No matter the industry or size, every business has standard costs that must be considered for the company to run smoothly and cost effectively. One of the most detrimental costs businesses face is unreliability. In the mining industry, unreliability directly affects production and can cost businesses hundreds of thousands each year.
In a depressed economic climate its important to focus on productivity and avoid unreliability.
There are a few key equations that must be considered in order for businesses to run smoothly. In addition to countless other costs, some of the most basic equations are profit and maintenance costs.
These calculations are the foundation of many other costs, including unreliability.
Profit is a simple calculation that is found when you subtract total costs from total revenue. It is essential for all businesses to know their profit, so they can allocate and adjust funds properly.
Maintenance costs vary based on business and industry, but must be considered for optimal cost efficiency. Calculate maintenance costs by adding maintenance labour cost, and maintenance material cost.
Cost of unreliability
There are numerous costs of unreliability, both fiscal and non-monetary. Unreliability effects a business’ operating costs including maintenance and profit, in addition to others.
In the mining industry, unreliability has a greater cost than just monetary costs.
Unreliability cost #1: excess maintenance
Machinery that can’t be counted on to work 100% of the time it is needed is considered unreliable.
If your machinery isn’t reliable and in good working order, it will require more maintenance than machinery that is reliable. Because of its undependable nature, unreliable machinery will incur more maintenance costs. These costs will decrease revenue and increase maintenance costs, resulting in a lower profits and higher expenses for your business.
Schedule regular, routine maintenance for your machinery to avoid paying for excess maintenance.
Unreliability cost #2: loss of jobs & contracts
Unreliability of mining machinery can lead to a loss of jobs or contracts. If machinery cannot be trusted to function at all times, clients will see machinery as undependable, which will affect the reputation of your business. Clients will find a more dependable, safer alternative if you can’t provide them with trustworthy machinery.
Machinery should be ready for use at all times to maximise user confidence and loyalty.
Unreliability cost #3: equipment replacement
When your machinery is unreliable, you are likely to incur costs of equipment replacement. Equipment replacement is not cheap, especially in the mining industry, so it is important to take good care of your machinery. There are benefits to maintaining or replacing machinery, but consider the costs and benefits for your business.
Often equipment replacement costs far exceed the total costs of routine maintenance, so take preventative measures to avoid losing money.
Unreliability cost #4: sacrifice of quality & safety
Unreliable machinery compromises the quality of your work and safety of your business and clients. If machinery is unreliable, it is more likely than reliable machinery to malfunction, break down, and experience other glitches or problems.
Quality and safety risks can have huge negative impacts on your business, both financially and otherwise. Unreliability places your clients and your staff in danger. It also can increase costs if something is to go wrong with machinery while being used by a client or member of your business.
Additionally, unreliable machinery lowers the quality of the work your machines produce. This is likely to lead to a poor result and less repeat business.
Don’t let unreliable machinery keep you from providing the highest quality, safest mining experiences possible.
How to avoid unreliability
Unreliability can take a toll on your business; affecting your profits, maintenance costs, future success, and even safety.
Keep your machinery reliable by implementing a machinery maintenance schedule, as this will help you avoid negative expenses and undependability.