How to Account for Downtime and Loss in NetSuite Manufacturing Processes

Key Takeaways

• Structured downtime tracking provides visibility into unplanned equipment stops, enabling manufacturers to identify patterns and implement preventive maintenance strategies
• Real-time data collection eliminates the delays and inaccuracies associated with manual end-of-shift logging and retrospective reporting
• Using scanner-enabled codes can reduce manual entry and speed up event logging compared to manual dropdown navigation and data entry
• The 5-Yield structure (Setup, Startup, Production, Shutdown, Quality) provides an effective framework for categorizing downtime events
• NetSuite's integrated approach connects shop floor data directly to financial reporting, enabling accurate variance analysis and cost management

Understanding Downtime and Loss in NetSuite Manufacturing

Every manufacturing operation faces two categories of inefficiency that directly impact profitability: downtime and material loss. Understanding the distinction between these—and how NetSuite tracks each—is essential for accurate cost accounting.

Types of Downtime

Planned Downtime includes scheduled maintenance, changeovers between products, and calibration activities. While necessary, these events still consume capacity and require tracking for accurate capacity utilization metrics.

Unplanned Downtime encompasses equipment failures, material shortages, operator delays, and quality holds. These events represent the largest opportunity for improvement because they're often preventable with better data.

Types of Material Loss

Scrap refers to materials permanently removed from production—defective parts, contaminated batches, or damaged components that cannot be reworked.

Waste includes standard processing losses like trim, evaporation, or spillage inherent to manufacturing processes.

Rework differs from loss because materials re-enter production. NetSuite handles rework through separate workflows rather than the Material Loss module, which is a critical distinction many manufacturers miss.

Accurate tracking matters because these costs flow directly into your cost of goods sold, variance analysis, and operational reporting. Without structured capture, your financial statements show aggregate overruns without actionable root cause data.

Leveraging NetSuite Work Orders and Assembly Builds for Downtime Tracking

Work orders and assemblies form the foundation of NetSuite manufacturing. While the base module doesn't include dedicated downtime tracking, the Advanced Manufacturing add-on extends these capabilities significantly.

Setting Up Downtime Categories

Access the Downtime Categories setup in your NetSuite Advanced Manufacturing module to create your tracking taxonomy. Start with high-level categories that align with how operators actually experience production:

• Maintenance: Preventive and corrective equipment servicing
• Equipment Failure: Unplanned mechanical or electrical breakdowns
• Material Shortage: Production halts due to missing components
• Operator Delay: Training, safety incidents, or staffing gaps
• Quality Hold: Production paused for inspection or testing

For each category, create specific reasons that provide granular detail. Machine Breakdown, Tooling Failure, and Sensor Malfunction might all fall under Equipment Failure but require different corrective actions.

Recording Downtime Events

Operators can record downtime in Advanced Manufacturing Data Collection; core fields include:

• Start Time: When the asset became unavailable
• Duration (Min): Total minutes of lost production time
• Downtime Reason: Selected from your pre-configured options
• Asset Name: Defaults to the work order asset if blank
• Employee: Optional attribution for accountability

If you configure scanner codes for reasons/codes, operators can scan to populate entries faster than manual selection instead of navigating dropdowns, significantly reducing logging time per event.

Implementing BOMs and WIP for Loss Calculation

Bill of Materials and Work in Progress accounting work together to track material consumption against expected usage, surfacing variances that indicate loss.

BOM-Based Variance Analysis

Your BOM defines expected material consumption per unit of finished goods. When actual consumption exceeds the BOM specification, NetSuite automatically calculates the variance. This highlights:

• Excess material usage: Components consumed beyond specification
• Yield loss: Output quantity below expected based on inputs
• Standard vs. actual cost differences: Financial impact of material inefficiency

The WIP and Routings module enables mid-process tracking, capturing costs associated with defects and rework before final assembly.

Recording Material Loss Events

Material loss tracking follows a similar workflow to downtime. From the same data collection screen, access the Material Loss section and enter:

• Time: When the loss occurred
• Loss Quantity: Units scrapped, wasted, or damaged
• Loss Reason: Selected from configured categories
• Asset Name: Equipment associated with the loss
• Employee: Person recording the event

Common Material Loss Categories include:

• Standard Processing: Expected trim, evaporation, or setup scrap
• Shop Floor Loss: Handling damage, contamination, or operator error
• Quality Rejection: Material failing inspection criteria
• Spoilage: Time-sensitive materials exceeding shelf life

Each loss event adjusts inventory and flows into manufacturing cost management reports, providing clear visibility into the financial impact of waste.

Configuring NetSuite for Capturing Labor Cost and Routing Losses

Labor represents a significant portion of manufacturing cost, yet many organizations track only direct production time. NetSuite's routing capabilities enable granular capture of how labor hours are actually spent.

Routing Step Configuration

Routings define the sequence of operations required to complete a work order. Each step can capture:

• Setup Time: Preparation before production begins
• Run Time: Actual production activity
• Teardown Time: Cleanup and changeover after completion
• Queue Time: Waiting periods between operations

When operators log time against routing steps, planned vs. actual variances surface automatically. A routing step budgeted for 2 hours that consistently takes 3 hours indicates a bottleneck requiring investigation.

Labor Loss Categories

Beyond direct production time, consider tracking:

• Rework Labor: Time spent correcting defects
• Idle Time: Operators waiting for materials, equipment, or instructions
• Indirect Labor: Maintenance, cleaning, or administrative tasks charged to production

Advanced Manufacturing supports recording labor against operations using Labor Codes in the same Data Collection flow, enabling precise attribution of costs to specific process steps rather than aggregate work order totals.

Advanced Scheduling and Capacity Planning to Minimize Downtime

Reactive tracking tells you what went wrong. Proactive scheduling prevents problems before they occur. NetSuite's planning capabilities help manufacturers optimize production to minimize downtime opportunities.

Capacity Utilization Analysis

Effective scheduling starts with understanding your current capacity utilization. Key metrics include:

• Overall Equipment Effectiveness (OEE): Availability × Performance × Quality
• Machine Utilization Rate: Actual production hours vs. available hours
• Throughput: Units produced per time period
• Cycle Time: Duration from start to finish for each unit

NetSuite dashboards can display these KPIs in real-time, drawing from your downtime and loss data to calculate current performance levels.

Preventive Maintenance Integration

Downtime data reveals patterns that inform maintenance scheduling. If a specific machine shows increasing unplanned downtime, you can schedule preventive maintenance before a catastrophic failure occurs.

The workflow is straightforward:

1. Generate monthly "Downtime by Asset" reports
2. Identify assets with increasing failure frequency
3. Schedule maintenance during planned downtime windows
4. Track whether maintenance reduces subsequent unplanned events

Downtime trends can help you prioritize preventive maintenance and measure whether it reduces unplanned events over time within the first six months.

Custom Workflows and Automation for Reporting Downtime and Losses

Manual reporting creates delays between events and visibility. NetSuite workflows automate notifications and approvals, ensuring stakeholders receive timely information about production issues.

Automated Alert Configuration

Create workflows that trigger notifications based on downtime or loss thresholds:

• Immediate alerts: Email production managers when downtime exceeds 30 minutes
• Escalation workflows: Notify plant directors if issues remain unresolved after 2 hours
• Daily summaries: Automated reports summarizing previous day's downtime events

Custom Record Implementation

For manufacturers requiring tracking beyond standard fields, custom records extend NetSuite's capabilities. Common customizations include:

• Root cause analysis fields linking to corrective actions
• Photos or attachments documenting equipment conditions
• Multi-level approval workflows for high-value scrap events

The NetSuite automation capabilities eliminate manual notification processes while ensuring accountability for addressing production issues.

Analyzing Downtime and Loss Data with NetSuite Saved Searches and Reports

Data collection without analysis is just overhead. NetSuite's reporting tools transform raw downtime and loss events into actionable intelligence.

Building Effective Saved Searches

Saved searches provide flexible, real-time reporting on manufacturing data. Essential downtime searches include:

Downtime by Asset (Monthly)

• Results: Asset name, total downtime hours, event count
• Filters: Date range, location, downtime category
• Use case: Identifying chronic equipment problems

Downtime by Reason (Weekly)

• Results: Reason code, frequency, total duration
• Filters: Date range, asset group
• Use case: Prioritizing improvement initiatives

Material Loss Trend Analysis

• Results: Loss reason, quantity, cost impact, period-over-period change
• Filters: Item category, date range
• Use case: Tracking waste reduction progress

Dashboard Configuration

SuiteAnalytics enables visual dashboards that present KPIs at a glance. Effective manufacturing dashboards include:

• OEE gauge: Current performance vs. target
• Downtime Pareto chart: Top causes ranked by frequency
• Cost variance trend: Actual vs. standard costs over time
• Scrap rate by production line: Comparative performance metrics

These visualizations enable management to identify problems quickly and drill into underlying data for root cause investigation.

Best Practices for NetSuite Manufacturing Downtime Management

Implementation success depends on more than technical configuration. Operational discipline and organizational alignment determine whether data collection translates to improvement.

Start Simple, Then Expand

Resist the temptation to create exhaustive reason code taxonomies on day one. Organizations that begin with 5-7 high-level categories and expand based on actual patterns achieve better adoption than those implementing 50+ codes that confuse operators.

Enforce Real-Time Logging

End-of-shift data entry from memory introduces significant inaccuracies. Operators forget events, estimate durations incorrectly, and misattribute causes. The solution:

• Deploy barcode scanners at each workstation
• Train operators to log events immediately when they occur
• Audit data entry timing as part of quality reviews

Close the Feedback Loop

Operators disengage when they perceive data collection as an administrative burden without purpose. Demonstrate value by:

• Sharing weekly downtime trends with shop floor teams
• Celebrating improvements driven by operator-reported data
• Implementing corrective actions based on identified patterns

When operators see maintenance scheduled based on their downtime reports, engagement increases dramatically.

Conduct Regular Reason Code Reviews

Schedule monthly reviews of your downtime and loss categories. Look for:

• "Other" accumulation: High "Other" usage indicates missing reason codes
• Unused codes: Codes never selected may reflect implementation assumptions rather than operational reality
• Splitting opportunities: Generic codes that could benefit from more specific options

This iterative refinement ensures your taxonomy matches actual production conditions.

Why Anchor Group Is Your Ideal Partner for NetSuite Manufacturing

Configuring NetSuite for effective downtime and loss tracking requires more than following documentation. It demands understanding how manufacturing operations actually work—and translating that knowledge into system design that operators will use.

Anchor Group brings deep manufacturing expertise to NetSuite implementations. As an Oracle NetSuite Alliance Partner with specialized experience in wholesale distribution and manufacturing, the team understands the nuances of work orders, BOMs, WIP accounting, and shop floor data collection.

What sets Anchor Group apart:

• 35+ pre-built apps for SuiteCommerce and NetSuite customization
• Proven track record with manufacturers implementing WIP and routings
• Midwestern practicality: Solutions that work in the real world, not just demos
• Ongoing support: Managed services that evolve with your business

Client Tripp Perkins noted that Anchor Group consultant "Mitch has been super helpful in getting us back on track with NetSuite customizations/implementation of WIP/Routings. He is super knowledgeable, and it didn't take long to pick up on our processes and understand our manufacturing processes."

For manufacturers ready to transform vague production reports into precise operational data, Anchor Group offers a free consultation to discuss your specific requirements.

Frequently Asked Questions

What are the main types of downtime a manufacturer should track in NetSuite?

Focus on categories that drive different corrective actions: Maintenance (scheduled and unscheduled), Equipment Failure, Material Shortage, Operator Delay, and Quality Hold. Within each category, create specific reason codes that provide enough detail for root cause analysis without overwhelming operators with options. Most successful implementations use 5-7 top-level categories with 3-5 reasons under each.

How can NetSuite automatically calculate the financial impact of material scrap and rework?

NetSuite's cost accounting automatically values material loss events based on your item costing method (standard, average, or FIFO). When operators record loss quantity and reason, the system multiplies quantity by unit cost and posts the variance to appropriate GL accounts. Rework costs require separate tracking through work orders rather than the Material Loss module, as rework represents additional labor and overhead rather than permanently lost material.

What NetSuite features are most effective for improving labor utilization in manufacturing?

The WIP and Routings module provides the foundation for labor tracking. Configure routing steps with budgeted setup, run, and teardown times, then compare actual labor hours against these standards. Significant variances indicate bottlenecks, training needs, or scheduling inefficiencies. Advanced Manufacturing extends this with real-time labor data collection via tablets or scanners, eliminating timesheet-based reporting delays.

How often should manufacturing downtime and loss data be reviewed in NetSuite?

Establish a tiered review cadence: daily exception alerts for immediate issues (e.g., any downtime event over 30 minutes), weekly trending reports for supervisors, and monthly deep-dive analysis for continuous improvement teams. The SuiteAnalytics dashboards support real-time monitoring, while saved searches deliver scheduled reports automatically to stakeholders.

Is it possible to integrate external machine data into NetSuite for real-time downtime tracking?

Yes, though this requires custom integration work. NetSuite supports REST APIs and SuiteScript that can receive data from IoT sensors, PLCs, or third-party middleware platforms. The integration captures machine state changes (running, stopped, faulted) and automatically creates downtime records with precise start times and durations. While more complex than manual logging, automated capture eliminates operator data entry entirely and provides second-by-second accuracy for high-value equipment.