The Cost of Unplanned Downtime
The cost of unplanned downtime in manufacturing will vary depending on the cause, as well as the size of your operation. But it’s generally accepted that downtime can lead to a productivity loss of between 5% and 20%1.
In terms of the financial cost, research shows 98% of organizations report that even as little as an hour of downtime can cost more than $100,0002.
Industrial manufacturers across the world spend an estimated $50 billion annually on unplanned downtime3. It unexpectedly introduces extra maintenance, repair, and replacement costs that can have a big impact on your business’ budget.
The costs vary for chronic and sporadic failures (frequent faults many manufacturers live with vs. rare, yet catastrophic ones that require attention). Sporadic, catastrophic failures can be hugely costly (such as repairing entire heavy machinery) and tend to attract the most attention – sometimes even outside the plant in the cases of larger events.
However, while chronic failures tend to generate less attention, their impact can be just as significant. The cost of maintaining these chronic issues repeatedly soon adds up. For example, if a fastener loosens that misaligns a conveyor belt, this can cause the conveyor to shut down or spill material.
Taking time to fix these issues slows down production. Common chronic problems such as loosening fasteners and shaft misalignment, while costly over time, often remain unseen outside the operational area, which means they are accepted as normal failure. But in reality, these can be every bit as costly as larger failures.
How much unplanned downtime costs your industrial manufacturing operations depends on factors including the:
- Duration of the downtime
- Time of day and week
- Availability of maintenance workers
- Departments and individuals impacted
- Complexity of the cause
The timing of any downtime greatly affects the costs too. Downtime during peak production periods when there’s high demand, such as throughout harvest time for a food manufacturer or when there’s a high electricity demand from power plants in hot summer months, will be more costly than across quieter periods.