Every business owner is consistently seeking ways to achieve maximum revenue while reducing production costs. Running a successful business means keeping your team on track, thereby delivering high-quality products or services on time, every time.
If you’re looking to enhance employee productivity, it’s crucial to reduce idle time. But what exactly is idle time, and why is it significant to business growth? Idle time is the amount of time the human resources and machinery spend not working. In simple terms, it refers to the unproductive time of a company’s machines or employees; time that directly affects business revenue and costs.
Idle time is equivalent to the wages or salaries you pay your workers when they haven’t produced anything. Idle time can occur in an organization as a result of machinery malfunction, management issues, or factors outside of the company’s control such as inclement weather.
What are the Causes of Idle Time in a Business?
The Harvard Business School found that at least 78% of employees have involuntary idle time weekly. This, according to the survey, costs employers at least $100 billion every year, increasing total cost of production.
Idle time in an organization can manifest in many ways, such as waiting time or downtime, resulting in revenue loss. Business owners and managers should take steps to determine the cause of idle time amongst their team members and production assets.
Here are some of the most common causes of idle time:
Poor planning by key decision-makers in the company can decimate production efficiency. Poor decision-making at the administrative level can result in idle time in every level of the business.
For example, a business owner might experience an uptick in employee idle time if they hire more team members in anticipation of increased demand—only for the business to encounter record low sales.
Similarly, during economic depressions, managers often lay off some of their workers to reduce idle time. When a company is facing low demand, its production rate goes down, and so should the number of employees.
Issues in the Line of Production
Production-related issues can also result in idle time. For example, when a production facility is waiting for raw materials, most workers and machines will remain idle. The longer it takes to get the right tools for production and the raw materials, the more time wasted.
Other production-related issues that may cause idle time include:
- Unforeseen breakdown of company machinery
- Power failure
- Shortages of raw materials
- Late or missing production instructions
Market dynamics or unforeseen changes in market forces, such as a fall in demand for a product or emergence of new competitors, can also result in idle time in a company. In the case of a fall in product demand, companies must lay off some workers to lower their production rate and to minimize production costs.
In most cases, idle time in a company may be the result of:
- Economic recession that leads to a fall in demand for the final product.
- Worker strikes that force the company to delay production.
- A seasonal fall in demand for a product and cyclical fluctuations that force the company to reduce production.
You can also classify the causes of idle time as normal or abnormal. For example, whenever there is a machine breakdown in a company, all production must stop, resulting in abnormal idle time. However, when workers go for a planned lunch break to overcome work fatigue, it would be categorized as normal idle time.
How You Can Prevent Idle Time in Your Company
There is a lot you can do to minimize machine and employee idle time in your business. First, you must come up with a clear plan of what you want workers to do at every stage of production. Provide clear instructions before production begins so that employees know what they need to do at the onset.
The following tips can be used to further prevent idle time:
- Enforce time management in your organization: Your employees should always be punctual by reporting to work on time.
- Work scheduling: When product demand goes up or workload increases, you can create work schedules to complete the project in stages. Assign each team a portion of work to do and another once they finish.
- Minimize administrative tasks: Idle time can result from too many administrative tasks, like tracking and approvals. Eliminate or mitigate administrative tasks that delay production in your business.
- Create a Standard Operating Procedure (SOP): This is important if your employees handle routine tasks.
- Have an extra machine: You can invest in a standby machine to help in case of a technical or mechanical hitch.
- Have a preventive maintenance plan: This is true for all your machines and other useful assets. Always ensure all the tools and machinery your employees need function optimally.
- Downsize your workforce: Reduce the number of workers during low-season.
- Improve information flow: It should not take ages for employees in your organization to get the vital information they want. Reduce the number of departments or managerial levels that information passes before reaching your employees.
The most important thing any manager can do to reduce idle time is to identify its causes. If you are operating a production firm, instruct the head of departments and supervisors to convey information to employees on time.
Implement proper staff planning to reduce laxity in production processes. Keeping human resources and machinery in proper working conditions is the best remedy for minimizing idle time.
Use Azuga to Reduce Idle Time
Azuga offers innovative software you can use to track employee productivity and reduce idle time. With tracking software, you can monitor machine usability and reduce the tear and wear of machines, which will always account for idle time. If you are in the transport business or want to minimize drivers’ idle time, you can use Azuga to track your fleet, plan more efficient routes, and ensure raw materials and client merchandise are delivered on-time.