Cost of Unplanned Downtime in Manufacturing (And How to Avoid that)
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Every year, unplanned downtime in manufacturing cost manufacturers $50 billion. Apart from the safety and environmental mishap, it is one of the costliest events an enterprise must bear. Your bottom lines take a hit any time, and the production stops. But do you know what you are losing out on when your enterprise suddenly grinds to a halt?
According to the latest report, 8 in 10 companies recognize the need for a digital tool to eliminate unplanned downtimes and reduce them significantly. What makes the situation worst is – that unplanned downtime is unpredictable, it is impossible to prepare for every situation, and the manufacturing plant can go down for more than one reason.
Sometimes waiting for the delivery of new parts for the machine or the visit of an expert to fix the issue will take longer, and the machine will stay down for a long time. This will directly affect your bottom line’s productivity and production quality.
Moreover, unsellable products and the wastage of resources will contribute to more costs incurred. Not just that, unplanned downtimes can contribute to mishaps and accidents. During the unplanned downtime, the goal is to get the machine and process up and running again. The pressure to do it as fast as possible can be stressful and chaotic.
Thus, enterprises must be cautious and ready to reduce unplanned downtimes. They can also shift to planned downtimes to avoid any mishaps, accidents, and the overall cost of their manufacturing plant. This way, you can stop unpredictable situations and decrease the likelihood of any happenings.
What is Downtime in Manufacturing?
Downtime in manufacturing is precisely what it sounds like – a company’s manufacturing process stops abruptly. The downtime can be beneficial if planned, but unplanned downtime is the worst nightmare for any manufacturing plant.
Leaving your machines unchecked for an unprecedented time hurts your workforce’s efficiency, inventory planning, cycle, and lead time.
There can be many reasons to trigger a downtime, such as:
But soon, you will realize that these only scratch the surface. To know the root cause of the downtime, you need to search deeper and detect the potential sign of errors.
Put differently, you need a proactive approach to underline the main reasons and causes of your enterprise’s downtime. You need to:
Detect potential errors;
Increase visibility in asset performance;
Check your operator’s activity;
The health of your machines and equipment;
Providing digital resources to operators.
What is Unplanned Downtime in Manufacturing?
Unplanned downtime in manufacturing refers to unexpected stoppages or interruptions in the production process due to equipment or process failures, which can result in the temporary shutdown of a manufacturing operation. These disruptions can happen due to a variety of reasons, such as equipment breakdowns, power outages, supply chain disruptions, or human error. Unplanned downtime can lead to reduced productivity, missed production targets, lost revenue, increased costs for maintenance and repairs, and negative impacts on employee morale. Manufacturers often implement strategies to prevent unplanned downtime, such as proactive maintenance, real-time monitoring, and contingency planning, to minimize the negative effects of unexpected interruptions.
Unplanned downtime is a major headache for manufacturers, happening suddenly and causing unexpected shutdowns or equipment failures. Unfortunately, downtime can strike at any time, but it is especially likely to occur during periods of transition, like startups, shutdowns, and maintenance periods. Even during normal operations, manufacturers must remain vigilant against the possibility of unplanned downtime. It’s important for manufacturers to understand the true cost of unplanned downtime and take proactive steps to prevent it.
Planned vs Unplanned Downtime in Manufacturing
As stated earlier, downtimes are both – Planned and Unplanned.
Unplanned downtimes occur when an unexpected situation happens, like equipment failure, interruption in the supply chain, and more. Whereas, Planned downtimes are the ones that the enterprise schedules for managing the health of the equipment and resources. For example, preventive maintenance.
Here’s a tabular representation of the differences between Planned and Unplanned Downtime in Manufacturing.
Benefits of Planned Downtime in Manufacturing
Here are the top 3 benefits of Planned downtimes that an enterprise can attain:
Reduced risk of production interruption
With regular and scheduled maintenance of assets, you can reduce breakdowns and avoid interruptions in your production process. The breakdown of costly machines and equipment can be incredibly inconvenient for an enterprise – it may require a whole company to a standstill during maintenance.
Unplanned downtimes can lead to high operational costs. In October 2021, Facebook suffered an outage that lasted for 10 hours. The company lost over 73 million pounds in advertising revenue. This shows how an unplanned downtime can affect an enterprise.
But with planned downtime maintenance schedules, enterprises can avoid the risk of business disruptions. It includes all the maintenance tasks scheduled in advance so that the organization can plan and mitigate any damages.
Extended asset life spans
Extend the longevity of your assets and prevent them from any breakdowns and failures with planned downtimes. Regular troubleshooting and maintenance of your machines leave little to no room for repair and replacement of components. The companies can rely on the same machines for a more extended period.
This leads to significantly reducing the cost of regularly replacing the components of your machines and equipment, reducing the time for the assets to arrive, and getting a better ROI on purchased assets.
With planned downtimes, schedule the maintenance and repair of your machines before their breakdown and enhance their life span.
Organized Workforce Management
Increase the efficiency of your workforce and assets with planned downtimes. A company needs to imbibe a proactive approach so that technicians can respond quickly to unpredictable failures and disturbances.
With an established planned downtime strategy, your workforce will have more precise and organized schedules. However, it is impossible to predict or prevent all breakdowns, but still, they will become less frequent.
Thus, with organized and planned downtimes, engineers can focus on upcoming tasks without fearing being pulled for an impromptu job at any time.
To understand the top causes of unplanned downtime times in manufacturing, an enterprise needs to other data and then drive solutions from it. This also gives them a better understanding of the downtime. However, just obtaining the data does not mean an organization will know what to do about it.
A recent study by Accenture cites that 60% of organizations do not know how to deal with this data. It occurs as a significant challenge to them. Thus, it is vital to understand the reasons for collecting these enormous databases and to use them to improve the conditions of your manufacturing plants.
Here is a list of some bad attributes of manufacturing plants that makes it inefficient to run manufacturing processes with ease:
Paying more for maintenance than needed;
Lacking real-time visibility of remote operations;
Relying on manual and paper-based data;
Having numerous information silos where primary data is lost;
Having difficulty in making knowledge-based sound decisions;
Unavailability of spare parts when needed;
Productivity loss for technicians and an increase in their wrench time;
Experiencing poor equipment reliability in day-to-day operations;
Having large work order backlogs;
Giving more over time than necessary to conduct a task.
These undesirable traits contribute to unplanned downtimes and costs. Your frontline workers need to cover more ground to ensure costly breakdowns and shutdowns are held in a limited time to increase for activity and profitability of an enterprise.
A recent report states, “a typical plant maintenance department operates at 18% to 70% Wrench time rate.” So most of these enterprises succeed in having 20% to 30% efficiency approximately. Thus, a manufacturing plant enjoying 74% wrench time might spend dollar 100 million in a year.
The solution to this problem is well-running and efficient planned and scheduled downtimes that can identify and rectify equipment problems as soon as possible without failure.
The Cost of Unplanned Downtime in Manufacturing
According to a report, 80% of companies cannot calculate downtime costs. However, the cost incurred in every downtime is not the same. Why? Because only unplanned downtimes occur unexpectedly.
Unplanned downtimes cost global industries millions of dollars in lost revenue. There can be multiple reasons for these causes. For example, weather delays, airline companies, or cybercrimes can lead to infrastructure breakdowns. Unfortunately, the susceptibility to failure persists, particularly in manufacturing factories.
Recent research states that 90% of machines in manufacturing plants globally are not network connected and are approximately 15 years old. The average manufacturer confronts almost 800 hours of equipment downtime per year. The downtime cost for these machines and equipment is costly.
These shutdowns, scheduled or not, can eat up to one to 10% of your production time. Unfortunately, you cannot recover these unproductive hours, and costs can be recovered, which include:
Labor Cost includes direct labor costs like in-house maintenance, overtime, and any outside contractors if necessary.
Production costs include wasted production materials, reduced production capacity, time spent on testing and quality control, and restarting a production process.
Finance cost includes lost revenues and tighter profit margins.
Overhead costs are incurred on idle operators, back office laborers, repaired and replaced materials, shipping charges, and other utilities.
So, what’s the solution?
Some automotive companies within the manufacturing industry have already started using industry 4.0 to develop platforms that helped them reduce downtime, as every minute counts. Industry 4.0 and automated AR-powered manufacturing processes refer to industrial operations where all equipment, devices, and computers are connected. This creates an environment rich in data analysis, self-correcting step-by-step procedures, and many other possibilities.
You might consider it a far-off future for manufacturers, but the reality is that industry 4.0 is happening today. Many manufacturers have already adopted concrete examples to move forward, like AR visual remote support tools and platforms to digitize their business and bring automation to life.
Tips to Avoiding Unplanned Downtime in Manufacturing
There can be numerous ways and strategies to process your downtimes, and you can try to reduce them. Here are some of the ways for you to avoid downtime:
Before leaping to reduce your downtime, tracking your downtimes and knowing their origin is critical. Tracking your downtime lets you know the reason behind your slow processes and the metrics to reach an optimal solution to overcome them.
Your frontline workers cab uses the data collected during the downtime to reduce it. Consider collecting these data for each downtime: duration, reason or cause, process or area, frontline workers on shift, Supervisor’s comment, and other Environmental occurrences.
Ensure that all this data is collected through an automated system, as it will ensure the reliability of the data as the most consistent data will help you reduce downtimes.
2. Monitor Your Production
Having a system to monitor your production can be a huge relief to your frontline workers. It will also help you to reduce downtime and the time to monitor the situation manually.
Visible process trends to the admin or supervisor show how the process runs and whether variables stay consistent. It will also alarm the admin in case of unprecedented or upsetting conditions arise.
Through smart admin dashboards, they can react to these chains of events more quickly and potentially prevent downtime from happening.
3. Create A Predictive Maintenance Schedule
You can plan your downtimes and make the most of the lost unplanned downtimes through predictive maintenance schedules. If there is a part replacement or need for expert personnel on-site to perform the task, you can arrange it beforehand and save time and money.
Regular maintenance schedules and troubleshooting of complex issues when the process is running can increase the lifetime of the machines. Once the admin has created a schedule, they can create digital checklists and ensure all tasks get accomplished within the timeline.
Keeping a record of the predictive maintenance schedule and analyzing it in correlation with your downtime will help you drive necessary maintenance and reduce downtime.
4. Provide Expert Operators Support to Frontline Workers
Unplanned downtimes are inevitable. Thus, as an enterprise, you should give priority to reducing the duration of downtime. You should invest in digital tools, platforms, and troubleshooting guides that help the operators to resolve an issue as soon as it arises.
To get the process running, the operator needs to know what went down in the first place. Providing the operator with all the resources is your first step to finding the root cause and troubleshooting the issue quickly.
DMAIC analysis is a fundamental LEAN manufacturing tool used to define, measure, analyze, improve, and control manufacturing issues.
Define: Brainstorm a list of potential reasons for the downtime and track the events.
Measure: Measure and assign the reason for the downtime. It will include the downtime event’s details like who, what, when, where, and why.
Analyze: Use Pareto Charts to analyze the downtime events and learn the most significant causes.
Improve: Determine the best ways to reduce the effect of downtime on your business. A pay-off matrix can help point out the most impactful and cost-friendly solutions.
Control: Use smart workflows, step-by-step SOPs, and digital manuals to have control of the situation.
Avoid Unplanned Downtimes in Manufacturing with Plutomen
Throughout the article, the one thing that has remained common is that unplanned downtime is a leading source of low revenue and decreased productivity. Remember, it is one of the major headaches for them.
However, while unplanned downtime is expected in the industry, the advancement of technology has proven it can be a rare event too. Many companies even aim for zero unplanned downtime as a critical operational goal for their enterprise.
Your enterprise requires proactive maintenance and data-driven decision-making to obtain zero unplanned downtime. Of course, it is impossible to predict every possible issue, but with the help of technology, you can significantly reduce these unknown factors of unplanned downtime.
However, installing sensors to detect an alert for a potential failure is a barrier for many companies. Why? Because these companies are already busy and need help implementing their daily workflows. Thus, they require a solution that is easy to implement and reasonable.
AR remote assistance is a technology that leverages AR and enables users to merge real-time video assistance to all their devices. They offer both sides of the screen an opportunity to engage in a one-on-one conversation to troubleshoot an issue.
Plutomen is a platform that helps your frontline workers be in the same space with your experts and find solutions to their issues.
Here are some of how Plutomen can help you achieve zero unplanned downtime:
Get live demonstrations, remote support, and timely access to expert guidance on live HD video calls.;
Create 3D AR Annotations on live screens to give detailed work guidelines to your frontline workers;
Freeze frames to give a better view to the expert about the issue and receive a better solution;
Access a knowledge repository of your past sessions to eliminate any back and forth while troubleshooting.
Get digitized guides, manuals, and step-by-step work instructions
On-boarding and training of employees to bridge the skill gap
Upskilling and reskilling of the workforce through 3D AR annotations and saving money on costly equipment
Providing a self-assistance platform to learn, grow, and upskill the workforce.
Plutomen makes it possible for skilled technicians to be instantly available to the workforce, thereby reducing truck rolls and increasing on-site accessibility.
It also makes it easier for plant managers, technicians, and engineers to constantly review the performance and ensure optimal functioning occurs at every stage. With Plutomen as your Remote Visual Assistance partner, you can conduct consistent inspections of hardware and software, performance reviews, and training for equipment operators.
Failure in any of these areas will lead to more unplanned downtimes. Thus, the manufacturing industry must conduct regular inspections and proactively identify and solve problems and be way ahead of their competition.
It is a very simple equation for manufacturing industries to have your equipment or enterprise not working. That’s why planned or unplanned downtime results in one of the most significant expenses incurred by any manufacturing process.
Thus, you must see your money burn when your production line stops. These interruptions cause costly enterprise repairs, missing out on your targets, resulting in overtime and a dent in your reputation—even a few hours of inactivity and a halt in production line cause you billions of dollars.
Manufacturers must be more vigilant about the common causes of complete shutdowns and downtime. Pay attention to the maintenance of your machines or postpone your equipment upgrades. However, not all problems are indeed directly related to your machinery. Some are related to insufficient training of your employees and disruptions that can be traced to managers who failed to keep detailed records of past problems.
Thus, don’t let downtime ruin your productivity, and adopt Plutomen to stay on top of your manufacturing operations.
Chirag brings with him 15+ Years of experience in Digital Transformation, and IT Leadership. At Plutomen, he holds deep experience in business with a track record of customer-centric approaches helping them build business transformation.
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