Downtime is the undisputed enemy in manufacturing. But do you know how much an hour of downtime actually costs?
If you’re unsure, then you should start tracking downtime.
Start by calculating the overall equipment effectiveness (OEE) and true downtime costs (TDC) to measure your equipment’s efficiency and overall downtime costs, respectively. You can’t fix a problem you don’t know about — which is why measuring the cost of downtime is the first step to minimizing it.
Understanding the two types of downtime
Downtime is any period of time when a machine is not producing. For packaging lines, that would mean any time a machine has stopped packaging products.
There are two types of downtime: planned and unplanned.
Even while some planned downtime is necessary, both can amount to hundreds of hours of lost productivity. This can lead to millions in lost revenue, late order fulfillments, and wasted manpower on the packaging line.
What is planned downtime?
Planned downtime occasions are scheduled stops in production such as:
- Scheduled maintenance
- Hardware upgrades
- Non-working holidays
While maintenance is necessary, it is still downtime. Your goal is to quickly complete maintenance, changeovers, and upgrades in order to get back to production. Make sure your staff is properly trained and has all the tools necessary to complete your scheduled maintenance.
Proper training from your packaging equipment OEM, as well as real-time support, can go a long way toward minimizing maintenance downtime. Additionally, a robust machine design will produce fewer vibrations which cause your machine to wear down faster, adding to its longevity and reducing the need for spare parts.
Moreover, an OEM with a global spare parts supply chain reduces downtime because attaining parts is easier and faster. Centralized control systems, like Allen Bradley, also help limit downtime because more technicians are trained on the Rockwell platform, so fixes are faster.
What is unplanned downtime?
Unplanned downtime is unscheduled or unexpected stops on the packaging line. Contrary to its planned counterpart, where time has been allotted for a small amount of downtime, unplanned downtime is unpredictable.
This is where serious damage to your line efficiency can happen, causing delayed orders and lost revenue.
Breakdowns causing unplanned downtime can stem from various sources:
- Hardware malfunction
- Machine jams
- Part failures
- Fixes due to poor preventative maintenance
If an entire part needs to be replaced or there’s a complicated fix, downtime can start adding up. Reduce your downtime from control parts using Allen Bradley controls. They give you access to a global supply of fairly priced parts and labor through distributors, systems integrators, and Rockwell direct offices. Some OEMs private label their control components to force their customers to purchase spare parts from them, sometimes at an inflated price.
Why tracking downtime is important
Downtime is bad for business because it results in unpackaged products, underutilized labor and unfulfilled orders. Each minute your line is down results in lost revenue.
To combat downtime, you first need to track it. Let’s break down how to do that by calculating overall OEE and TDC.
Tracking downtime and measuring efficiency with overall equipment effectiveness (OEE)
One way of measuring equipment efficiency is to keep track of OEE. This equation is great for making sure your packaging machinery is running at optimal efficiency — and identifying when it isn’t.
OEE (%) = (Availability of the equipment) x (Performance) x (Quality)
- Availability accounts for the events that stop planned production that are long enough to track.
- Performance accounts for anything that causes the manufacturing process to run at less than the maximum possible speed when operating.
- Quality accounts for manufactured products that can’t be used because they do not meet standards.
Downtime — both planned and unplanned — determines availability, which measures your machine's run time against your planned production time.
The final calculation will be a percentage indicating the equipment’s overall effectiveness. The higher the percentage, the better — around 95% is a reasonable OEE percentage to expect. If your equipment is running below that threshold, it may be time to look for replacement equipment.
Any decrease in OEE percentage points means less profit and productivity on the line. Products may need to be repackaged, output is lower, and labor is underutilized. All of this wastes time and money.
True downtime costs (TDC) and the cost of old equipment
TDC is a calculation that measures the total wasted business support costs. It factors in the lost opportunities caused by downtime, as well as the impact on resources needed to fix the issue causing the downtime.
The first part of the calculation uses tangible downtime costs, such as the value of products not produced. Below are the equations, in order, used to calculate true downtime costs.
- Total downtime = (Planned operating time) – (Actual operating time)
- Average production rate = (Total number of units produced) / (Actual operating time)
- # of units unable to produce = (Total downtime) × (Average production rate)
- True downtime costs = (# of units unable to produce) × (Gross proﬁt per unit)
Calculating TDC will give you an idea of the cost of production loss during downtime. However, there are additional factors to consider in your final estimations on the effects of downtime. Lost capacity and lost efficiency of labor are two examples. There are also intangible factors such as increased stress on machinery and employees, both of which could hamper growth and efficiency.
If you’re assessing whether to add or update a packaging machine or line in your facility, consider how decreasing your downtime can enhance your line’s performance. And if you need help auditing the efficiency of your current packaging lines, feel free to loop in our team of packaging equipment experts. You can reach us by filling out the form on this page.