In the manufacturing industry one broken part can shut down an entire production line, and if the facility does not have a replacement part available it could spell financial disaster for the manufacturer. This financial disaster costs on average a whopping $260,000.00 per hour. Usually manufacturing plant supervisors and managers keep a detailed inventory spreadsheet of all replacement parts that are on hand and plan for the eventual break down of parts on the line; but there are times when replacement parts are not onsite for various reasons; and when that happens the production line can come to a halt and the financial consequences can be dire. If a single part of set of parts fails it can halt an entire production line, and waiting 1-2 days for a replacement simply is not an option for some manufacturers.
Manufacturing Downtime is Expensive, and Happens Quite Often
A study by Siemens and Senseye reported that 2/3rds of the manufacturers experienced unplanned downtime at least once a month, and depending on your industry that downtime can be extremely expensive.
A small and medium sized business usually averages around $22,000 per hour depending on their scale and output, but other industries can get quite expensive. Here are the numbers from that same study:
Here are the numbers from that same study:
- Automotive Manufacturers: Approximately $2.3 million per hour of downtime
- Semiconductor Fabrication: $1.8 million per hour of downtime*
- General Manufacturing: $260,000 per hour of downtime
- Small and Medium Sized Businesses: Typical Average of $22,000 per hour of downtime
It’s important to note that although the Automotive Plants were the most expensive per hour for downtime, the advent of AI has boosted the value of Semiconductor Fabrication since the time of this study, and the cost for downtime for Semiconductor manufacturers has most likely risen exponentially; and is most likely the most expensive manufacturing sector in terms of cost per hour of unplanned downtime.*
That same study further goes on to show that unplanned downtime has become more and more expensive throughout the years, averaging an increase in costs of downtime to have increased 113% to 319% depending on the industry from 2019 to 2023, and the world’s 500 biggest companies lose approximately 11% of their revenues, or $1.4 trillion annually due to unplanned downtime.
So not only is unplanned downtime at a manufacturing facility becoming more expensive as time progresses, it is also a big unexpected cost factor for these manufacturers; one that should be mitigated as much as possible.
Why is Manufacturing Downtime So Expensive?
Aside from the fact that the manufacturing line itself is offline, and manufacturers can not fully assemble or create their products, downtime at manufacturers is expensive for a few reasons.
- Emergency Parts Premium: Sourcing parts on an emergency basis usually costs 30-40% more on average. This can be due to the parts only being available at select sources which may be further away from the actual facility.
- Idle Labor: While a manufacturer’s line is down, they still need to pay every single operator, technician, support worker, and other workers full wages and benefits while a plant is operating. For plants that run 24/7 and have three shifts the costs add up fast.
- Unplanned Overtime: Once the manufacturer line restarts, lost production needs to catch up, which usually means overtime for workers at 1.5x to 2x labor rates, which can add up.
- Quality Losses: After a production line starts back up, the unplanned stop usually produces higher scrap rates; which equipment needing recalibration and the first batches off the line may not be up to specification, which means they have to be scrapped.
- Customer Penalties: Most manufacturing customers are under contract, and late products often trigger contractual penalties and expedited shipping to customers at the manufacturers expense.
- Risk to Reputation: These same late deliveries can often strain customer relationships, and manufacturers will usually do everything in order to not lose the contract entirely including paying for expedited shipping. Some customers may still cancel their contracts entirely, which negatively affects the manufacturer’s reputation.
What Causes Unplanned Manufacturing Downtime?
Manufacturers have to deal with parts and equipment failure quite often on average 2/3rds of manufacturers experience unplanned downtime due to equipment failure at least once a month. Here are some of the most common causes of unplanned manufacturing downtime:
- Equipment Failure – 42% – Equipment failure is the most common cause of unplanned downtime
- Human Error – 23% – Whether it is employees who have not been trained properly, to new equipment on the line, human error comes in as the second cause of unplanned downtime
- Process Issues – 15% – New processes, or processes that are incorrectly enabled or added to the line
- Supply Chain Disruptions – 12% – This one may be more common now with the current sourcing issues due to geopolitical situations, and the advent of AI
- IT or Software Failures – 8%
How Traditional Parts Sourcing Falls Short
You would think that traditional manufacturing parts sourcing would be relatively easy and most parts would be on hand; unfortunately that is not the case because there has been a shift for manufacturing facilities to run JIT (Just-In-Time-Manufacturing). This is a process where the factory or manufacturing facility keeps inventory low, sand saves millions in storage costs rather than buying and holding spare parts that may sit unused for years. If a part fails and it is out of stock, manufacturers have to source the part from a supplier and wait for standard shipping, which can take 24-48 hours, which means that 1-2 days of production are lost. In these situations it would be smart to use a manufacturing parts courier and delivery service as they can regularly delivery the needed parts within hours and at a much faster rate than a traditional shipping service; which can save your reputation, margin, and wallet.
What Same Day Manufacturing Parts Delivery Looks Like In Practice
The process of using a same day courier or same day delivery service is relatively easy. A crucial part or piece of equipment fails on your line. The first step is to check if you have a replacement part on hand in order to fix the equipment; if you don’t the next step would be to source the part from a supplier. Once the supplier is located you would contact a courier or same day delivery service in the same area that the supplier is located; alternatively you could contact a national courier service with drivers all over. They would give you a quote to pick up and deliver the part directly to the affected facility; once the quote is agreed upon they would pick up the part and deliver it to the plant floor directly with no stops in between, usually within a few hours.
How to Build Same Day Delivery into your Maintenance Strategy
Predictive and Preventative Maintenance Strategies are both strategies that manufacturers use to minimize downtime; but most are missing the vital component of having a same day delivery service in their strategies. Preventive Maintenance usually consists of the following steps:
- Asset Inventory – Listing all equipment, serial numbers, manuals, locations, etc in one place
- Risk Prioritization – Ranking assets by how important they are for daily function and safety
- Schedule Creation – Setting a fixed time interval or runtime hours for check ups
- Standard Procedures – Creating step by step written instructions for cleaning, parts replacement, and inspection
- Track & Improve – Use maintenance software logs to log completed tasks, review costs, and to adjust schedules
Predictive Maintenance is a bit more time intensive because it uses real time data and analytics to track machine health and fix issues only when signs of wear start to appear, here are the steps that it consists of:
- Select Critical Assets – Picking high value machines where unexpected failure costs the most time or money
- Install Sensors – IOT (Internet of Things) sensors are attached and installed to measure heat, vibration, and or pressure to these assets
- Set Baseline Parameters – Set your baseline parameters to let your software learn the normal operating patterns and define any warning thresholds for upcoming failures
- Automate Alerts – Connect your management software to your sensors to create automatic work orders when anomalies happen
- Track and Improve – Review past alerts and tune machine learning models to prevent false warnings and improve baselines and predictability of failures
As you can see both of these maintenance strategies can be effective in the world of manufacturing, but none of them seem to include sourcing parts that are not available. Same day delivery services and couriers should be a vital part of every manufacturer’s maintenance strategy; because if your maintenance strategy fails and your plant is down you need to fix the part or equipment as soon as possible in order to be back up and running; and only couriers can accomplish that for any parts that are not onsite.
What to Look for in a Manufacturing Courier Partner
Not all same day delivery and courier services are made equally; and manufacturers need to find the correct courier service to meet their needs. Ideally you would want couriers that offer the following:
- Same Day/Rush Delivery Capabilities – Your manufacturing line goes down, you need to replace parts as soon as possible in order to get your line back up; which means you would require a courier who can do a rush delivery directly to your factory floor. Some couriers such as Reliable Couriers can also offer a next flight out service if your part is out of driving distance and you need it delivered ASAP.
- National Courier Company – Suppliers for manufacturing parts can be located anywhere in the United States, even obscure cities. Fortunately Reliable Couriers has drivers nationwide and can make sure that your part or equipment gets delivered in the fastest manner possible.
- Large Fleet of Vehicles – Parts and equipment can vary in size, everything ranging from a small part the size of a finger to a pallet or pallets worth of equipment. Picking a courier company that operates sedans, cargo vans, and box trucks makes sure you do not have to search for different services for different parts. Here at Reliable Couriers we have vehicles that range from sedans to box trucks with lift gates, capable of transporting everything from an envelope to pallets up to 10,000lbs.
- Open 24 Hours a day 7 Days a week – Unplanned downtime due to parts and equipment failure can happen at any time of day or night, and on weekends. This is why it is vital to choose a courier service like Reliable Couriers that is open 24 hours a day 7 days a week 365 days a year. This insures that you have support and peace of mind if you experience a failure in your manufacturing facility at any time of day or night.
- Up Front Pricing – Courier services who offer up front pricing, without fuel surcharges or hidden costs make adding them to your maintenance plan easy. You have a line item of what each emergency parts delivery costs you per incident.
- Real Time Tracking – If you need to calculate the total downtime for your line when a part fails and you need to source it, you need real time tracking from your courier partner. With real time tracking you can estimate when to have installers or engineers in your plant in order to fix the affected part.
A Reliable Courier Partner for All Manufacturers
Unplanned downtime is extremely inconvenient and expensive to all manufacturers. Sometimes it can make or break a quarter for certain companies. Luckily Reliable Couriers can make sure that your unplanned downtime is minimized and not a headache. We have a large fleet of vehicles ready to take parts from your supplier to your plant, in a rush manner and on short notice. We are a national courier service with drivers in every major city and state and are open 24 hours a day 7 days a week. We also offer real time tracking and up front pricing, if you’re experiencing unplanned downtime due to a part failure and need a reliable quick delivery service give us a call at 888-415-1781 or simply request a free quote online.
