How much does system downtime and its associated loss of production actually cost food manufacturers? By most estimates, and on the whole, food manufacturing companies are incapable of accurately calculating how much unplanned employee downtime costs their organizations. Research shows that food and beverage production plants often do find themselves challenged to develop a reliable cost estimate for losses attributable to downtime. This confusion is ascribable to the many less-than-obvious sources contributing to the lost revenue associated with unexpected system downtime.
The best approach for minimizing the potentially devastating financial impacts of downtime starts with a thorough understanding of how much it actually costs. To assess this, food manufacturers must be able to locate the source of downtime and define its total duration in advance of establishing its true cost. Below, we’ve assembled a list of the hidden and not-so-hidden expenses tied to lost manufacturing production before suggesting a few best practices for avoiding downtime altogether.
Some common expenses associated with downtime
Unplanned system downtime triggered by equipment malfunctions and hardware failures routinely costs companies hundreds of thousands of dollars, if not more in cases of a prolonged interruption. Essentially, your food processing plant is just throwing money out the window as your staff and manufacturing lines idly stand by. In some situations, downtime can’t be avoided. Under these circumstances, companies should safely budget for planned downtime events with the aim of completing them as soon as possible.
Unplanned downtime, however, can be devastating to your bottom line. Here are a few of the most common ways downtime will start immediately emptying your operating budget:
1. Loss of production
Production loss is an unhidden expense that follows virtually every incident of unplanned downtime. Over any stretch of unexpected downtime, the typical revenue you would anticipate from producing food and beverage products is lost with every passing minute. Calculating the amount of revenue lost after a disruption requires a firm knowledge of how much revenue your company generates during periods of normally functioning uptime. According to TEEP and OEE downtime should be factored as availability loss, and the financial cost of lost production is determined by the loss of access to your manufacturing assets.
2. Workforce overhead
Labor costs are another direct expense you’ll face after periods of unanticipated downtime. As aforementioned, you’re paying employees to wait for an indeterminable time as you locate the source of your equipment and hardware malfunctions.
However, there are indirect labor costs to consider as well. You will need to involve maintenance and operations supervisors heavily while inspecting and mitigating the issue that caused downtime at your site.
You may even be required to draw outside sources for emergency consultation services. Unexpected disruptions to your production set your current projects behind and, in terms of labor, can cost you in several areas you might not have anticipated.
3. Reduced operating capacity
Unplanned downtime may not halt your operations entirely, but a prolonged incident almost always reduces your ability to operate at a profitable capacity. Food manufacturing companies have a difficult enough time adjusting for unexpected spikes in demand. If a disruption that leads to system downtime occurs during times of peak demand, the financial damage can be devastating.
4. Product inventory waste
Food manufacturers that work with perishable items are especially vulnerable when factory equipment and machinery fail. Raw food materials could end up discarded while your production lines are down for repair.
5. Impacts on brand reputation
Companies that have managed to avoid significant system downtime often underestimate how damaging a prolonged and substantial interruption to their operations can be. The time it takes and the weighty expenses that go into repairing maintenance-deferred equipment, not to mention the delayed production, aren’t easy for most manufacturers to explain to their dedicated customers.
How can food processors avoid expensive downtime?
The best way to avoid the financial pitfalls after a bout with downtime is to take a proactive approach to ensure that it never happens in the first place. If your production finds itself unexpectedly disrupted, proven solutions and trusted resources for evaluating the impacts of this are plentiful. With the right food and baking automation solutions in place, you should be able to prevent most incidences of unexpected downtime. If you can’t, these technologies can help to reverse course and get your systems back up and running after minimal delay.
Automated industrial solutions for the baking and food production industries are engineered to prevent problems through detailed preventative maintenance programs that keep your equipment functioning optimally. A reliable maintenance schedule depends on accurate and accessible data. Automated industrial software for food manufacturing streamlines this process while helping you cut your operating costs.
Machinery malfunction and user error are among the primary causes of unscheduled downtime. But failure to automate the appropriate equipment maintenance is a close third. A vast majority of downtime is eliminated by simply upgrading to modernized automated food production equipment and hiring the minimum required staff qualified to operate it.
Lastly, successfully executing your planned downtime sessions is important if you aim to prevent unplanned downtime. Ensure you’re being as efficient as possible during planned system outages and continue developing ways to increase efficiencies during these runs. Assess how you can prevent future occurrences, and try to identify any less-than-obvious issues hiding in plain sight.
How EZSoft helps food processing companies prevent downtime
EZSoft is a full systems integrator of process controls and manufacturing execution systems that works closely with the food and chemical manufacturing industries to develop automated software solutions that prevent unscheduled downtime. We help companies increase their productivity by maximizing scheduled uptime and boosting their production capacity without expanding warehouse space or increasing their labor overhead.
If downtime is an issue holding your food manufacturing facility back, consider partnering with EZSoft, the experts in industrial automation and manufacturing efficiency. Learn more about how to quickly and affordably bring your system downtime issues back under control by completing our online request for contact form or calling the team now at (484) 568-5040.