Equipment downtime is a major pain point for just about every industry you can think of. It doesn't matter if you're in textiles, pharmaceuticals, metal, or something else entirely - keeping machines running is always a top priority.
While everyone knows that there is an almost immediate cost associated with instances of unplanned downtime, there's also long-term damage that is absolutely worth a closer look.
The Real Costs of Machine Downtime: An Overview
When it comes to understanding the true financial impact of machine downtime, it's important to separate things into two categories: the literal cost and the larger, often hidden one.
Calculating the literal cost is easy - you simply take the total minute soft downtime you experienced, multiply it by the cost per minute, and you get your number. According to one recent study, for larger businesses the cost of unplanned downtime averages out to about $9,000 per minute.
The larger cost is influenced by those factors that tend to remain a problem even after the machine itself has come back online. When that equipment is running and producing, the literal cost stops.
The damage to your company's reputation with regard to reliability and quality, however, can't be fixed by just ordering a few replacement parts. That will take time and even more effort to resolve. If the problems persist, you may not ever get back to where you were.
Frequent problems also have a legitimate productivity cost attached to them. Every minute that an employee is spending trying to fix a recurring issue is a minute they're not actually making money for your business.
Things may get to the point where those employees start to look elsewhere for work, increasing your turnover rate exponentially. When you consider that it always costs more money to replace an employee than it does to just retain one of your existing ones, it's easy to see how there are financial damages associated with this, too.
In the end, all this also highlights the importance of tracking machine downtime across your own organization. Obviously, if you know you manufactured X fewer parts per hour than you should have, you can calculate the cost of lost productivity (or at least, lost potential sales) fairly quickly. You may even come up with a dollar value that you're comfortable with. A "cost of doing business," if you will.
But machine downtime tracking can help you understand the bigger picture - the one that contextualizes the damage you're incurring with regard to how your customers are impacted. The damage to your reputation. Even the employee turnover that might be taking place. Those might not have an immediate dollar value attached to them, but rest assured they will in the long run.
If you'd like to find out more information about the real cost of machine downtime beyond the initial hit to your budget, or if you'd like to begin equipment downtime tracking with your own business but aren't sure where to begin, please don't delay - contact Thrive today.