Tangible Benefits from Elimination of Breakdown

[Manoj Mathur]

How shall we calculate TANGIBLE Benefits or SAVING of a machine if we Reduce / Eliminate Break Downs.

I shall elaborate further, We are getting frequent breakdown of a Furnace. After a lot of brainstorming and using Root Cause Analysis we found out the Root Cause was one chain link which we have replaced and now Furnace is running O.K. Now If I want to know How much our Team has saved How will I calculate the benefits.
Regarding data, I shall further say that before this modification, We were getting B/D once in THREE (3 ) Months time which is now completely eliminated.
Could you please enlightened me.

Regards,

Manoj Mathur

[sathis]

OEE , MTTF, MTTF - can be used for calculating this.

sathis

[sathis]

OEE , MTTF, MTBF - can be used for calculating this.

sathis

[Manoj Mathur]

Oh !!! How !!!

Beacuse OEE is expressed in Percentage ( 91% , 88.9%, 94.5% etc.) and MTBF and MTTR are expressed in Time Units. 4.5 Days, 5.6 Months or 6.8 hours.

None of the above are expressed in Money Terms ( $$$$)

[sathis]

OK. In 'Money' terms means
Manufacturing cost' calculations,
like hourly rate for producing components,
labor cost,
Spares cost, etc.

Here is one link on True downtime cost (http://www.downtimecentral.com/tdc.htm)

[wmarhel]

If downtime occurs take those dollars that are lost from:

1) Wages paid to employees during the time they are not producing

2) Any overtime wages paid to make up for the downtime

3) Materials lost due to the breakage/downtime (include rework costs of those materials if applicable)

4) Costs for replacement parts, include expedited shipping charges if utilized (next day air for example)

5) Opportunity costs for those parts which would have been produced during the downtime period and then sold

Those are just a few of the readily identifiable costs. If the customer "suffered" due to delayed or late shipments, you start to get into those intangible costs.

Wayne