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Infra-asset downtime cost – Is it really measurable?

Machine breakdown is the most undesirable thing to happen to any infra-asset intensive organization. Expensive by far, most of us measure the downtime cost as a combination of the expenses involved in its repair and those paid to the asset operator. These being the direct and most visible cost are immediately taken into account as we take a mental note of the loss being suffered with respect to the downtime.

What about the indirect costs? And they not worthy of calculation or are they too cumbersome to be figured out?

Asset downtime- The Indirect Costs

Often immeasurable and much heavier than the direct costs, the indirect costs of asset downtime weigh down the asset owners by their magnitude. As they exist in a disguised form and are extremely difficult to be statistically evaluated, they also tend to be neglected by the industry. The irony is that they have a greater negative impact on organizational performance than the direct costs.

Let us understand a few of them.

1. 1. Foremost, asset breakdown has an opportunity cost associated to it. The opportunities lost which could otherwise be won influence the profit margins largely and also does harm to the company goodwill.
2. 2. Productivity loss during the days when the asset would remain dysfunctional hampers the overall output and sales volume.
3. 3. In case the organization decides to rent an alternate asset for the interim period, the rentals paid for it also add to the list of indirect expenses.
4. 4. Frequent breakdowns lead to heightened rate of depreciation. A well known evil, depreciation feeds upon the machinery’s quality of performance and lifespan, and can thus be counted as the most unfavourable indirect cost.
5. 5. Delay in project execution, an indirect cost, can cost the organization its reputation and a penalty for delay.

The above costs, though hidden are multi-fold when compared to the direct costs and have a much larger impact on company’s overall performance.

Can downtime be reduced?

Can the above costs be saved? Would it mean saving a lot of money, higher profits and improved reputation? Yes, with predictive and preventive maintenance these can be achieved. The steps involved include:-

1. 1. Active monitoring of asset running through counter-logs
2. 2. Maintaining service check sheets to trace the service requirement of every asset
3. 3. Keeping a check on statutory requirements of every asset through basic check sheets
4. 4. Ensuring on-time maintenance of asset to keep them in good condition
5. 5. Predicting an impending breakdown by tracking asset performance
6. 6. Tracking component level expenses to check for irregularities
7. 7. Inventory management to ensure instant availability of spare parts
8. 8. BI reports to look deeper into all asset parameters

TappetBox – Your customized solution

TappetBox, an infra-asset management solution features all the above benefits and much more. An easy to use cloud based application; it has been designed keeping the Indian asset environment in mind. It caters to the tiniest aspect of your asset, identifies glitches in time and ensures that they enjoy good health.

Now you can expect optimal asset performance throughout its lifecycle and ensure that you minimize the downtime costs- both direct and indirect. To explore the possibilities further, click here.