Determination of the financial impact of machine downtime on the Australia Post large letters sorting process

Fox, James P., Brammall, Jadd R., & Yarlagadda, Prasad K. (2008) Determination of the financial impact of machine downtime on the Australia Post large letters sorting process. In Yarlagadda, Prasad K. & Gudimetla, Prasad V. (Eds.) 9th Global Congress on Manufacturing and Management, 12-14 November 2008, Gold Coast, Australia.

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Abstract

Machine downtime, whether planned or unplanned, is intuitively costly to manufacturing organisations, however is often very difficult to quantify. Costing processes are rarely undertaken within manufacturing organisations. It has previously been estimated that 80% of industrial facilities were unable to accurately cost downtime, with many facilities underestimating the total cost by a factor of 200-300% (Crumrine and Post 2006). It was also acknowledged that the lack of practical guides has hindered costing procedures of any nature being implemented more readily (Dale and Plunkett 1995). Models that did exist rarely considered more than a subset of the costs identified elsewhere, leading to overly conservative estimations. In addition, because cost definitions are not consistent, methodologies for evaluating and quantifying individual costs have not previously been adequately defined. The work outlined in this paper has aimed to develop the first comprehensive methodology for determining the cost of downtime, with particular application to the Australia Post's automated mail processing machines. The method presented may be applied to any manufacturing environment which would benefit from a more complete understanding of the magnitude of the cost of machine or process downtime.

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ID Code: 18239
Item Type: Conference Paper
Refereed: Yes
Keywords: Cost of Downtime, Mail Processing, Australia Post
ISBN: 9780980582703
Divisions: Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Past > Schools > School of Engineering Systems
Copyright Owner: Copyright 2008 GCMM Board
Copyright Statement: Reproduced in accordance with the copyright policy of the publisher.
Deposited On: 24 Feb 2009 23:17
Last Modified: 29 Feb 2012 13:46

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