It is estimated that just one minute of downtime in the global automotive industry costs $22,000 due to unexpected stoppages. The effects of increased costs and reduced productivity caused by unscheduled downtime can be hugely damaging for manufacturers. Read on to find out more about downtime and how a manufacturing ERP system could help.
Downtime encompasses any unplanned event that causes your manufacturing process to stop. A material issue, shortage of operators or unscheduled maintenance could all trigger production to halt. Likewise, viruses and malware can also cause downtime issues within your supply chain. The unifying element of these issues is that, despite being scheduled, production is not running due to an unplanned stop.
For most manufacturers, downtime is the single largest source of lost production time. The problem receives a high level of attention since equipment failures and breakdowns are highly visible. Yet, despite the frustration of watching idle equipment, a number of manufacturers significantly underestimate their true downtime. It is important that downtime is at a minimum as low productivity means that costs will increase and customer relationships could be injured as demands are not met on time.
As productivity suffers the costs associated with the employees, who are unable to carry on with their tasks, cannot be halted. The company will produce less using the same amount of labour and at the same cost. Salaries, rent and third party fees will all still need to be paid regardless of any work being done during downtime. Furthermore, the stress of increased downtime prevents employees from working as efficiently as possible.
When your business is unexpectedly down for a few hours in the middle of the week, you not only risk losing money, you also risk injuring your company’s reputation for delivering value. If downtime becomes a regular occurrence and manufacturers begin to struggle to meet customers’ demands, it is likely they will begin to lose their trust and patience with you. An injured relationship could result in customers taking their business elsewhere.
To ensure that downtime costs are at a minimum, it is important that manufacturers have an industry-specific ERP implemented within the supply chain. The quality ERP software that In2grate provides has a high-powered security system to defend the supply chain against viruses and malware. Furthermore, an asset management module will alert you of faulty machinery and equipment. This means that preventative measures can be implemented quickly and the problem can be dealt with effectively with minimal consequences to production.
The expertise and experience of the In2grate team and the comprehensive ERP software we provide gives manufacturers the confidence that downtime can be prevented. To find out more about how In2grate can help the automotive industry read part one of our two-part series on automotive trends here.