Today’s lesson: Nothing will beat the value of a piece of timber in production.
If your machine normally runs at 15m/minute for 4 hours, running a product at $4.50 per metre at an assumed 80% efficiency rate is $67.50/minute, $3,240/hour and $12,960 in four hours.
Obviously, a loss of nearly $13,000 is significant and puts a huge dent in your day’s profitability but aside from the calculations around hours and timber value, there are other impacts on your profitability.
When a machine goes offline, you won’t necessarily know if it’ll be for 10 minutes or a whole day. It could be a simple matter of adding some more oil or cleaning out sawdust. On the other hand, parts might have to be ordered in and a technician might have to attend, or worse, you could have a catastrophic machinery failure on your hands. It can be fairly simple to calculate the per minute loss, but the overall operating loss won’t be known until the machine is back up and running to its full potential.
Negativity in the workplace
Zero production has a ripple effect. Staff working on the failed machine can be sent for a break while it’s inspected but if the downtime drags on, tension builds right across the business. Stress, anxiety and disappointment are all understandable but tremendously negative emotions and coming back from that can be challenging. When restored, production may be less than optimal which of course, costs money too.
Impacts on others
When nothing is coming off the production line, the impacts can be far-reaching. Depending on which machine has broken down, it can affect productivity on other lines and cause those operators too to be stood down until the issue is rectified. Through the office, the admin and management teams must rally to put the right steps into place, calling the machine supplier and/or technicians. Dispatches are halted, throwing a spanner in the works for haulage partners and ultimately, customers are left waiting for their products.
The benefits of regular maintenance
Production interruptions are preventable. By carrying out maintenance tasks at a controlled time, there are no surprises, and the entire system becomes more predictable.
As Craig Halfpapp, Stirling Machinery’s Service Manager says, downtime can be minimised or prevented altogether if an appropriate maintenance schedule is implemented. “A 15-minute daily check of the machine means it will run smoothly the next day, helping the business to maintain output levels, resulting in consistent profits,” he explains.
A positive maintenance policy promotes constructive partnerships. You have happy operators, happy customers and a healthy relationship with your machine supplier. Protecting your profits and keeping costs low is also important for business security, to ensure a smooth-running overarching system that is not vulnerable to spikes and troughs.
Furthermore, keeping your machines well maintained can gain your productivity. Instead of running at 15m/min, you could realise a machine’s full potential at, say, 20m/min. Take a look at what that looks like in real dollar terms:
An increase of 5m/min
8 hours x 60 mins x 0.80%
= 384 minutes available
Timber value = $93 per minute
Extra 5m/min x 384
= 1,920 total extra linear
= $8,640 more per shift
= $43,200 more per week
= $172,800 more per month
The relationship between profitability and machine uptime is undeniable.