According to Forbes, unplanned downtime costs manufacturing companies a whopping $50 billion per year. These unexpected halts in production—whether due to equipment failure, staff shortages, or other unpleasant surprises—not only cause these painful financial losses, but they can disrupt the entire supply chain and the people who count on them.
It’s no secret that every minute counts in industrial manufacturing. Downtime—especially when it’s non-purposeful or unexpected—is a critical issue that can significantly impact operational efficiency and your bottom line as a result.
Unexpected downtime is beyond frustrating. Machines will malfunction, employees will call in sick, and supply chains will get disrupted for one reason or another. The truth is that you’ll never be able to prevent hiccups in the production process, but there are things you can do to reduce it, respond to it, and be resilient enough to minimize its impact.
Strategic staffing is key.
This powerful yet often underestimated and underutilized approach can mitigate the risks and costs caused by downtime in industrial manufacturing.
Let’s delve into the high cost of downtime in the manufacturing business, why downtime occurs, and how partnering with a staffing expert like LSI Staffing can transform your approach to workforce management and maximize uptime in your operations.
The Two Types of Downtime in Manufacturing and Their Variable Costs
Manufacturing downtime is any time when facility output is stopped—whether planned or unplanned. Regardless of the reason, it’s a major headache because it not only prevents production, but also diminishes job satisfaction across your workforce.
In the world of manufacturing, downtime falls into two categories:
- Planned downtime is deliberately scheduled for things like maintenance, repairs, upgrades, or adjustments to machinery. It might cause a pause, but planned downtime is proactive because it prevents breakdowns, prolongs the lifespan of your equipment, and allows you to adjust production targets and client expectations.
- Unplanned downtime, on the other hand, refers to the unexpected costly halts caused by equipment breakdowns, human errors, and supply chain disruptions. It’s more expensive, too—costing about 35% more per minute than planned downtime. Ouch!
Unplanned Downtime Will Cost You
While planned downtime may stop production for a short time, it’s typically a more cost-effective solution in the long run. But unplanned downtime? Now that’s a different story.
The math is simple: more downtime = less revenue. It seems obvious, sure. But the amount of revenue lost might shock you, so buckle in:
Downtime causes companies to lose an average of $260,000/hour on average.
Who has the time or money for that?
Here’s how those losses break down:
- Labor Costs: Here’s a “fun” fact for you: Fortune Global 500 manufacturing firms are estimated to lose a cumulative 3.3 million hours of labor a year to unplanned downtime. Machinery can unexpectedly go down at any time—and more often than not, it’s when your employees are already clocked in. Machines might be offline, but your employees are still getting paid—even if they can’t do their jobs.
- Production Costs: Strict production schedules and unplanned downtime do not mix well together. Unplanned downtime means less efficient use of resources and even lost production.
- Startup Costs: Getting things going again after unplanned downtime takes resources—it doesn’t just pick right back up where things left off. Machines need recalibrating and processes have to restart. That lost momentum costs time, energy, and money.
- Overhead Costs: Your fixed costs like rent and utilities aren’t put on pause when production stops, but the ROI they deliver sure is when your production team can’t do their job.
- Lost Sales: Downtime can mean you’re not meeting production targets, leading to delayed shipments and unhappy customers. This means lost sales and a temporary glitch taking a bite out of your market share.
Calculate Your Downtime With This Simple Formula
Understanding your downtime costs can be tricky—so tricky that more than 80% of companies can’t accurately calculate their true downtime costs.
Here’s a simple formula: Add up your hourly labor, overhead, and production costs. Then, multiply that by how long your downtime lasts.
(Hourly Labor Cost + Hourly Overhead Cost + Hourly Production Cost) X Downtime Duration = The Cost of Downtime
Let’s say an industrial manufacturing firm experiences a machine breakdown. Here’s how they would calculate the cost:
- Hourly Labor Cost: $500 (This includes the wages of the workers who are idle during the downtime)
- Hourly Overhead Cost: $300 (This includes fixed costs like rent, utilities, etc., that continue to accrue)
- Hourly Production Cost: $700 (This includes the cost of lost production, like materials that can’t be processed)
- Downtime Duration: 2 hours
Now, let’s run the formula:
($500 + $300 + $700) x 2 hours = $3,000 in lost revenue.
So, for a 2-hour downtime period, this firm incurs a $3,000 loss.
Understanding these figures can help them build better strategies for reducing costly downtimes in the future. And a great place to start is strategic staffing.
Strategic Staffing Is Your Ticket to Minimizing Downtime in Industrial Manufacturing
Strategic staffing is your secret weapon to combat downtime in your manufacturing. Unlike traditional staffing, which often focuses on filling vacancies quickly, strategic staffing takes a more holistic and forward-thinking approach. It involves understanding the specific needs of your operation, anticipating future challenges, and deploying skilled professionals in critical areas. And for industrial manufacturing organizations, these roles are material handlers, maintenance technicians, and welders. Skilled workers in these areas are your frontline defense against the costly impact of unplanned downtime.
Strategic Staffing Is Key When Hiring Material Handlers, Maintenance Technicians, and Welders
Material Handlers: The First Line of Defense Against Downtime
Material handlers play a vital role in maintaining the continuous flow of materials and products through your manufacturing process.
By ensuring that the right materials are in the right place at the right time, they prevent bottlenecks that can lead to costly production halts. Efficient material handling also means quicker response times to unexpected demands which reduces the likelihood of disruptions.
Maintenance Techs: The Unsung Heroes Who Keep Your Machines Running
Regular and strategic maintenance is crucial for preventing equipment breakdowns—one of the primary causes of unplanned downtime.
Skilled maintenance techs can identify potential issues before they escalate, ensuring that machinery is not just fixed, but optimally maintained for uninterrupted operations. Proactive maintenance strategies lead to fewer surprises and more predictable production schedules.
Welders: More Than Just Joining Metals
Welders do more than just fuse materials. In industrial manufacturing, their precision work can be the difference between a smooth production line and one that’s plagued with delays.
High-quality welding work ensures the durability and reliability of the machinery and structures, which translates to less time spent on repairs and corrections.
Painting a Picture of Strategic Staffing in Action in Industrial Manufacturing
Let’s say there’s a mid-sized automotive parts manufacturer that frequently faces downtime issues due to equipment malfunctions and material shortages.
By partnering with a staffing agency specializing in industrial manufacturing, they’re able to bring on board skilled maintenance technicians and material handlers on a temporary-to-hire basis. This strategic move allows them to adapt quickly to changing workloads and maintain a continuous production flow.
The result? A 30% reduction in unplanned downtime within the first six months, leading to increased productivity and significant savings on operational costs.
Flexible Staffing Solutions Make You Adaptable to Unpredictable Demands in Industrial Manufacturing
In the story of the mid-sized automotive parts manufacturer, we see a clear demonstration of how strategic staffing, particularly with skilled maintenance technicians and material handlers, can dramatically reduce unplanned downtime. This approach is part of a broader strategy that includes flexible staffing solutions that allow you to be nimbler to the constant shifts and demands of industrial manufacturing.
Here are three highly effective flexible staffing solutions that industrial manufacturers can leverage to remain adaptable while mitigating unplanned downtime:
- Temporary staffing is ideal for peak production periods or unexpected staff shortages. This approach offers rapid onboarding of workers that avoids disruptions in your operations. Most of all, it’s a cost-effective solution that allows businesses to adjust their workforce size without the long-term financial commitments of permanent hires.
- Temp-to-hire positions offer a trial period for both employers and employees. Employers can evaluate a worker’s performance and fit before offering a permanent role, while workers get a chance to experience the company culture. This strategy reduces recruitment and training costs, facilitates smooth transitions to permanent roles, and enhances operational continuity.
- Direct-hire solutions focus on filling permanent positions by directly recruiting top talent for specific roles. This approach is suitable for securing skilled professionals for long-term needs and ensures that companies have the expertise required for continuous operation and growth. Direct hire also strengthens team stability and long-term planning.
Keep Your Production Team Humming With LSI Staffing as Your Strategic Partner
Every second of downtime can have a significant impact on your bottom line—not to mention employee satisfaction, engagement, and retention. That’s where a strategic partner like LSI Staffing comes in to help you reduce downtime to keep your organization healthy and thriving, come what may.
Our expertise is unmatched in addressing the specific challenges of the industrial manufacturing industry, especially in minimizing downtime. We quickly deploy skilled workers like material handlers, maintenance technicians, and welders who are proficient in their trades and quick to adapt to your specific operational needs. Whether it’s responding to a sudden increase in workload with temporary staff or adding a skilled full-time technician to prevent future breakdowns, we’re equipped to meet your needs.
Ready to Maximize Uptime and Downtime-Proof Your Organization?
Downtime in industrial manufacturing can be costly, but it’s not inevitable. With LSI Staffing as your partner, you can significantly reduce downtime and keep your production line moving. Our strategic approach to staffing ensures that you have the right people in the right places, ready to tackle the challenges of your industry.
If you’re looking to reduce downtime, bounce back better and faster, and enhance efficiencies across your industrial manufacturing operation, LSI Staffing is here to help. Contact us today to learn more about our strategic staffing solutions and how we can support your business goals.