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Maintenance Management Resources
Six sigma and lean manufacturing, it's all about money:
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True Cost of downtime
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TDC - Maintenance parts and shipping Category

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These are per downtime occurrence entries, but most can be exported from your CMMS. Your existing method of reporting need only meet the TDC recommendations below.

Out of the parts and procurement fields below, the actual parts cost is the only value commonly tracked. Those with sound work order procedures may also do a good job of tracking Band-aid parts cost, and in-house fabrication time associated with a downed machine.

Rental cost for such items as JLGs, temporary air compressors, generators, etc. seldom are added to that final dollar amount associated with each downtime instance. Hours of parts (store) personnel's involvement in parts procurement is another big ticket item not associated with each downtime occurrence. Instead, parts procurement is hidden among the vague "overhead cost" dollar amount.

Your Parts and procurement cost...


  • Actual parts cost
    • as commonly reported
  • Band-Aid parts cost
  • Rental cost
  • Parts procurement Time
  • In house fabrication time

     

     

 

We can see the hidden cost of parts and procurement in the following testimonial from one company. This example is one of the most common executive oversights in all types of manufacturers.

An air compressor goes out, a management decision to go with the lowest bidder on the repair.” A common policy in the manufacturing industry. “The repairs were done improperly and the air compressor goes down again. This time we hire the more reliable and expensive repair service, but have to wait for their schedule to clear up. During all this the company is paying $ 1,000s a day to rent a compressor. The cost of service twice, rent, and downtime, could have paid for a new compressor with warranty.” They eventually winded up buying a new one anyway, the only difference by the time they actually bought it, the cost was the same as if they had bought two!

They may have recovered all the money they were charged for the first fix, (or may not have) but the administrative man hours related to this entire event had to be astronomical. There was time finding the first service provider, meetings between management on what to do, then more meetings when the first service provider's work failed. Then more meetings, then finding a rental, then finding a second service provider, or new unit, analysis, maintenance personnel involved. Then there was the rental fees, and the cost of downtime.

Hind site is 20/20, yep heard that more times than I care to remember. The fact is, if all involved were aware of the true downtime cost (TDC) of that bottleneck, they would have seen it viable to invest in quality craftsmanship. Are they the only company in their corporation to make this mistake? No! Hopefully the above situation resulted in corporate policy so all companies could share in that hind site.

This is what Business Industrial Network is all about. Helping us all learn from each other's mistakes.

Your shipping cost  have a default value...

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