The Cost of Unplanned Downtime

by | Oct 7, 2014 | Company News

In my experience, the most common reason a facility or maintenance team does not implement a predictive maintenance (PdM) program is because of money.  What is often not understood is that a successful PdM program will actually save money.  How?  One of the major reasons is avoiding unplanned downtime.


Let’s look at some things that make unplanned downtime so costly: Before we get too far into unplanned downtime, there are a few things to understand first.  The first is that all facilities are different, so I will only be speaking in generalities, not specifics.  If you decide to, you can break this down much further with your own site specific numbers to gain a better understanding of what your downtime costs are.  It’s also important to understand the difference between planned and unplanned downtime.  When production is scheduled to stop for planned maintenance or changeovers, it’s considered planned downtime.  Any other stoppage of production without planning would be unplanned downtime.  What’s important to understand here is that all downtime has a cost associated with it, even planned downtime.  However, in most cases unplanned downtime is exponentially more costly than planned downtime.

  • Lost Revenue – This can vary significantly from hundreds, thousands, and hundreds of thousands of dollars per hour.
  • Labor Waste – When production is down, many employees are unable to perform their duties, which can add up to significant waste very quickly.
  • Missed orders, damaged or unusable product – Untimely delays can cause orders to be missed or late, often damaging relationships and future sales. These disruptions can also lead to wasted or unusable product.
  • Overtime – Repairs need to be made immediately when production stops in the middle of a run. This can often lead to overtime hours for maintenance staff to get the plant up and running again.
  • Utilities – Even though no revenue is being generated during unplanned downtime, operating the plant still costs money. Utilities can be a big part of that.
  • Surplus inventories – If failures occur often, you are most likely keeping excess spares in your inventory. Spares aren’t always cost effective and can drain a lot of capital.
  • Shipping costs – If you don’t have spares, you need them quickly. Expedited shipping is not cheap.
  • Safety Incidents – When employees are scrambling to get the facility up and running, mistakes can be made. Injuries are costly and slow down the effort to jump start production.

While this list is not comprehensive, it should give you a good understanding of some the real costs of unplanned downtime.  These hidden costs are why many facilities have implemented more advanced measures to avoid unplanned downtime.  Predictive maintenance has become a widely accepted strategy in reducing unplanned outages and minimizing lost revenue.  Are you taking steps to avoid unnecessary downtime and save money for your facility?


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