By Raymond Obermeyer, Managing Director at SEW-EURODRIVE South Africa
Unplanned downtime has serious consequences in nearly every single industry. According to a report published by Senseye titled ‘The True Cost of Downtime’, Fortune Global 500 manufacturing and industrial companies lose close to US$1 trillion due to unplanned downtime each year, squandering an estimated 3.3 million hours of production time annually as a result of machine failures.
Published in 2021, Senseye’s report is based on interviews with engineering and IT professionals at 72 multinational industrial and manufacturing companies in 21 countries.
The report finds that unscheduled downtime is highest in the automotive sector, revealing that automotive plants lose 29 production hours a month costing an estimated $557 billion a year, or around 20% of their annual revenue. The cost of machine failure in the heavy industry sector which includes mining, metals and other heavy-industrial companies, comes in at $225 billion a year.
The true costs of downtime, however, includes more than just the tangible costs of production and capacity losses, the cost of repairs and services, employee downtime and lost productivity but also the intangible costs such as a damaged reputation and lost customers, amongst others.
While all downtime is a concern, unplanned downtime has a much higher associated cost than scheduled downtime, with the former coming in at a cost 10 times higher than the latter.
In most instances, unplanned downtime is the result of ineffective or inadequate maintenance as companies focus on the immediate need to meet targets rather than investing in a maintenance programme to ensure better long-term performance and equipment reliability. This results in organisations having to deal reactively with problems after they have occurred. The probability of prolonged downtime increases exponentially with inadequate maintenance and creates an unsafe working environment.
Not all organisations recognise the value of regular maintenance with the result that they take unnecessary risks. A lack of equipment maintenance typically starts to be reflected by minor issues such as oil leaks a few years after installation but can quickly escalate into bigger and more expensive problems.
A McKinsey report published in 2019, titled ‘Putting the shine into South African mining: A path to competitiveness and growth’ points out that local mining companies lag their global peers when it comes to operational productivity and asset utilisation with overall equipment effectiveness of local operations on average 5% lower than the global industry benchmark with unplanned maintenance coming in at nearly 40% higher than the global industry average. This, argues the report, reflects insufficient equipment monitoring in many operations. The report recommends that to reduce equipment downtime and costs that the industry improves its predictive maintenance programmes.
The high cost of unplanned downtime is the major driver behind a growing number of organisations making more of an effort to understand the real cost, including both the tangible and intangible costs, of machine failure. At the same time they are recognising the benefits of a planned and proactive maintenance programme.
This requires that organisations know when assets should be scheduled for maintenance and when they need to be upgraded. Recognising the value of regular preventative maintenance to help mitigate against the risk of machine failures resulting in unplanned downtime, SEW-EURODRIVE offers a wide range of cost-effective services to help users to take appropriate care of their industrial gearboxes, gear motors and electronic and automated range of controllers and variable speed drives.
SEW-EURODRIVE offers a comprehensive range of adaptable engineering solutions for the entire value-chain. These services include dependable on-site support, 24 hours a day, 365 days a year.
After conducting an onsite equipment inspection, the company produces a report summarising the conditions of the equipment, the remedial action necessary to improve reliability and a suggested maintenance procedure. Ultimately, our aim is to avoid unscheduled breakdowns and extend the life of installed equipment. SEW-EURODRIVE DriveRadar®, is a condition-based maintenance platform. A connected solution for data-based predictive maintenance, DriveRadar® automatically collects data from field equipment and uses it to track tends, monitor equipment condition and predict potential failures, in the process preventing unforeseen failures in operation, detecting and tracking wear rates and minimising downtime.
In addition, plant operators are provided with service level agreements for ongoing support. Typically this includes a visual inspection every three months and a more comprehensive equipment survey every six months.
While there are costs associated with a pro-active maintenance programme, these tend to be far lower than the cost of a breakdown resulting in unscheduled downtime. When it comes to equipment performance and reliability, regular maintenance is the most cost-effective option.