Downtime in manufacturing can disrupt daily business operations, ultimately costing businesses a lot. Statistics reveal that downtime costs small businesses an average of $1,410 per minute. It can be due to equipment failure, unplanned maintenance, and supply chain delays.
If your business is experiencing this issue and you are struggling to control its impact, this guide is for you. We are going to discuss the major disadvantages of downtime in manufacturing and how to mitigate them.
Disadvantages of Downtime in Manufacturing Due to Machinery Malfunction
The following are some disadvantages of downtime in manufacturing that severely impact your business:
Lowers Production
Firstly, downtime in manufacturing can affect overall production capacity. When machines are idle for hours, you may not be able to fulfill your expected output targets.
For instance, you were producing 100 units per day. However, unplanned downtime limited your capacity to only 40 daily units, reducing production by more than half.
This results in delayed orders, which can be quite a hit for your business, considering on-time delivery is the norm and even a little delay can dissatisfy clients.
Decreases Productivity
Another downside of downtime in manufacturing is reduced productivity. How? Well, as machines stop working, employees find it challenging to complete their tasks efficiently.
They cannot focus on their regular duties and spend their time troubleshooting issues and waiting for repairs. All this disrupts workflows and wastes valuable labor hours, reducing overall output.
Impact Customer Relationship
Nowadays, customers stay loyal to businesses that meet and exceed their expectations, especially in terms of product delivery. Statistics show that 33% of consumers have higher expectations for fast shipping.
However, half of all companies that experience downtime (46%) cannot deliver services to customers as a result.
If you are also experiencing the same issue, you’ll likely struggle to maintain client trust, which can result in lost business and a poor reputation.
Reduces Staff Morale
Downtime in manufacturing can reduce your staff morale. Employees get frustrated by sitting idle for hours, and if the downtime expands over days or weeks, they may even leave the job. In some cases, you may lay off some employees to reduce losses.
You will then have to get new employees on board and invest in their training, which can increase your business expenses. According to Exploding Topics, the average onboarding cost is $1,830 per hire, which is relatively high.
How to Calculate the Cost of Downtime in Manufacturing Due to Machinery Malfunction?
Suppose you want to calculate the total or average cost of downtime in manufacturing for your business. In that case, you need to consider direct costs, such as unused materials or wasted inventory, and indirect costs, like canceled orders.
The formula you can use for this is:
Cost of Downtime = ((Hourly Production Value x Accurate Hourly Labor Cost x Hourly Overheads Cost) x Overall Duration of Downtime) + Loss of Recurring Revenue + Loss of Future Revenue
Here’s an example to help you understand this better:
Hourly Production Value: $10,000
Accurate Hourly Labour Cost: $1,000
Hourly Overheads Cost: $5,000
Duration of Downtime: 3 hours
Loss of Recurring Revenue: $4,000
Loss of Future Revenue: $2,000
(($10,000 + $1,000 + $5,000) × 3) + $4,000 + $2,000 = $54,000
Considering these values, the overall cost of downtime for just three hours will be around $54,000.
Ways to Mitigate The Downtime
Now that you are aware of the disadvantages of downtime in manufacturing let’s discuss the strategies you can use to mitigate it:
Implement Preventive and Predictive Maintenance
One of the best ways to reduce downtime in manufacturing is by implementing preventive and predictive maintenance. For instance, you should timely service the equipment, whether replacing worn-out parts or ensuring lubrication.
You must have extra machinery parts so that in case of damage or failure, you can change them quickly instead of waiting for days for the additional parts to arrive. For this, you should contact a reliable industrial machinery parts sourcing company like Encistra. This is especially important when searching for hard-to-find machine components. Otherwise, finding and sourcing obsolete parts at crunch moments can quadruple the losses.
On top of this, you should leverage productive analytics to forecast potential failures even before they occur. For example, machine sensors can keep an eye on different metrics like temperature, vibrations, or pressure.
If any of these metrics deviate from normal, such as the manufacturing equipment making more noise than usual, you’ll immediately receive an alert. You can then schedule servicing for the equipment before any major and expensive breakdown happens.
Invest in Training and Continuous Improvement
Investing in employee training and continuous improvement can help you avoid frequent downtimes.
You should guide your employees properly about machine handling and maintenance protocols.
Adequate knowledge gives workers the necessary peace of mind that they can operate equipment correctly and take immediate action to prevent failure.
Use Advanced Technological Solutions
Advanced technological solutions like downtime tracking software can mitigate downtime in manufacturing.
Such tools provide insights into machine usage patterns, inform you about maintenance schedules, and identify potential points of failure.
This extensive data helps you make informed decisions about equipment servicing, keeping your Encistra manufacturing facility operational, and maximizing productivity.
FAQs
What are the common causes of downtime in manufacturing?
Some common causes of manufacturing downtime include equipment malfunctions, unplanned maintenance, human errors, and power outages.
What are the different hidden costs associated with downtime?
The hidden cost of unplanned downtime in manufacturing ranges from loss of customer trust to missed business opportunities. Other than that, it may also result in decreased employee efficiency and retention as well as increased repair expenses.
Can technology play a role in reducing downtime?
Yes, technology can play a huge role in reducing downtime. Advanced solutions like IoT sensors, downtime tracking software, and other automated systems quickly detect anomalies so you can take proactive measures to minimize overall downtime.
Conclusion
Downtime in manufacturing surely costs businesses hundreds of dollars. If you don’t want to become a victim of this issue often, you should get high-quality electronic components and industrial machinery parts. In addition, you should have backup equipment and sourcing partners to assist you whenever a malfunction occurs.
Wondering where to source hard-to-find electronic components and obsolete machinery parts? Enicstra is the ideal one-stop shop! We can help you source all your products from reliable manufacturers who meet quality standards while ensuring the fastest possible deliveries.
So, why wait? Contact us today to keep all your operations running smoothly!