Maintaining machinery is a critical part of any successful business. However, ensuring that machines are running at optimal efficiency can be challenging due to the availability of spare parts. Without the right parts available at the right time, downtime events can occur, leading to decreased production and increased costs. In this article, we will discuss the cost of downtime caused by lack of spare part availability and why having clean and enriched product data can help reduce these issues.
The Cost of Downtime
Downtime in manufacturing can have a significant impact on a company’s bottom line, leading to decreased productivity and revenue loss. It is estimated that almost every factory loses at least 5% of productivity, with some experiencing as much as a 20% loss, due to downtime. A manufacturer’s bottom line can include up to 800 hours of downtime, which translates into millions of dollars in revenue loss. Minimising downtime in manufacturing is just as pivotal as maximising quality and output to maintain contribution margins.
The cost of downtime goes beyond just lost production and revenue. There are also indirect costs to consider, such as the cost of overtime, expedited shipping, and lost customer confidence. When machines are down, it can result in lost customer orders and opportunities, which can impact the company’s reputation.
Additionally, the cost of repairing or replacing damaged machinery can also be significant, further exacerbating the impact of downtime on the bottom line.
Calculating The Cost Of Downtime
The cost of downtime can be calculated by adding up all the direct and indirect costs associated with a machine or equipment failure. Direct costs include expenses such as labour costs for repairs, costs for replacement parts, and any lost revenue due to decreased production. Indirect costs include expenses such as overtime pay for workers, the cost of repairing or replacing damaged products, and the cost of rescheduling production.
To calculate the cost of downtime, the following formula can be used:
Cost of Downtime = (Average Hourly Rate of Machine + Hourly Labor Cost + Cost of Lost Production) x (Number of Hours of Downtime)
- Average Hourly Rate of Machine is the average hourly cost of running the machine, including maintenance and repair costs
- Hourly Labor Cost is the cost of the workers required to repair the machine
- Cost of Lost Production is the revenue lost due to decreased production
- Number of Hours of Downtime is the amount of time the machine was down and unable to produce
It is important to note that this formula is just a starting point and that the true cost of downtime can vary greatly depending on the specific circumstances and the type of business. To get an accurate picture of the cost of downtime, it is recommended to track and analyse downtime events over time to determine the specific cost factors for each event.
Lack of Spare Parts Availability
Lack of spare parts availability is a common cause of downtime in maintenance management. When the right parts are not available at the right time, it can result in extended downtime, decreased productivity, and increased costs. The availability of spare parts is often affected by a number of factors, including supply chain disruptions, lead times, and inaccurate inventory levels. These factors can cause significant delays in the maintenance process and result in decreased uptime for the machines in your fleet.
Measuring the Effect of Spare Parts Availability on Uptime
The effect that product spare part availability has on the uptime of machines in maintenance management can be measured by tracking and analysing the number of downtime events that occur due to lack of spare parts. By comparing this number to the total number of maintenance events that have occurred over the same period of time, it is possible to calculate the percentage of downtime events that were caused by lack of spare parts. This percentage can then be used to measure the effect that spare part availability has on the overall uptime of the machines in your fleet.
The Benefits of Clean and Enriched Product Data
Having access to clean and enriched product data can help to reduce the cost of downtime caused by lack of spare parts. By ensuring that the right parts are ordered and available on-time, it can help to reduce the number of downtime events caused by lack of spare parts, resulting in increased uptime.
Additionally, clean and enriched product data can help to reduce the cost of maintaining machines by reducing the amount of time and resources spent on ordering and tracking parts.
It can also help to improve the accuracy of parts orders and reduce the risk of ordering the wrong parts, which can save money and time.
Finally, it can help to improve the overall efficiency of the maintenance process by ensuring that the right parts are available at the right time.