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True Cost of downtime
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TDC - Product Category

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This category is a one time entry of a constant, updated annually, exported from your existing computer systems. Your existing method of calculation need only meet the TDC recommendations below.

When analyzing and recording the true cost of downtime, the product category is made up of two sub-categories. Cost per unit, and units per hour. An example of how being aware of direct labor cost can save over $ 50, 000, just think of the savings when you monitor the other product cost listed in TDC metrics.

Cost per unit at that stage in production

This sub-field is a general assessment of the product cost at the stage in the process relative to the machine (cell or other method of categorizing the profit center) uses it for raw material. This percentage of total product cost will be used to calculate downtime at the machine/profit center.

Most companies view cost per unit as "labor per unit". This can be very deceptive when each unit consumes its share of overhead, maintenance, machine wear, raw material, etc. Even if you're just looking at "labor per unit", a most don't consider supervisor, QC, managers, maintenance labor, etc. Click here to see one who does use all the metrics.

Units per hour

Units per hour is another sub-field used to calculate downtime at the machine/profit center. It is important to use the units that would be produced if the machine was running at manufacturer's specified speed and capacity. This is a key area of potential savings as pointed out in the OEE section.

An example is High-tech gluers, which are all computer controlled, and provide speeds of up to 60 thousand units per hour with on line quality control. If your machine falls in the industry average OEE of 60%, that's 24 thousand units per hour times the cost per unit, you are losing.

 

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