To reduce costs, our customers use Amper Utilization data to first, justify projects before getting started, and then quantify efforts after improvements have been made.
Here's a simple process:
- First you'll want to calculate your cost of production. What are all of your costs per hour, divided by the number of machines?
- Then you'll use utilization data to determine where to improve (typically your highest running machines or bottleneck areas).
- Apply cost of production to the hours being lost in your target area & determine opportunity cost. Example: a machine that runs 24 hours a day for 5 days a week will be available about 6,240 hours in a year. -24 hr/day x 5 day/week x 52 weeks/year = 6,240 hours If it's running at 50% utilization, the company will lose about $124,800 at a $40/hour cost of production). -6,240 hours x 50% utilization = 3,120 hours lost -3,120 hours x $40/hour = $124,800 lost a year
- Now identify improvements to be made and execute! Don't know where to start? Check out some improvement ideas using just utilization data at andRecommended CI Projects Using Utilization DataHave too many opportunities and need help prioritizing? Check outRecommended CI Projects Using Downtime ReasonsHow to Prioritize and Execute on your CI Projects
- Lastly, quantify your efforts and determine how much you've saved - celebrate! With Amper, any project can be quantified. After you make an improvement, use your cost of production to show how much you actually saved. Each sustained minute of increased uptime as a result of an improvement project will equal savings.
To get the most accurate number, you'll want to consider costs for direct and indirect labor. That means beyond just an employee's salary, but additionally: employment taxes, health benefits, and PTO. You'll also want to take into account things like: consumable raw materials, building costs, or monthly payments on rented machinery.
If you don't want to do the math, a conservative estimate is to assume your cost of production is $40/hour. So, every hour a machine is making parts, or not making parts, will cost the business $40 at each machine. If you're running, you're ideally selling that product for a profit, thereby offsetting those costs. If you're down, you're just losing $40/hour/machine.
👉 You can also use downtime labeling to justify improvements before making them. For more information on this, please refer to
-Look at the average hours of downtime before the project & multiply that by your cost of production (discussed in step 3 above).
-Then do the same, after the project. Ensure there is a large enough sample size before finalizing your savings. The rule of thumb is to measure and compare the 30 days before and after the time period of sustained growth.
Example: do not include implementation time in measurements. Only measure 30 days before implementation and 30 days after implementation is stable. If your average utilization was 25% before the improvement, and 45% after the improvement, you can measure how much was actually saved (20%). Use Amper collected downtime hours to see what 20% of your total availability might be. If it's 200 hours/week for example, then your savings could be substantial! -200 hours/week x 52 weeks/year x $40/hour = $416,000