The word “downtime” has negative connotations in the manufacturing industry, since any time not spent producing goods is lost revenue. However, downtime can occur for many different reasons, not all of them unexpected. Here, we discuss how optimizing your human resources — your employees — can help minimize downtime and mitigate its effects.
What Is Manufacturing Downtime?
In manufacturing, downtime refers to any period of time in which production has stopped, either facility-wide or on one piece of equipment. Uptime is any time production is occurring as usual.
Downtime isn’t necessarily a bad thing — production can be paused for routine equipment maintenance, shift changes, training days or non-business hours. These examples are considered planned downtime.
Unplanned downtime, however, can incur steep costs and unpleasant consequences. Equipment failures, accidents, power outages or personnel shortages can result in downtime that is not factored into the normal production schedule, and may lead to lost revenue, late shipments or unhappy customers.
Potential Causes of Unplanned Downtime
Unplanned downtime is unpredictable and typically expensive — or at least, results in costs that are not otherwise factored into overhead projections. This type of downtime occurs unexpectedly, without regard for shift schedules, production timelines, budgets or market conditions.
Equipment failure accounts for 80% of all unplanned downtime in manufacturing. Other causes of unplanned downtime include:
- Poor equipment maintenance
- Outdated processes
- Disruptions or failures of process
- Human error
- Water and oil leaks
- Workplace accidents
- Poor planning
- Lack of communication
- Environmental factors (lightning, floods, extreme weather, etc.)
- Supply shortages
- Inventory issues
- Unoptimized changeover and setup processes
- Labor shortages
What Is Planned Manufacturing Downtime?
It’s necessary to halt production for events such as shift changes, tool changeovers, routine maintenance and equipment inspections. Some amount of downtime is factored into all manufacturing schedules so that operators can plan ahead and minimize disruptions to the overall production flow.
Downtime can be planned according to historical plant data, predetermined maintenance schedules, staff availability and periods of traditionally high order volume. Knowing when equipment will be down helps customer relationship managers set buyers’ expectations for delivery — for example, if the customer places an order before a planned break, the plant’s CRM team can communicate that the lead time may be a little longer than usual.
It may take some experimenting to determine the best cadence for planned downtime, but by documenting and continually improving upon processes, production managers can optimize the schedule and standardize the downtime process. Plants can even use machine learning applications to generate “ideal” downtime schedules based on predictive modeling.
What are the Costs of Downtime in Manufacturing?
According to the International Society of Automation, the average manufacturing plant loses 5%–20% of its annual productivity to unplanned downtime.
Any unplanned downtime can have significant negative consequences downstream, including:
- Lost revenue or a reduction in profits
- Lower output
- Longer lead times
- Frustrated clients or customers
- Increased rate of workplace accidents during startup/shutdowns
Regarding this last point, when operators are confronted with unfamiliar workplace scenarios — such as equipment failure or a safety incident — they are more likely to be injured because of the break in process. While only 5% of uptime is dedicated to starting and shutting down equipment, this is when 40% of workplace accidents occur.
According to research by information technology company Arimo (as cited by Forbes), the average manufacturing plant experiences 15 hours of downtime per week. B2B research company Aberdeen estimates that the average business loses $260,000 per hour of downtime — that’s over $2 million per year! The number is likely higher, however, due to costs incurred by workplace accidents, equipment replacements and more. (One lawsuit or a single piece of new equipment can cost millions of dollars alone.)
How to Calculate the Costs of Downtime
The cost of unplanned downtime can be calculated two ways: accounting for lost revenue or lost time.
The lost time formula can be applied to assets such as individual machines, machine parts, shifts, departments or entire manufacturing plants.
Lost time formula:
Unplanned Downtime = (Time Asset is Down / Total Time) x 100
Lost revenue is highly dependent upon the organization’s size, the number of employees affected, the duration of the downtime and the complexity of the cause.
Lost cost formula:
Cost of Unplanned Downtime = Average Hourly Wage x (Time Asset is Down/Total Time) X Number of Employees Affected
Depending on the individual variables, the result could be a few hundred to a few million dollars. Associated costs such as litigation, facility repairs or equipment replacements can increase the total significantly.
How to Reduce Manufacturing Downtime
Some amount of downtime is unavoidable. Not only is downtime necessary for routine maintenance and repairs, but it’s safe to assume that some kind of unexpected downtime will occur in any given year. That said, manufacturing companies can implement processes and training that will minimize the chances of unplanned (and costly) downtime.
Ensure all operators are properly trained: The production floor is no place for guesswork, nor is it appropriate (or safe) for everyone to have their own way of doing things. Implement training programs that establish the “one best way” of doing any given task to ensure that it becomes standard practice.
Conduct process audits: Break your existing processes down into their most fundamental steps to uncover potential safety issues or bottlenecks. This exercise is helpful both to identify the root cause of specific unplanned events and to take preventative action against future occurrences. Once a process is broken down, build it back up into its leanest possible iteration.
Synchronize maintenance schedules: If two pieces of equipment are on different maintenance schedules, it results in up to twice the downtime. Try to synchronize planned downtime as much as possible, or else schedule maintenance so that production can continue on available equipment.
Use and improve upon work standards: Workplace standards should extend beyond the production floor — they also should be established at the management and leadership levels. Even processes for resolving employee conflicts and addressing communication breakdowns can be standardized using people-first methodology.
Provide the right resources: As part of standardization, make sure all processes are documented and available to all operators and frontline supervisors. Resources can include written process manuals, kanban boards and other visuals, process simulations and just-in-time trainings.
Involve everyone in process improvement: The best people to inform process improvements are the people who actually do the job. Involve all operators and supervisors in breaking down processes, experimenting with incremental improvements and implementing changes that create a leaner, more efficient operation.
Using Machine Learning and Predictive Analytics to Prevent Downtime
Machine learning applications are becoming increasingly common across nearly every industry, including manufacturing. While predictive analytics can be invaluable in standardizing and optimizing processes, they are no replacement for an organization-wide culture of continuous improvement. Alongside tools like IoT-connected sensors that can detect potential equipment failures, plants need to implement training programs that strengthen operators’ skills of discernment and risk analysis.
Software tools can absolutely help operators avoid downtime on the job. Training programs with step-by-step instructions, equipment lists, visual aids and more help operators simultaneously upskill while maintaining the flow of production. While IoT sensors and predictive analytics can monitor for downtime risks in the background, there is no replacement for comprehensive training that emphasizes resourcefulness, human discretion and, ultimately, a mindset of perpetual improvement.
Basic Stability is Basic to Lean Manufacturing Success
Manufacturing Downtime FAQs
Q: What is uptime and downtime in manufacturing?
A: In manufacturing, uptime is any time during which production is occurring. Downtime is any period of time during which production has halted, whether due to equipment failure, plant shutdowns, machine maintenance or other planned or unplanned factors.
Q: How much does downtime cost a company?
A: Research estimates that every hour of downtime costs the average company $260,000 in lost revenue, repairs and other associated costs. Of course, the real cost of downtime is dependent upon the duration, the root cause, the size of the company, the number of employees affected and other costs incurred to resume production.