Breakdown Blues
It’s 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
That’s 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 ‘other’ 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 ‘other’
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?
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COSTS FOR BREAKDOWNS |
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Operator or driver (crew) idle time |
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Cost of lost production or lost revenue from
having the unit out of service |
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Extra travel time for mechanic |
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Extra repair time due to field conditions |
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Cost of disruption to other activity that is left |
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Extra costs due to core damage |
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Extra damage of associated parts |
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Extra costs of outside vendor parts and labor |
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Spoilage of product |
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Delay penalties |
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Refunds of shipping costs |
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Loss of goodwill |
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Cost of overhead associated with original
assignment |
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Total costs associated
with breakdown |
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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
800-242-5656 JDL@Maintrainer.com