Improper Production Downtime Tracking is Flattening Your Profits
How accurate is your production downtime tracking? Are you even tracking production downtime? Do you have a good idea of how much production downtime is costing you each week, month, year?
Consultants believe 4 out of 5 manufacturers (80%!!) are unable to accurately estimate their downtime (source). This is a crazy number because downtime is a leading cause of lost revenue in manufacturing. What’s even scarier, is when you look at the statistics for how much money production downtime is costing manufacturers on average.
Over 7 years ago in 2014, the average cost of downtime per hour across all businesses was $164,000 (source). If I was losing $164,000 per hour for any reason, I know for a fact that I would want to know exactly how and why right away. In addition, I would do everything in my power to minimize such a costly event in the future. Now, don’t let that first number sink in. Just two years later in 2016, that number jumped to $260,000 per hour on average across all businesses. That was 5 years ago, I’ll leave it up to you to determine where you think that number might be today in 2021.
That is a lot of money, there’s no questioning that. But, how many hours of downtime will a company encounter each year on average? 800 hours. Want to know what 800 x $260,000 is? Neither do I, I’ll just say that there are 9 digits in that number, and the first number is not a 1. 800 hours might sound like a lot, but when you break it down, you see how quickly it all adds up.
Why Aren’t Manufacturers Paying Attention to Production Downtime Tracking?
If production downtime is so expensive, why don’t most manufacturers have accurate and detailed data regarding their own downtime within their own facility, if any data at all? It’s tough to formulate a clear answer to this question.
A large number of manufacturers get stuck in their old ways. They have been doing business a certain way for decades successfully and see no reason to make a change now. The problem here is that decades ago, data was not a big part of manufacturing. There really were no tools or technology available to pull a large amount of data from machines and equipment. Consequently, there was not a huge amount of machine optimization or emphasis on increasing the efficiency of current equipment on the plant floor.
Today, it’s an entirely different story. The entire world has been going through a digital transformation. New technology everywhere, and this produces a lot of data. You need to find a way to access this data that is trapped inside of these devices that are loaded with technology, and just need to be unlocked. Companies like Facebook have thrived off of data. They have grown and scaled their business by gathering data and making informed data-driven decisions based on that information.
What does this mean for the manufacturing industry, and production downtime tracking? How can you leverage today’s tools and technology to improve the way you do business?
Leverage Today’s tools for Better Manufacturing and Better Business
The manufacturing industry is vastly different than what it was some years ago. Today, there are tools and technology that help with production downtime tracking, plant floor efficiency, increased throughput, and many other things. Do you need tools that help in these areas, or are they just icing on the cake?
The short answer is yes, you do need them if you want to keep growing your company in 2021 and into the future. The manufacturing industry is growing more competitive. It’s a challenge today to find good employees, draw in new clients, and improve your manufacturing process.
Industry 4.0 has brought new principles to manufacturing. While industry 3.0 focused on machine automation and computerization, industry 4.0 emphasized data and using data to improve business processes. Yes, we know that we can automate machines to take over a lot of the manufacturing work and activities that humans would otherwise have to handle manually. But now, it’s time to start refining and improving these processes. Gather data, and make data-driven decisions to improve operations across the plant floor.
Along with industry 4.0, came an abundance of industry 4.0 capable tools. IIoT systems are one of those industry 4.0 tools that can assist you in improving your process.
IIoT Can Give You the Edge You Need
These IIoT systems can be implemented into any factory, even on machines 30, 40, 50 years old. These systems pull data directly out of the machines and equipment on the plant floor and deliver that information to operators and decision-makers in real-time. This changes the way we do manufacturing. Instead of having a person walk around the plant floor and record data on a spreadsheet and then hopefully getting that “accurate” information to the right people at some point, you can receive data instantly and make the adjustments right then and there.
Imagine the difference it would make to have access to real-time data giving you insight on production downtime tracking, how much scrap you have, how much throughput, predictive maintenance insights, and asset utilization just to name a few areas IIoT can help.
IIoT delivers information to all decision-makers in a timely manner. You gain the ability to see exactly where you need to improve instantly so that you can make an adjustment, and then see if that adjustment helped or not right away.
Before systems like this were available, it was much harder to gain real insight into the plant floor. Furthermore, it was near impossible to see how adjustments are affecting production in real-time. Production downtime gets extremely expensive. You need to be doing everything you can to continually, and proactively make improvements to give yourself the competitive edge.
Final Thoughts on Production Downtime Tracking
Production downtime is a leading cause of lost revenue for manufacturing companies. Yet, the vast majority of manufacturers struggle to accurately estimate and minimize downtime. Companies are losing millions of dollars from production downtime each year. For an industry with so many moving parts and people, it’s essential to track processes, make improvements, and do everything you can to get the most out of your equipment.
Set yourself apart, be that 1 out of every 5 manufacturers that are aware, and can accurately estimate downtime. Leverage the tools and technology available today to gather accurate real-time data. Make data-driven decisions to improve business processes, and climb past your competitors.