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 of unplanned downtime and the associated costs. We will conclude with a discussion of 3 strategies to prevent unplanned downtime through plant maintenance.
The Role of Plant Maintenance to Prevent Unplanned Downtime
The primary goal of any maintenance organization is to maximize asset availability and efficiency. Yet downtime occurs all too frequently. These incidents can have a devasting 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 the estimated $30,000 per hour that unplanned downtime can cost.
The Obvious 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 downtime in manufacturing plants: planned and unplanned.
Planned downtime involves scheduled 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 as performing routine maintenance as part of a preventative maintenance program is costly 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. Manufacturing plants face tight production schedules and downtime can be particularly devastating if 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. With teams in constant react mode, there are fewer opportunities for the type of innovation that helps to optimize equipment reliability.
Knowing your true costs of downtime is 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 that Plant Maintenance Operations Can Reduce
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 keep it running and avoid breakdowns. This seems simple enough, yet many organizations neglect to perform preventive maintenance. There are several reasons why organizations fail to implement an effective preventative maintenance program. Most of the reasons come down to having the right data and structured processes to 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 decisions to effectively plan and manage their plant maintenance processes. Optimizing SAP PM with automation can help plants to improve the planning and scheduling of preventive maintenance to improve equipment uptime. It can also improve data to be able to make informed decisions around optimal cadence of preventive 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.
Manufacturing plants are under major pressure to produce. Maintenance teams are stretched thin, with most of their time running from one urgent situation to the next unscheduled 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 as downtime that disrupts production.
This also results in maintenance teams being perceived as the “fix-it” teams. This break-fix mentality can become so ingrained that it becomes difficult to schedule and sustain momentum on a preventive maintenance program to optimize equipment uptime. The entire organization must be on board to shift out of the break-fix mindset.
Too Much Preventative Maintenance
Conducting too much preventive maintenance may lead to failure. For some equipment, each time you open up the machine to maintain it, you create risks, the cumulative effect can lead to breakdowns. Consider condition-monitoring and sensor technologies to reduce the interventions on this type of equipment.
3 Plant Maintenance Strategies to Prevent Unplanned Downtime
1. Double-down on Your Preventative Maintenance Program
Preventive maintenance focuses on identifying trouble spots and conducting planned maintenance before there is an issue. To scale and manage your preventative maintenance program you need to leverage the right technology. For instance, a plant maintenance planning and scheduling solution that integrates with SAP Plant Maintenance automates maintenance routines to efficiently allocate resources and coordinate preventive maintenance activities around production schedules.
2. Monitor Equipment in Real-Time
Predictive maintenance takes plant maintenance to another level. Using innovative Industry 4.0 technologies organizations can monitor their assets in real-time. Smart technologies collect data and automatically analyze it to make predictions when the asset will likely malfunction, giving teams time to plan repairs including shifting production to other machines to avoid waste and production delays.
The potential savings from predictive maintenance processes are massive. According to a report from the McKinsey Global Institute on the Internet of Things, predictive maintenance can lead to savings between $200 billion and $600 billion for manufacturers by 2025.
A Reliability-centered maintenance (RCM) approach helps organizations to minimize unplanned downtime at the lowest possible cost. RCM works by identifying the conditions that could potentially result in downtime for each asset. And then, the failure modalities are prioritized from 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 routine preventive maintenance, or just be prepared to replace the equipment.
3. A Cultural Shift
Having a culture that recognizes and emphasizes the importance of preventive plant maintenance is 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 solutions for asset-intensive industries. Sigga has approximately 20 years of experience with SAP Enterprise Asset Management, industrial maintenance, warehouse, and inventory solutions to digitally transform traditional workflows.
Sigga’s Planning and Scheduling solution is key to growing a preventive maintenance program by automating schedule creation including checking parts inventories, downtime calendars, technician schedules to efficiently assign maintenance tasks while keeping data current in SAP PM. The result is time savings and providing management with the ability to make faster and more informed decisions.
Sigga’s Mobile EAM solution 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.
Sigga has been trusted by many large companies in 14 different asset-intensive industries around the world. We’ve transformed their plant maintenance processes from reactive to proactive resulting in cost savings, increased wrench time, and a material reduction of downtime. You too can get results like this Sigga client, Ambev bottling plants, a part of Anheuser-Busch InBev:
Check out Sigga's Solutions for Plant Maintenance.