What is Manufacturing Downtime?

Any disruption in operational flow can lead to significant financial losses, highlighting the critical issue of downtime—a period when a system is unavailable and production stops. Downtime is the opposite of uptime, which is when machinery functions correctly. Understanding downtime is important for maintaining efficiency, revenue, and a strong operational environment. Manufacturing downtime, whether planned or unplanned, costs manufacturers billions of dollars annually. Deloitte reports that even before COVID-19, unplanned downtime was easily responsible for about $50 billion in losses each year. On average, manufacturers face around 800 hours of equipment downtime annually, which is over 15 hours each week.

Post-COVID, manufacturers are realizing the importance of reducing production line failures and keeping operations running smoothly. With rising inflation and higher production capacities, downtime costs have increased significantly. For large-scale manufacturers, production downtime can now exceed $2 million.

To effectively address downtime, it’s important to differentiate between planned and unplanned events. By understanding the common causes and effects of downtime and implementing strategies to reduce it, manufacturers can build a more resilient and productive future.

What is Manufacturing Downtime?

Manufacturing downtime refers to any period when a facility stops producing goods. This can be planned, like scheduled maintenance for equipment, or unplanned, due to equipment breakdowns or other issues. It can also happen when there aren’t enough supplies or workers available.

Downtime hurts profits. When production slows down or stops entirely, there’s no income being generated. It can also affect relationships with other businesses, as deliveries and receiving materials get disrupted. Safety is another concern. Studies show that accidents are much more likely to happen during periods of starting up or shutting down production, making it even more important to minimize downtime.

Common Causes of Manufacturing Downtime

Manufacturing downtime, especially unplanned downtime, can significantly disrupt production. Several factors can contribute to this downtime, impacting the overall flow of operations.

1. Poor Planning

   In the rush of daily activities, inadequate planning can lead to production issues. This could involve running out of raw materials, not having enough staff on hand, or lacking backup plans for unexpected situations. All of these can cause disruptions.

2. Poor Communication

   Smooth operations depend on clear communication. If important information isn’t shared effectively, like changes to schedules, updates on equipment status, or new safety procedures, it can lead to confusion and ultimately downtime.

3. Human Error

   Even with advanced technology, human mistakes can still be a cause of downtime. This could include setting up a machine incorrectly, making an error while operating it, or not following proper maintenance procedures.

4. Poor Maintenance Planning/Scheduling

   Just like a car needing regular servicing, manufacturing equipment requires preventive maintenance to keep it running smoothly. However, neglecting proper planning and scheduling of maintenance tasks can lead to unforeseen breakdowns. Imagine a scenario where critical maintenance gets delayed or rushed due to poor planning. This can lead to missed opportunities to identify and address minor issues before they snowball into major failures, ultimately causing unplanned downtime and lost production.

5. Equipment Failures

   Even with the best maintenance practices, machinery experiences wear and tear over time. This natural process can eventually lead to unexpected breakdowns. The key to minimizing equipment failure downtime lies in timely repairs and proactive monitoring. Advanced monitoring systems can help detect early signs of trouble, allowing for repairs to be scheduled before a critical component fails and brings the entire production line to a halt. Similarly, addressing minor issues promptly can prevent them from escalating into major malfunctions that require extensive repairs and longer downtime periods.

6. External Factors

   External influences can also lead to manufacturing downtime. These include disruptions in the supply chain, unexpected power outages, natural disasters, and even cybersecurity attacks. All of these factors can cause production to stop suddenly.

The Difference Between Planned and Unplanned Downtime in Manufacturing

Manufacturing downtime can be separated into 2 main types: planned and unplanned.

• Planned Downtime: This refers to periods where production is intentionally stopped. It’s a strategic decision that allows for activities like scheduled maintenance, equipment upgrades, or adjustments to improve efficiency. Manufacturers often schedule downtime during product changeovers to minimize disruption. Planned downtime ultimately helps optimize performance, prevent unexpected shutdowns, and keep workflows running smoothly.
• Unplanned Downtime: Unlike planned downtime, unplanned downtime arrives unexpectedly. It can be caused by various issues like equipment failures, jams, or other operational problems. These disruptions can lead to financial losses, delays for customers, and stress on production teams.

The key to a smooth and efficient manufacturing process lies in finding a balance. While planned downtime is necessary for improvement, it’s also important to take steps that minimize the impact of unplanned disruptions.

How Does Downtime Affect Manufacturers?

Manufacturing downtime isn’t just a temporary halt in production. Its effects spread throughout the entire operation,
impacting not just output but finances, safety, and overall efficiency. Let’s explore these consequences in more detail:

1. Customer Disappointment: Downtime can lead to delayed deliveries, missed deadlines, and ultimately, unhappy customers. This can damage long-term relationships and hurt your reputation.
2. Lost Revenue: Every minute of downtime represents potential sales lost. Unfilled orders, delayed shipments, and disrupted contracts all contribute to financial losses.
3. Safety Concerns: In some industries, stopping production can create unsafe situations. Rushing repairs or ignoring equipment malfunctions can endanger workers and compromise the facility itself.
4. Operational Inefficiencies: Downtime disrupts the normal flow of operations. The constant stopping and starting associated with unplanned downtime leads to inefficient use of resources, driving up overall costs.

Calculating the Cost of Manufacturing Downtime

While unplanned downtime can be disruptive, its effects extend beyond the obvious. Calculating the cost of downtime provides valuable insights that manufacturers can use to improve their operations. This analysis goes beyond simply measuring lost production time. It sheds light on areas like customer satisfaction, workplace safety, and overall efficiency. This information empowers manufacturers to make informed decisions and develop strategies to minimize the impact of downtime. We’ll now delve into the specific steps involved in calculating machine downtime costs.

1. Measuring Downtime and Taking a Closer Look at the Role of MTTR

   Accurately measuring downtime is crucial for understanding its financial impact on your operations. This involves carefully tracking the duration of unexpected equipment failures. A key metric in this process is Mean Time To Repair (MTTR). MTTR reflects the average amount of time needed to get a system back up and running after a malfunction. The quicker your MTTR, the faster your recovery and the less disruption to production. By implementing effective maintenance strategies and taking a proactive approach to addressing equipment issues, you can easily reduce both Mean Time to Repair (MTTR) and the overall financial burden associated with downtime.

2. Direct Costs

   Direct costs are the most straightforward to calculate. These are the financial losses that occur during the downtime itself. This includes the value of lost production – the units you weren’t able to make because the machine was down. Additionally, there might be costs associated with emergency repairs needed to get the machine back online. These could be parts, labor, or any outside services brought in to address the issue. Finally, if downtime forces your team to work overtime to catch up on production, these overtime wages also contribute to the direct cost.

3. Indirect Costs

   Indirect costs, however, are less obvious but no less important. These costs represent the ripple effects of downtime that extend beyond the immediate stoppage. Examples include a decline in employee morale due to disruptions, potential damage to customer relationships if deadlines are missed, and even the long-term impact on your brand’s reputation if downtime becomes a recurring issue. While indirect costs might not have a clear dollar value attached to them, understanding their potential impact is crucial to getting a complete picture of the true financial burden of machine downtime.

4. Calculating the Overall Financial Impact

   There are two main ways to measure the financial impact of machine downtime. The first is a simple calculation: multiply the hourly operating cost of the machine by the total amount of time it’s down. This gives you a basic idea of the direct financial losses.

   Another method is Overall Equipment Effectiveness (OEE). This approach looks at how efficiently your operation uses its resources (machines, time, and materials) compared to how well it could perform during planned production time. It essentially tells you what percentage of your manufacturing time is actually spent on productive activities.

   For a more complete picture, you’ll also need to consider indirect costs. This might involve looking at customer satisfaction surveys, how people perceive your brand, and the potential long-term effects on your market share.

Steps to Limit Manufacturing Downtime

Here are some practical steps to help manufacturers minimize unplanned downtime and keep production running smoothly:

1. Monitor Proactively

   Invest in real-time monitoring systems that can provide early warnings of potential problems. This allows for quicker responses and helps prevent issues from causing downtime.

2. Train Your Team

   A well-trained workforce is your first line of defense. Make sure your operators and maintenance teams have the skills they need to operate machinery safely and identify potential equipment problems early on.

3. Plan Preventive Maintenance

   Regular maintenance is important. Sticking to a well-defined preventive maintenance schedule can help address small issues before they become bigger problems and cause production to stop. The U.S. Department of Energy reports that preventive maintenance can significantly reduce costs and downtime.

4. Communicate Effectively

   Clear communication channels between departments are essential. This ensures everyone can make quick decisions if unexpected situations arise.

5. Consider Backups and Redundancy

   Having backup systems in place for critical operations and using redundancy measures can help minimize the impact of downtime if equipment fails.

6. Move Towards Predictive Maintenance

   When possible, consider transitioning to a predictive maintenance approach. This uses data analysis to anticipate equipment failures and allows for interventions before they happen.

How NEXGEN Helps in Managing Equipment Downtime

Minimizing unexpected downtime is essential for any manufacturing firm. By implementing a comprehensive CMMS like NEXGEN, you can transform preventative maintenance from a complex task to a streamlined process.

NEXGEN empowers you to schedule maintenance, receive automated reminders, and manage your inventory – all in one user-friendly platform. This proactive approach helps you anticipate equipment needs before they become emergencies, keeping your production lines running smoothly and avoiding costly disruptions.

Take control of your maintenance strategy with NEXGEN CMMS and experience the peace of mind that comes with a well-maintained and efficient manufacturing environment.

Want to try NEXGEN’s CMMS today?

Frequently Asked Questions

1. What is Downtime in Manufacturing?

   Downtime refers to any period when a manufacturing process is not running. There are two main types: planned and unplanned.

2. What is Planned Downtime?

   Planned downtime is when a production schedule intentionally stops a process. This is necessary for regular maintenance tasks like inspections, cleaning, and replacing parts on machinery.

3. What is Unplanned Downtime?

   Unplanned downtime occurs when a machine or process unexpectedly stops. This can happen due to equipment failure, lack of materials, power outages, or other unforeseen events. Unplanned downtime is disruptive and a major target for losses in manufacturing.

4. What is Production Downtime?

   In manufacturing, production downtime is any period when a machine or workstation isn’t actively producing goods. This can delay production and cost the company money. All production stoppages that cause lost revenue contribute to the total downtime a factory experiences.

5. What causes the most downtime in manufacturing?

   Process or equipment failures are the biggest culprits, contributing to roughly 80% of unplanned downtime in manufacturing. These surprise breakdowns significantly disrupt production.

6. How does downtime affect production?

   Manufacturing facilities can experience a 5-20% decrease in productivity annually due to downtime. Safety concerns also arise during downtime as workers may be unfamiliar with non-production environments.

7. What is equipment downtime?

   Equipment downtime refers specifically to a machine or piece of equipment being offline. This can be due to breakdowns or planned maintenance activities like repairs or replacements.

8. How can you avoid equipment downtime?

   While some downtime is inevitable, predictive maintenance software can help reduce unplanned equipment downtime by intelligently anticipating and scheduling maintenance needs. Regular servicing of machinery based on these predictions and established procedures also helps minimize downtime.