Downtime can be a detriment for tissue converters, but it’s also necessary to keep production lines running at peak efficiency. The difference between hindrance and help is whether the downtime is unplanned or planned.
The difference between the two is simple and rather obvious:
The major difference between the two is definitely evident in the bottom line. According to recent American Productivity and Quality Center (APQC) estimates, unplanned downtime accounts for a loss of anywhere from 40¢ to $1.20 on every $20 in revenue. This amount may seem insignificant but, extrapolated based on the revenue of a multi-million dollar tissue converting operation, the loss adds up quickly. Plus, over eight in ten manufacturing companies has had at least one unplanned event within the past three years, with most experiencing two.
Recent data suggest 80% of industrial plants can’t accurately estimate downtime and, of those plants that can, downtime is under-calculated by up to 300%! To keep unplanned downtime from eroding performance and profitability, tissue converters must understand how the true cost of downtime is arrived at using a generally accepted formula of:
The “tangible costs” bucket encompasses lost revenue, decreased production capacity, idle employee time and extra costs associated with scheduling emergency repair crews.
The unseen “intangible costs” are not as easy to definitively calculate in terms of dollars and cents, but their toll on employees — and, in the larger sense, your business — can be quite costly. The stress involved in dealing with the fallout of a tissue converting production line crisis is enormous because every decision is split-second, and every minute of downtime is thousands of dollars lost. Over time, the reactivity of identifying and rectifying failures can chip away at employee morale, as can excess inactivity.
While there will still likely be the occasional unanticipated break or shutdown, aiming for a 75% mark in proactive maintenance is beneficial in keeping tangible and intangible costs low.
Regular planned downtime:
Knowing what goes into true downtime cost and the potential adverse impact of those tangible and intangible factors on your profitability makes a strong case for using predictive and preventive maintenance (PPM). Achieving and sustaining PPM effectiveness — and therefore properly planning downtime — requires several key components: