned Downtime,
  https://lp.servicemax.com/WP-BE-Unplanned-Downtime-LP.html

 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

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.

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Posted on: January 17th, 2023 by: Precision Drive Systems