Downtime reduction in a loss scenario

We are often confronted with managers who are under the impression that they shouldn’t spend money on downtime reduction simply because their process is not profitable yet. This supposition is often based on two rather weak assumptions:

• Downtime reduction requires an investment
• Downtime reduction has a poor Return On Investment

Only in very extreme cases are these arguments correct. For the vast majority, both statements are plainly wrong. Nowadays, to continuously improve your process and reduce downtime, methods and tools are available at a monthly fee. Not requiring any significant investment.

Take a look at the case below. This company has:

• a turnover of € 37.75K
• fixed costs of € 27.248K
• variable costs of € 12.248K
• an estimated downtime of 32%