As a leading automotive supplier, you are always looking for ways to improve processes, optimize costs, and expand margins. After all, auto suppliers represent roughly 70% of the industry’s costs (McKinsey), putting pressure on you to increase productivity.
One way to drive productivity is to reduce unplanned downtime. That is, reduce instances of unscheduled downtime, but also shorten the duration of each incident.
Unplanned downtime isn’t just a fact of manufacturing. It’s also a key performance indicator that savvy auto suppliers measure and monitor. Auto suppliers must know what to measure in order to optimize performance. Here’s how to do it.
Unplanned Downtime Defined
In manufacturing, downtime is the time when a machine or line is not in production. There are two kinds of downtime: planned and unplanned. Planned downtime is downtime that a company expects and prepares for, such as the downtime that’s required to maintain equipment.
Unplanned downtime is downtime that a company does not expect. It is typically caused by equipment failure or machine breakdown.
You calculate your unplanned downtime by first measuring the total number of hours each month that your machine, set of machines, or entire line is down for any reason other than planned downtime. You then divide that amount by the total number of hours each month that the machine, set of machines, or entire line should be operational. Then multiply your result by 100 to get a percentage.
For example:
Total Time = 160 hours
Unplanned Downtime = 10 hours
Unplanned Downtime / Total Time = 0.0625
0.0625 X 100 = 6.25
Unplanned Downtime = 6.25%
Seven Direct and Indirect Costs of Unplanned Downtime
Unplanned downtime matters because it’s costly. Every minute that a machine or line is down is a minute that your operation isn’t producing product or generating a profit. Unplanned downtime is costly in multiple ways, both direct and indirect.
- Loss in production: The most obvious cost of unplanned downtime is lost production. You are in business to manufacture parts, components, and assemblies for automotive OEMs. When your machines stop, so does your production.
- Loss in worker productivity: When your machines stop working, your workers stop working. Unplanned downtime sometimes involves paying unproductive workers to stand idle on the shop floor for hours while a repair tech fixes a machine and puts it back into production.
- Loss of downstream worker productivity: When unplanned downtime affects only one machine or one cell in in your line, all of the downstream machines and cells are affected as well. When something stops upstream, everything stops downstream. This makes multiple productive workers suddenly unproductive, even though their equipment is operational.
- Staff hours wasted fixing the cause: An equipment breakdown typically causes unplanned downtime. This breakdown requires staff to arrive and repair the machine. This wastes staff time.
- Cost of machine repair: Fixing a machine not only wastes staff time, it also wastes parts and supplies, which is likely not what the company was anticipating and therefore they do not have the correct supplies on hand.
- Delayed customer orders: Not surprisingly, unplanned downtime delays shipments of finished products to waiting customers. And that is never a good look.
- Damaged reputation with customers caused by delayed orders: Customers may overlook one delayed order. But it’s harder for them to overlook multiple delayed orders caused by unplanned downtime. Customers quickly lose faith in suppliers who fail to meet their on-time delivery obligations.
Causes and Remedies of Unplanned Downtime
There are four primary causes of unplanned downtime. Once you understand them, you are ready to start monitoring for them—and remedying them.
Machine failure
The most obvious and common cause of unplanned downtime is machine failure. A piece of equipment somewhere in your production process stops working unexpectedly.
One remedy for unexpected machine failure is to expect machine failures. You do this by conducting predictive maintenance. Predictive maintenance is maintenance that relies on data analytics, not a calendar, for its effectiveness. You gather data from your machines (typically in real time and typically with IIoT devices), and then analyze that data to detect anomalies and defects and predict when the machine is likely to fail. You then take corrective action to prevent those failures.
Unavailable parts
Sometimes your machines go down, not because they stop working, but because they have nothing to work with. Delays in your processes for getting parts and supplies to your machines causes those machines to sit idle.
A cure for these delays is to conduct value stream mapping that visualizes where your gaps are. Value stream mapping is a Lean management technique that lets you visualize (like a map) the process you go through, step by step, to manufacture and deliver a product to a customer.
Human error
Sometimes the cause of unplanned downtime is untrained machine operators. Workers who lack the proper skills and training to operate equipment are more likely to make mistakes. They load parts incorrectly, push machines beyond their safe operating limits, and in other ways deviate from best practices for effective machine operation.
One way to minimize human error is to conduct regular training. This obviously includes initial training that a worker receives when operating a piece of equipment that is new to them. But it also includes refresher training throughout the year to ensure that all machine operators are aware of all possible errors to avoid.
Micro stops
A micro stop in manufacturing is one that halts production for a short period of time because of a temporary problem. Micro stops are major enough to halt production but minor enough that they do not require the operator to document the stoppage or the cause. But micro stops are still a cause of unproductive, unplanned downtime. You must eliminate them whenever possible.
An effective way to reduce micro stops is to conduct a Gemba Walk through your plant to identify the root causes of micro stops. In a Gemba Walk, you walk the shop floor and talk with the people who operate your machines. A Gemba Walk gives your managers the opportunity to visit your production floor to see how operators complete, or don’t complete, a specific operation. Only by walking the length of your production process, watching it in operation, and talking to your operators, can you spot the issues that cause micro stops and take steps to eliminate them.
Conclusion
Unplanned downtime is a type of waste. It wastes time, money, resources—and the patience of your machine operators and customers. If you are an automotive supplier with an unacceptably high rate of unplanned downtime, take the time to understand the causes and costs of unscheduled downtime, and then take these proven steps to eliminate those causes.
MCA Connect helps automotive suppliers reduce their unplanned downtime with a unique service called Manufacturing Transformation. Manufacturing Transformation helps automotive suppliers reduce waste, improve capacity, and globally optimize constraints to achieve P&L and balance sheet goals. It’s a comprehensive offering that reviews your goals, establishes objectives, and uncovers opportunities for improvement. It also designs future state processes and leading-edge IP solutions for transforming your manufacturing operations into an optimized Industry 4.0 facility. Learn more.
Author: Jay Feldman, Managing Director, Strategic Services
