The Hidden Costs of Downtime in Scrap Processing Operations

Equipment downtime is one of the most disruptive things that can happen at your scrap processing operation. Although experienced operators can be hard to find, even employees can be easier to replace than a piece of equipment that needs a complex repair or a hard-to-find replacement part.

Depending on your needs, it can take weeks to months to replace a scrap logger that breaks down, but the danger to your bottom line is measured in hours. Downtime is actually much worse for the business than it might look at first. Downtime isn’t just lost business, but several other categories of financial loss at once.

The Real Cost of Downtime to Your Scrap Processing Operation

The effects of downtime start immediately, and they get worse with every passing hour. Let’s take a closer look at how that kind of disruption really affects a scrap processing operation and how it works when you add it up.

1. Labor Costs

The first issue is obvious: from the minute your scrap equipment goes down, your scrap yard has labor that keeps getting paid. Your operators might participate in routine equipment checks, documentation, and light maintenance, but they are usually stuck with little or nothing to do without safe, functional scrap equipment.

If business owners aren’t careful, they can end up compounding the problem. If you find yourself scrambling to add overtime hours or find workarounds to continue production, you might be setting yourself up for additional issues in the future. Avoiding downtime in the first place is always the most effective approach.

2. Missed Shipment and Truck Delays

Depending on when it takes place, an hour of downtime can have downstream effects that impact a whole day. If it happens to hit during peak production, it can cause backups that will be difficult to recover from. Likewise, an extended outage can have impacts for a week or more.

3. Mill Contract Obligations

Many a scrap processing operation is built around contracts with a few local mills. These contracts stipulate specific tonnage requirements that keep both your business and the mills running. If your equipment suffers regular downtime, it creates conditions that can undermine your working relationship.

Oftentimes, there’s only a limited number of local mills to contract with, so your business relationships are crucial. When equipment downtime leads to disrupted production, it can lead to a breach of contract. Even when agreements aren’t canceled, the loss of trust and customer dissatisfaction can be serious.

4. Market Price Drops

Mills’ scrap rates are highly sensitive to supply and demand. If your equipment downtime happens to coincide with peak scrap rates, you aren’t just losing money in the present – you’ll also make less in the future. We’ve heard from many customers who struggled with their old non-Aljon equipment, only to finally get it working when a downturn in scrap tonnage pricing cost them the equivalent of days of work.

Loss of Revenue from Equipment Downtime Can Sabotage Your Business

All these situations – and several others besides – can result in a substantial loss of revenue for your company. Often, adding extra hours later can’t make up for all of that initial loss. If you have frequent issues, you can find yourself constantly chasing peak efficiency for your operation but never reaching it.

Choosing the right machine for your job is critical, and proactive maintenance is the other half of the equation. Aljon machines are designed from the ground up to limit downtime. While the average scrap logger/baler can last around 10,000 operational hours at high efficiency, well-maintained Aljon machines can triple that figure.

If there’s ever a problem with your Aljon scrap equipment operation, you’ve got the support you need. You’ll always be able to call the experts who designed and manufactured your machine. All Aljon equipment is made right here in the U.S., with the highest standards of customer care and quality assurance in the industry.

Our domestic manufacturing model means that, unlike the competition, we have the parts you need. And if you need onsite support, you can also contact an Aljon Approved Service Provider. Our commitment to excellence doesn’t end when you buy: from delivery to onboarding and through the life-cycle, we’re here to help.

Your entire scrap processing operation relies on your machinery, so don’t settle for anything less than the best. With more than 60 years of expertise, Aljon has the experience and know-how to optimize your uptime. That makes a difference for you, your team members, your clients, and everyone who depends on you.

Don’t wait until scrap equipment operation is prohibitively expensive, thanks to downtime or costly repairs.