Everybody knows that it’s all about production at companies. Everything has to add value. The customer appreciates this value and pays for it. All other company activities support creating value. It is therefore surprising that unplanned downtime is accepted so easily and is regarded “normal”. Many companies are not aware how often the production line stops. They get used to it and accept downtime of the production and assembly line. However, the standstill of a production line is disastrous for the organization. A simple calculation shows the impact of downtime. Just calculate what it costs a company to clean up the production line every time and how the reduced production influences the organization. If no value is added the whole organization standstill.
My opinion: downtime is not acceptable for production equipment. Machines can be arranged in such a way that effectiveness and efficiency go miles up. The ROI of these adjustments is easy to calculate. Within 1-2 years you may earn back the investment. An additional advantage is that the number of recalls is goes down and the quality goes up, since most errors are still created during downtime and rebooting the machine.
Calculation example:
A machine runs 10 hours a day and is actually productive 60% of the production time. It stands still 40% of the time, planned and unplanned. 20 Products per minute are produced on this machine, these products cost € 2. - each.
Turnover drops € 124,800.- a year. These are direct losses, the indirect losses are not counted, for example the cost of additional manpower, the cost of errors and recalls and other costs caused by downtime.
What we sometimes see is that the companies try to solve downtime with a second identical machine, or a backup machine. This is not only very expensive, but the machine has the same problems as the first one. Often, the components of the second machine are used in the first machine when there is a problem, which makes the use of the second machine impossible. It does not allow you to solve the original problem and the costs remain high at a line clearance. A lot of mistakes are still made during the downtime of the machine.
Downtime in production also creates buffer behavior. In order to prevent that, there are insufficient products to work with, the operator makes sure that there are stocks. This stock is stagnant capital and takes unnecessary space.
A good production and packaging machine has an efficiency rate of at least 90%. Only 10% (or less) downtime is permitted, mostly for regular maintenance. This is something you should ask your supplier of the packaging and assembly machines.
We are pleased to calculate the profit of a custom-made machine, with higher reliability than your current machine. Interested in a free calculation or questions about this article? Contact us at p.geurts@gte-engineering.nl or call 31 (0) 77-397 13 05.
