The Real Cost of Unplanned Downtime in Manufacturing

16 Mar
The Real Cost of Unplanned Downtime in Manufacturing

How Unplanned Downtime Effects Your Manufacturing Company’s Bottom Line

In manufacturing, downtime happens. Defined as any period of time when a machine is not in operation, the most common causes of downtime include scheduled maintenance or unexpected breakdowns, product changeover, and labor shortages.

The true cost of downtime goes beyond the invoice you receive after a machine is serviced or repaired. Unplanned downtime erodes a manufacturing company’s profit margin, productive capacity, and customer satisfaction, hurting the bottom line and resulting in lost revenue.

Profit Margin

While all machine downtime affects profit margin, not all machine downtime is created equal; in the manufacturing industry, the cost of unplanned downtime is the real threat.

When a manufacturing company experiences unplanned downtime, revenue is lost every moment that a machine is not operating, and the cost of repairing unexpected equipment failures is high.

A 2018 report titled After The Fall: Cost, Causes and Consequences of Unplanned Downtime surveyed 450 professionals from 350 companies in the UK, U.S., France, and Germany across various industries, including manufacturing, and found that the cost of unplanned downtime was approximately $250,000 per hour, at an average of more than $2 million per downtime event.

Production Capacity

Manufacturing companies report that unplanned downtime reduces their productive capacity by least 5 percent, with many losing as much as 20 percent of their productivity. Not all manufacturing companies have in-house repair teams, and even those that do are not always equipped to handle specific or one-off issues. In these instances, companies are often given a 4-6 week wait time for a repair technician. Safety risks increase significantly during manufacturing downtime as well, as employees are faced with unfamiliar operational environments.

Customer Satisfaction

Filed under the more intangible costs of unplanned downtime, manufacturing companies risk damaging partnerships and customer relationships due to unforeseen delayed order deliveries. This leads to increased stress for all parties, and focusing time and energy on getting a machine up and running again takes away from time and energy that could be better spent building current partnerships, nurturing new customer relationships, and innovating new processes and opportunities.

How To Be Prepared

Manufacturing machines and parts all have a shelf life and downtime is inevitable. Even the most simple parts will eventually wear and need to be replaced. The key to mitigating the costly effects associated with unplanned downtime is being prepared with scheduled periods of planned downtime, and having resources and processes in place so that you aren’t blindsided by unexpected equipment failures.

  • Implement a “Predictive Maintenance” strategy: According to Production Machining, “Predictive maintenance predicts machine failures before they occur by means of infrared thermal imaging, vibration analysis and oil analysis, as well as integrated sensors and monitoring modules.” Read our article about Predictive Maintenance here.
  • Know Where to Find Qualified Repair Technicians: Machine downtime is exacerbated by communication delays in requesting service and receiving quotes, and long lead times to have a repair technician come out. Efficiently submitting service requests, receiving quotes, and filtering through reviews is critical to expediting your uptime.

How The UP! App Can Help

The UP! App network connects industrial manufacturers with available machine service providers. And with our free and easy to use application, manufacturing companies can connect and communicate with service providers all in one platform. There is no time wasted sifting through emails or playing phone tag, reducing the dreaded downtime we’ve learned can wreak havoc on a business.

With The UP! App, you can submit for machine service (in the event of equipment failure and unplanned machine downtime) OR preventative maintenance when planning scheduled equipment downtime. You’ll see estimates from available repair technicians—including rates, ETA’s and quality ratings. Simply choose the one you want and schedule your service!

At the end of the day, the real cost of unplanned downtime in manufacturing can be catastrophic to a manufacturing company—derailing production capacity, damaging customer relationships, and potentially devastating revenue generation. While some downtime is inevitable, the risks and harmful effects to your company’s bottom line can be alleviated by proper preparation, regular intervals of predictive maintenance, and utilizing technology to fill in traditional lag times.

Download The Free UP! App Today

If you need help with implementing a predictive maintenance program, or you’re facing an unplanned machine failure situation, use The UP! App to find the right service provider for your needs. You can download the app on the Google Play Store, the Apple App Store or sign up using any internet browser.