Reducing downtime

by Arne Oas

One main purpose of a CMMS and a preventive maintenance (PM) program is to reduce equipment downtime. Another is to keep equipment at a desired operating condition. If you are trying to justify a good maintenance program, this is one area to evaluate.

Downtime costs are made up of several components. The most costly result from:
1) The inability to make product
2) Non-productive labor costs 
3) The loss of unused or spoiled material
4) The loss of business sales and opportunities
5) The consumption of non-productive utility operation.

To determine potential savings in downtime that a maintenance program can help you achieve, you must first define your downtime. In other words, when does it start and when does it stop? 

Here’s a definition many of my clients find useful:  Downtime is the amount of time a piece of equipment is not available to a customer for maintenance-related reasons. This is measured by the time from when the maintenance department received word of equipment malfunction, to the time the customer is notified the equipment is back in running condition (minus any time the customer would not ordinarily use the equipment).

Next, it is necessary to establish how to track downtime. This usually requires setting your CMMS  system configuration to track downtime using equipment operating calendars.

To calculate the potential downtime savings, you must first establish a base (or normal) downtime hours for the operation you wish to improve. Once you’ve established this base, put a dollar value on the profit lost during the base downtime. Divide the profit lost by the base hours to arrive at an average hourly downtime cost.

Total base downtime hours X 
average cost of downtime per hour = 
Average Annual Downtime Cost.

Significant gains possible
By doing effective PM and PdM, you can ensure or improve the capacity of the plant or facility because the equipment will be available when required for production or customers. Studies show an effective maintenance program can reduce downtime costs by 15 percent or more.

Annual downtime cost X
 reduction percent (average 15%) = 
Estimated Downtime Annual Savings.

Because this process can be complicated, it may be easier to establish cost for a whole rather than an individual area, line or piece of equipment.

Another quick way to approximate average downtime cost is to take the operating cost of the site less the cost of raw material and divide it by the site’s normal operating hours. This calculation, however, does not include lost profit from lost sales or operations. But it approximates the average actual cost.

Faster response time
In addition to an effective PdM/PM program, don’t forget the saving potential from reducing response time to problems. It is an excellent way to reduce downtime.

When maintenance takes too long to respond to problems, it causes operators and equipment to be idle. If maintenance can’t investigate a problem in a reasonable amount of time, it can cause significant morale problems among operating staff or customers. To speed up response time, maintenance typically assigns the first available person to do the repair work. All too frequently this is the wrong person, causing longer and unnecessary delays.

One solution is to assign maintenance troubleshooters to specific geographical areas in the facility, reducing travel time. The on-line work request features of your CMMS can help improve customer response, reduce paper and decrease handling times. You can also decentralize maintenance groups with multi-skilled tradespeople in operating areas, make crash carts available that contain the proper tools and parts used for repetitive major failures, and print parts catalogs for mechanics or have them available on computer screens. In addition, your CMMS can help you develop preplanned jobs that include parts and tool kits.

Arne Oas is the senior consultant for Computerized Facility Integration. He can be reached at 215-918-2165 or by e-mailing aoas@gocfi.com. 

This article appeared in the April/May 2005 issue of MRO Today magazine. Copyright 2005.

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