Is Machine Downtime Quietly Affecting Your Manufacturing Gross Margin?

A machine stops for three hours. Production is interrupted, but what happens to the costs?

Are labor hours still being recorded against the job? Is machine burden continuing to accumulate? And can finance distinguish downtime-related costs from actual production costs?

These questions can become important when reviewing job profitability, manufacturing variances and month-end results.

The way downtime is recorded and costed depends on how the ERP system is configured and how production activities are managed.

I’ve put together a short six-page overview highlighting the questions manufacturing finance teams should consider.

How does your organization account for unplanned machine downtime?