Hidden cost
Below is an example
below of the hidden cost made relevant in just one of
the proposed TDC buckets: labor. You will see the true
cost of labor associated with the downtime scenario to
be only $295. That amount pales in comparison to the
other TDC categories combined, which can be 10 to 100
times that amount depending on the particular downtime
occurrence. So you can see how the TDC method can be a
valuable cost justification and benchmark tool to
maintenance managers. A great analysis asset to
executive management and a great sales tool to those
who provide service and products to manufacturers.
(Especially ERP and CMMS vendors who are the
consolidators of the data)
There are three main
downtime categories proposed. The main category of
“Equipment Cost” and “Labor Cost” are composed
of metrics that are one time entry of constants,
updated annually, exported from your existing computer
systems. The main category of “Downtime Cost”
contain the metrics that are "per downtime"
occurrence entries, but most can be exported from your
existing CMMS. The data being recorded from facility
to facility, from software package to software
package, vary greatly. I have done detailed analysis
of each downtime cost metric, but the results are too
great to mention in this article. Surprisingly some
metrics have large cost savings opportunities and have
been overlooked by the general industry.
Since labor cost is one
of the most popular areas to first start seeking
opportunities, let us take a look at just one method
of the old school style of thinking. (Which also
happens to be a primary concern in downtime decision
making.) Labor, more specifically direct labor. For
example you have six operators doing not so productive
cleaning while a machine is down and two maintenance
technicians doing the repair. The decision makers are
thinking… “At $10 per hour operator wage, $20 per
hour maintenance wage, that is $100 per hour. Well, I
know there is overhead involved too, but with so many
categories it is too complicated to consider. Overhead
is just a percentage of my man-hours anyway.”
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