Unplanned downtime can cost manufacturing plants billions of dollars each year. These costs include both tangible and intangible expenses. Knowing the true costs of downtime is crucial to making informed plant maintenance decisions. Moreover, identifying some of the common causes of unplanned downtime allows organizations to act proactively rather than reactively.
In this article, we will explore some of the common causes ofunplanneddowntime and the associated costs. We will conclude with a discussion of 3 strategiestoprevent unplanned downtimethrough plant maintenance.
>The Role ofPlant Maintenanceto Prevent UnplannedDowntime
Theprimary goal of any maintenance organization is to maximize asset availability and efficiency.Yet downtime occurs all too frequently. These incidents can have adevasting impact on an organization’s productivity and bottom line.According to a Deloitte report, poor plant maintenance strategies can reduce a plant’s productive capacity by 20%. Moreover, unplanned downtime costs industrial manufacturers some $50 billion each year.
For food and beverage plants, downtime can be especially costly. Production processes are generally highly precise and rely on sophisticated equipment and technologies. In some plants,equipment may run 24 hours a day, every day. In an increasingly competitive industry with tight margins,every second counts. Not many plants can foot the bill for theestimated $30,000 per hourthat unplanned downtime can cost.
>TheObvious and Hidden Impacts of Downtime
Downtime is highly visible. Equipment failure and breakdowns bring production to a halt. When machines are down, operating costs continue to accrue but no value is being generated. There are two different categories of downtimeinmanufacturingplants: planned and unplanned.
Planned downtimeinvolvesscheduled stops in production processes typically for scheduled maintenance or product changeover. Unplanned downtime occurs when there is an unscheduled disruption to production processes. For example, equipment failures, labor shortages, or running out of material.
Planned downtime such asperforming routine maintenance as part of a preventative maintenance programiscostly enough. But it is unplanned downtime that produces the largest expenses.There are both tangible and intangible costs associated with downtime.
Tangible costs are the apparent and physical consequences of downtime. They include:
- Lost production. When your machines are down you are not producing.Manufacturingplants face tight production schedules and downtime can be particularly devastatingif orders can’t be met.
- Waste. Downtime can lead to significant waste. Perishable product ingredients can spoil. Moreover, increased inventory holding costs can add up quickly.
- Labor costs. Reduced downtime increases your production levels without a corresponding increase in your labor costs. But when production decreases due to downtime while labor costs remain fixed it quickly eats away at your bottom line.
- Reduced capacity. Manufacturing plants for variable demand products typically run under capacity to allow them to ramp up production if there is a sudden spike in demand. But when there is a downtime event, lost capacity prevents them from taking advantage of these key revenue opportunities.
Intangible costs are those that are less obvious and difficult to calculate. Some examples of intangible costs include:
- Stress and loss of job satisfaction. Downtime places a significant amount of stress on both production and maintenance teams. For maintenance professionals, they are constantly responding to emergencies and are forced to rush to make repairs. This results in lost productivity.
- Loss of responsiveness. When unplanned downtime occurs,technicians are forced to prioritize these issues. They are less responsive to routine maintenance tasks and service requests.
- Loss of creativity and innovation. Withteams inconstantreact mode, there are fewer opportunities for the type of innovation that helpsto optimize equipment reliability.
Knowing yourtrue costs of downtimeis an important component of developing an effective plant maintenance strategy. If you can quantify downtime, you can determine which preventive maintenance measures to take to avoid breakdowns.
>Causes of Downtime thatPlantMaintenance OperationsCanReduce
Equipment breakdowns happen. Understanding some of the common causes of downtime can help your organization to plan and implement effective plant maintenance strategies to mitigate both the frequency and severity of downtime.
>Failing to Perform Preventive Maintenance
Preventive maintenance involves the routine maintenance of equipment to keepitrunningandavoidbreakdowns. This seems simple enough, yet many organizations neglect to perform preventive maintenance.Thereare several reasons why organizations fail to implement an effective preventative maintenance program.Mostof the reasonscome down tohaving the rightdata andstructuredprocessesto effectively plan and maintain the program.
>Underutilizing SAP PM
Organizations often underutilize the features of SAP Plant Maintenance. Employees are forced to manually input data. Stakeholders lack real-time access to complete and reliable data. They are unable to make informed decisionstoeffectively plan and manage their plant maintenance processes.Optimizing SAP PM with automationcan help plants toimprove the planning and scheduling of preventive maintenanceto improve equipment uptime.It can also improve data to be able to make informed decisions around optimal cadence ofpreventive tasks to minimize equipment planned downtime for maintenance.
>Improper Operation of Plant Equipment
While machine operators receive extensive training on operating procedures, troubleshooting, and safety, human error can be a factor. Moreover, an operator may be asked to use a machine that he or she has not been adequately trained for. For instance, an employee may need to shift responsibilities to overcome staffing shortages. Not only is this potentially dangerous, but the improper use of machinery can result in costly breakdowns.
>Break-Fix Mindset
Manufacturingplants are under major pressure to produce. Maintenance teams are stretched thin,with most of their time running fromone urgent situation to the nextunscheduled repair. These pressures often result in technicians making limited stopgap repairs until things calm down. Since things never calm down, the temporary solution eventually fails often requiring more significant and costly repairs, as well asdowntimethatdisruptsproduction.
This also results in maintenance teams being perceived as the“fix-it”teams. This break-fix mentality can become soingrained that it becomesdifficult to schedule and sustain momentum ona preventive maintenance programto optimize equipment uptime.The entire organization must be on board to shift out of the break-fix mindset.
>Too Much Preventative Maintenance
Conducting too muchpreventivemaintenancemaylead to failure.For some equipment, each time you open upthemachine to maintain it, you create risks, the cumulative effect can lead to breakdowns.Consider condition-monitoringand sensor technologies to reduce the interventionsonthis type of equipment.
3 Plant MaintenanceStrategies to PreventUnplannedDowntime
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1. Double-down on YourPreventative Maintenance Program
Preventive maintenance focuses on identifying trouble spots and conducting planned maintenance before there is an issue. To scale and manage your preventative maintenanceprogram you need to leverage the right technology. For instance, a plant maintenance planning and scheduling solution that integrates with SAP Plant Maintenance automates maintenance routinestoefficiently allocateresourcesand coordinate preventive maintenanceactivitiesaround production schedules.
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2. Monitor Equipment in Real-Time
Predictive maintenance takes plant maintenance to another level. Using innovativeIndustry 4.0 technologiesorganizations can monitor their assets in real-time. Smart technologies collect data and automatically analyze it to make predictionswhen the asset will likelymalfunction, giving teams time toplan repairsincludingshiftingproduction to other machines to avoid waste and production delays.
The potential savings from predictive maintenance processes are massive. According to a report from theMcKinsey Global Institute on the Internet of Things, predictive maintenance can lead to savings between $200 billion and $600 billion for manufacturers by 2025.
AReliability-centered maintenance (RCM) approachhelps organizations tominimizeunplanneddowntimeat the lowest possible cost. RCM works by identifying the conditions that could potentially result in downtimefor each asset. And then, thefailure modalitiesare prioritizedfrom a maintenance cost standpoint.This allows plants to make informed decisions about investments in smart technologies. For example, determining whether it makes sense from a cost perspective to monitor equipment with sensors,perform routinepreventivemaintenance, orjustbe preparedto replace theequipment.
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3. A Cultural Shift
Having aculture that recognizes and emphasizes the importance ofpreventiveplant maintenanceis equally as important as leveraging the right plant maintenance technologies. Improving plant maintenance processes to prevent downtime starts at the top. Management must make a conscious effort to transition from reactive plant maintenance strategies to proactive strategies such as preventive and/or predictive maintenance.This includes ensuring that the entire company is on board, clearly defining roles, and empowering maintenance teams through user-friendly digital technologies.
>How Sigga Can Help
Sigga is an SAP-certified global software company that provides industry-leading Enterprise Asset Management Software solutionsfor asset-intensive industries. Sigga has approximately 20 years of experience with SAPEnterpriseAssetManagement, industrial maintenance, warehouse,and inventorysolutionsto digitally transform traditional workflows.
Sigga’s Planning and Schedulingsolutionis key to growing apreventive maintenance program byautomatingschedule creationincludingchecking parts inventories,downtime calendars, technician schedulestoefficiently assign maintenance taskswhile keepingdata current in SAPPM. The result istime savings and providingmanagementwith the ability tomake faster and more informed decisions.
Sigga’s Mobile EAMsolution eliminates costly and inefficient manual paper-based plant maintenance processes. Technicians get more done with less,and management gains increased visibility through a view of the real-time status of work in progress.
Siggahas beentrusted by manylarge companies in14 differentasset-intensiveindustriesaround the world. We’vetransformedtheirplant maintenance processesfrom reactive toproactive resulting incost savings,increased wrench time,anda material reduction of downtime.You too can get results likethis Sigga client,Ambevbottling plants,a part ofAnheuser-Busch InBev:
>Check out Sigga’s Solutions for Plant Maintenance.