When the equipment in your workplace goes down or fails to run smoothly and production halts or slows down as a result, you have what is known as “downtime”. Downtime can hurt more than your pride in efficiency – it comes at a heavy financial cost, costing U.S. manufacturers and industrial companies billions each year. Downtime also makes it harder for a company to meet its objectives, and it erodes customer trust at the same time. Although it cannot be totally completely, preventative measures can help prevent quite a few hidden costs. Think things like regular maintenance and effective safety programs.
The High Cost of Reduced Production Levels
With important equipment offline during downtime, production output drops sharply. Manufacturers pay double – the lost revenue from lower production and output levels plus paying employees for idle non-working time. As a result, downtime hurts sales, profits and achieving organizational objectives. According to the folk at Compliance Consultants Inc, experts in workplace safety consulting, reducing downtime is a way to enhance production safety by ensuring steady operations. It also maintains positive cash flow for reinvesting in further business growth and keeping customers happy.
Penalties from Missed Delivery Deadlines
As industrial equipment failures lead to lowered output, companies struggle to meet delivery deadlines set in sales contracts and supply agreements. Even a few late deliveries can severely damage business reputation and relationships with wholesale buyers. Worse yet, late delivery penalties, fees or chargebacks may also be imposed for any contracts breached because of reduced production levels from unexpected downtime. Some companies even lose customers permanently due to just-in-time inventory models that leave no room for variability in supply chains.
The Impact on Morale and Product Quality
When downtime happens frequently, employee morale and loyalty suffers from instability, reduced hours and earnings. During extensive equipment failures, vital production and safety training can also lapse, which risks quality assurance as workers feel less empowered in their roles. Subsequently, lower employee morale quickly leads to a higher turnover rate as talented staff leave continually unreliable workplaces for pastures anew. Even when production is restored, quality can remain low while new hires are trained.
Avoiding Lost Earnings from Product Defects
Defective products manufactured hurriedly lead to even more financial consequences of downtime in industrial workplaces. Flawed items that do not pass quality control inspections before shipping must be scrapped or reworked, sinking costs further. If defective products make it to customers before defects are detected internally, then expensive recalls may occur or replacements sent, all amounting to hard dollar losses. Workplace consultants advise that reducing equipment downtime enables sustained quality assurance and avoids lost earnings from product defects reaching end users.
Installation of Backup Redundancy Assets
Some leading manufacturers entirely avoid downtime by installing backup redundancy machines, tools or other parallel assets that seamlessly takeover workflow if the primary equipment falters. This prevents staff stoppages or production halts from derailing operations. While redundancy equipment also carries a sizable capital cost, many enterprises find this worthwhile to escape revenue losses from delays and penalties by keeping output flowing 24/7. With backup redundancy machinery minimizing any pauses, production targets and client delivery needs stay satisfied.
Conclusion
The hidden costs of downtime – like business disruption, reduced output and quality control issues – collectively hurt industrial revenues if they are left unaddressed. Forward-thinking companies avoid costly unplanned downtime by investing in preventative maintenance and backup systems. This sustains production safety and higher output levels to meet targets and customer demand without delays or penalties from variability and machine failures. With output consistently high 24/7, profits remain strong. Planning ultimately keeps industrial enterprises running smoothly all year long.
