DOWNTIME COST AND REDUCTION ANALYSIS

The goal of this paper is to provide a summary of how Swedish manufacturing companies manage the downtime costs of equipment and to further examine how it is minimized. The key findings of the investigation show that the hourly cost of downtime, whether scheduled or unplanned, is fairly high. There is, however, a lack of statistical models capable of tracking the individual costs of downtime events. This deficiency has evidently been shown, since 83 per cent of the businesses surveyed do not have a full model adapted to measure their downtime costs. Moreover, only a few organizations are improving their cost accounting approaches, such as activity-based costing (ABC) and resource utilization accounting (RCA), to assimilate and expose the actual costs associated with scheduled and unplanned stoppages. Still, the general trend of estimation of idle costs assigned to direct labor and reduced power costs. On the other hand, the attempts to reduce downtime events and thus costs were based on maintenance schedule tactics supported by the OEE (Overall Efficiency Equipment) tool as an indicator to confirm improvements. However, the review demonstrates the need for streamlined maintenance strategies by complete efficient maintenance (TPM) on company maintenance systems. The maintenance function of reducing downtime impacts is not well known. Ultimately, the lack of fully developed models for evaluating downtime costs and mechanisms for distinguishing between scheduled and unplanned downtimes are the key reasons for continuing upward cost. As a result, investments would concentrate on areas with fewer cost savings opportunities. As a result, this will affect the production efficiency and effectiveness which in return has its influence on costs and thereby profits margin.