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How to Reduce Downtime Costs

Dec. 5, 2023
Tips for cutting these costs by as much as 80%

What if someone told you that downtime should not be used as a key performance indicator (KPI)? Would you agree with that person or not?

Maintenance is typically approached as if this person is wrong. As a consequence, total uptime or downtime has only a coincidental relationship with total revenue or profitability of the plant/facility. To understand this, understand why a manufacturing plant exists. 

It exists to meet financial targets, such as return on investment and positive cash flow. The typical plant contains a variety of machines, work cells, and production lines. Not all of these produce the same revenue or profit, and not all of these are responsible for the same volume. In some cases, a specific machine, work cell, or production line is dedicated to a particular customer or niche. That dedication can be due to sheer profitability or to some other factor, such as this customer provides a great deal of other business.

When you understand that financial goals — not uptime goals — should drive the allocation of maintenance resources, you are then (and only then) able to properly allocate those resources.

Suppose you have twenty two maintenance techs. Maybe this team consists of electricians, mechanics, and general maintenance hands. They are 100% utilized throughout each shift, never an idle moment. They complete PMs and respond to trouble calls. The PMs are issued by date, and the trouble calls are assigned first in, first out; this is typical. The PMs are cookie cutter and basic. Otherwise, they would never get done, and if you’re not completing PMs you get more downtime — right?

With this game plan, you can have a situation like this. The two big widget makers that are responsible for most of the plant’s revenue get the same preventive care that two dozen low-revenue, low-profit machines get. Let’s say total downtime per month is 20 hours.

But then you decide to reallocate resources away from those two dozen machines, causing total downtime per month to increase by 10 hours there but to decrease by 10 hours on the two big Widget Makers. The total downtime remains the same. If one machine produces $10 million per month at 25% profit, and all of those smaller machines combined produce $2 million at 15% profit, how do you think the company execs will view that?

This example is an oversimplification to demonstrate a principle. The correct way to allocate maintenance resources is based primarily on cash flow and profitability. Other factors may come into the calculation, such as maintaining a good relationship with Customer X or breaking into a new market with toe hold production of some representative items.

Nobody in the maintenance organization needs to figure this out. You just have to ask the production superintendants or the plant manager which machines, work cells, or lines are the most critical and which are the least critical. Put the least resources into the least critical and the most resources into the most critical. There’s not a ratio like 10-80-10 that works for all plants. Maybe it’s just one line that truly matters, or maybe it’s three out of 10. So, don’t pose the question in that framework.

For the winner(s) of this question, take these actions:

  • Go through the failure records for that machine, work cell, or line, and identify the most likely cause of each failure. Then determine how to apply (in this order) design changes, predictive maintenance, and preventive maintenance along with any necessary training to solve for that cause.
  • Examine each PM to see what can be automated or done with a different technology. For example, if a step requires checking fastener connections, you need to replace that with thermographic scans. If a step requires taking vibration measurements, you need to replace that with vibration monitoring. Don’t be afraid to request expenditures here — they will pay off.
  • Set up a priority system for downtime response. For example, allow the operator or his/her supervisor to directly request a maintenance technician; the work order can come after the fact, once the machine is running correctly again.
  • Identify special tools, jigs, test equipment, and safety gear needed for maintaining and repairing this equipment. Store these items in a locker near the equipment, and you reduce the time wasted walking back and forth to the shop to get it. This is especially valuable when the equipment is down and cash has stopped flowing.

For the loser of this question, take these actions:

  • Identify the least tolerable failure modes. Allocate maintenance resources to prevention of these only. Look for design changes where they make financial sense.
  • Install monitoring where practical and financially feasible based on the cash flow and profitability of that equipment. Get production to work with you to make this determination.
  • Mark this equipment as last priority for downtime response. Provide a means to elevate the priority due to changing circumstances as identified by the responsible production manager. For example, there’s not enough inventory to meet an order so a production run is needed.

If your organization focuses on the financials when allocating maintenance resources, your actual cost of downtime will be far lower than if you were to allocate them based on total downtime.

About the Author

Mark Lamendola

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