The costly effects of machine downtime
Lee Dover, from Houghton International, expresses concerns about how machine downtime can have a drastic impact if a business is not prepared for it.
No matter what industry you specialise in, machine downtime can have a major impact on your business; if you’re not prepared, technical errors in your appliances can bring significant costs to your productivity and negatively impact your business’s profit margin.
Due to the rising reliance on technology across the board, machine downtime affects every industry. For example, IT downtime costs UK businesses £3.6 million a year, on average.
Machine downtime can also bring a negative impact to various aspects of your business. Think about your company’s reputation if it fails to meet supplier demand, the stress it puts on your employees who must rectify the downtime, and a workforce with lower morale due to lack of productivity. The key to reducing the impact of machine downtime is to know its effect on your business and plan a reaction to soften its impact.
Machinery downtime affects labour costs, product costs, recovery costs, and other cost including the damage to your brand’s reputation.
To work out your labour costs, you need to multiply the duration of the machine downtime period by the hourly rate of your operators. Obviously, this depends on how reliant your workers are on machines and technology. For example, if your business’s server goes down, your reception staff may still be able to answer queries but won’t be able to log details or access your database to book appointments. On the other hand, if a production lines loses power, the employees on it won’t be able to use tools and machines to do anything.
To work out the lost produce costs of machine downtime you can just put a price on a single-unit product and multiple it by how many items you produce in a certain period, and then multiply that number by the machine downtime period.
However, depending on the type of business you are, costs of downtime will be different. If you’re a 100% ecommerce business and your site go down, you’re losing 100% of product costs, as nobody can buy from you. However, if you have other sales platforms – a shop, or call centre – then those costs are mitigated.
When determining an overall cost of machine downtime, you must take into account recovery charges: machine reboots, energy surges, replacing/repairing parts, and retrieving lost data. Then, add this onto your other calculations to get a more accurate machine downtime value.
Discovering all the intangible, extra costs that machine downtime has created is perhaps the toughest part of calculating machine downtime. Rather than using figures to work this out, it’s worth simply bearing in mind that the value of machine downtime goes beyond profits lost during the downtime period itself.
Your final calculation should include the total amount of each of the above sections, and it becomes clear that costs can rack up when it comes to machine downtime, so it’s essential companies implement a plan to help reduce the negative impact.
It’s most cases, more than half of machinery downtime is due to hidden internal faults. So, it’s essential that you regularly check and maintain your machines.
Chris Proctor, Oneserve CEO, said: “One of the most common technical faults is the overheating of particular parts, especially where there is metal on metal, as these can short electrical circuits and cause the machines to stop running.
“Vibrations, usually the first sign a machine is breaking, are another major cause of internal technical fault — they cause a cascading effect which can have a devastating impact on the machine. General wear and tear, as well as operator misuse, can also be the cause of technical fault.”
Simple services, like industrial pump repairs, can highlight internal issues that could have otherwise sparked lengthy machine downtime if not noticed. Adopt a preventative maintenance mindset and check your machines and computers for viruses, glitches, and inefficient parts that could cause a companywide cessation of work.
Boost manager-to-operator communications so that those working with the machines in question can relay concerns if they have any before it’s too late. Commit your company to regularly updating your software and equipment and ensure that every member of staff is trained to use their machine or working station properly to reduce the chance of user-error. IoT (Internet of Things) is also an avenue of downtime prevention. Use the abilities of fault-notification sensors to help detect dropping performance levels and computing clouds to store vital data. Using innovations like these will help you arrange repair services prior to scheduled manual checks, while backing-up details and services in the case of a malfunction.
All industries must deal with machine downtime. However, it doesn’t have to spell disaster. Bear preventative methods in mind and make sure to keep on top of downtime calculations so that you have an accurate oversight of the effect of downtime on your staff, processes, and profit margin.