Breakdown Blues

 

Itís a common enough story that can make grown men and women cry. A truck breaks down and the load is ruined. I personally saw a load of lettuce coming east from California after 10 hours in the dessert sun (after the reefer quit). Pretty disgusting. Even the rabbits werenít interested!

 

Thatís half of the story for customers. Another truck had a load of colorant for plastic (this is a plastic resin containing concentrated color. It is mixed with the plastic pellets for injection molding of colored products). This truck had a minor failure that resulted in a roadside breakdown. Unfortunately the driver was in a dead cell area. He used CB relays to get word to a repair facility.

 

His JIT (Just-in-time, where you have to deliver a component of a product at a specific time) window closed and the missing shipment shut the manufacturing process down. The problem for the shipper was that it was the first shipment of a $40 million contract for a new customer in a new industry. Ouch!

 

Breakdowns are not only not ok but there are costs way above the repair costs. In fact in some industries the Ďotherí costs are 10-100 times greater than the repair costs.

 

The costs of a breakdown could be considered like an iceberg. Above the water line are the repair costs including parts, labor and outside vendors. Below the water line (90% of the iceberg) are the Ďotherí costs.

 

Here is a mental exercise. Take the last few breakdowns and make some educated guesses. If you do, you may be surprised.

 

Cost of Breakdown†† What is the total cost for a couple recent breakdowns?††††††††††††††††††††††

 

ITEM††

COSTS FOR BREAKDOWNS

Operator or driver (crew) idle time††††††††††††††††††††††††††††††††

 

 

 

 

 

 

 

Cost of lost production or lost revenue from having the unit out of service†††††

 

 

 

 

 

 

 

Extra travel time for mechanic††††††††††††††††††††††††††††††

 

 

 

 

 

 

 

Extra repair time due to field conditions†††††††††††††††††††††††††††††

 

 

 

 

 

 

 

Cost of disruption to other activity that is left

 

 

 

 

 

 

 

Extra costs due to core damage†††††††††††††††††††††††††††††††††

 

 

 

 

 

 

 

Extra damage of associated parts††††††††††††††††††††††††††

 

 

 

 

 

 

 

Extra costs of outside vendor parts and labor††††††††

 

 

 

 

 

 

 

Spoilage of product††††††††††††† †††††††††††††††††††††††††††††††††††

 

 

 

 

 

 

 

Delay penalties

 

 

 

 

 

 

 

Refunds of shipping costs

 

 

 

 

 

 

 

Loss of goodwill††††††††††††††††††† †††††††††††††††††††††††††††††††††††††††††††††††

 

 

 

 

 

 

 

Cost of overhead associated with original assignment †††††††††††††††††††††††††† †††††††††††††††††††††††††††††††††††††††††††††††

 

 

 

 

 

 

 

 

Total costs associated with breakdown

 

 

 

 

 

 

 

†††††††††††††††††††††††††††††††††††

 

The amount of money can be staggering. A chart like this is one of the best arguments to improve the PM effort, buy a computerized PM system or get training for your shop employees.

 

 

Joel Levitt, President Springfield Resources

800-242-5656JDL@Maintrainer.com