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Costs of Downtime in the Manufacturing Industry


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Lost production, unfulfilled customer orders and overtime are just a few of the tangible costs associated with equipment downtime. There are also intangible costs that are harder to quantify. We've assembled an infographic that illustrates some of the tangible and intangible costs associated with downtime and how this impacts manufacturers. Downtime may be costing your company big bucks (more than you think). Learn how implementing a CMMS can help you track your true maintenance costs and provide data that can reduce equipment downtime.

Published in: Engineering

Costs of Downtime in the Manufacturing Industry

  1. 1. COSTS OF DOWNTIME IN THE MANUFACTURING | NDUSTIiY/ DOWNTIME COSTS CAN BE OIVIOEO INTO 2 MAJOR CLASSES: Tangible and Intangible. Tangible costs are those which are relatively easy to quantify. Intangible costs are difficult to put a dollar figure on but may be even more significant than tangible costs. Tangible Costs: Lost Capacity. Lost Production. Direct Labor, Inventory Product Loss Intangible Costs: Responsiveness. Stress. Innovation Includes a vast array of wasted business support costs and lost business opportunity costs because resources were needed to rectify a downtime incident that probably did not need to happen. j Average total annual downtime for industry ’H°U’5l Average monthly downtime for industry Downtime in the Automotive lndustry- 0 . e 0 I S‘ x in 2006. auto industry manufacturing executives showed 6o“4 693°C o‘°‘O M ¢&° be‘? 0&9} Q39?’ stopped production costs avg. $22,000 per minute. V90 go‘ Q-85‘ 8&0‘) Q° $1.3 Million per hour of downtime eQ2(b O6° 296 ‘xe‘° the m- Os. “ .03‘ “ed 53% of executives all agreed - reduction of downtime ‘<0 , go“ 36“ through predictive and preventative maintenance. ° ‘N SALES BUTTLENECK START-UPPEUPLE COST CATEGORIES cgN]'Ro| _ ENGINEERING LLP/ LPM PRODUCT MANAGEMENT TIME LOSS REDUCED RATE PART/ SHIPPING SCRAP TOOLING BAND'AID UEM INDUSTRIAL FACILITIES THAT ESTIMATE TDC 20% Almost every factory loses at least 5% of its productive capacity from downtime, and many ' lose up to 20%. Of the 20% that can estimate their downtime usually underestimate TDC by 200% — 300% - Backlog of work orders 4 months over due - Only focused on emergency repairs - 20% Equipment downtime - Labor hours & parts uncategorized and difficult to track FIX. Improve the Preventative Maintenance Program - Automated key metrics from engineering, production, inventory control, and maintenance to a central dashboard. - Dashboard gave management up—to—the minute view of o Downtime by production line 0 Work order aging 0 Work order throughput 0 Open work orders by type RESULTS AFTER IMPLEMENTING CMMS BACKLOGGED WORK ORDERS COMPLETE 0 /0 Within 60 Days I Within 30 Days 27% 40% I 20% 0% BEFORE AFTER Uptime I Downtime SOURCES: PRESENTED BY: httpr. /,. ’www. anexio. com/ blog/ the-true-cost~of-downtime-in-the- manufacturing Industryl httpz. //packagingindustryfraingroup. com»'2OI I/ l0/20/caIculating-downtimes costs/ ’ httpgu‘, /www. isa. org, /Content/ ContentGroups/ InTech2/Departments, /Channel TaIlc«’20069// Vhen True-7Cost of Downtime Is Unknown, Bad Decisions Ensuehtm http: /,»'news. thomasnet. com. /companystory/ Downtime-Costs-Auto— | ndustry-22k-Minute-Survey-4810l7