Large industrial facilities lose more than a day’s worth of production each month and hundreds of millions of dollars a year to machine failures, according to a new report published by Senseye, an AI-powered machine health management company.
With many global catering equipment manufacturers falling into the large category, these results could be particularly pertinent to the sector.
The ‘True Cost Of Downtime’ report shares findings from a study of 72 major multinational industrial and manufacturing companies. It reveals that, on average, large plants lose 323 production hours a year. The average cost of lost revenue, financial penalties, idle staff time and restarting lines is $532,000 per hour, amounting to $172m per plant annually.
Cumulatively, Fortune Global 500 (FG500) manufacturing and industrial firms are estimated to lose 3.3m hours a year to unplanned downtime. The financial cost of this downtime to those organisations is calculated at $864bn, the equivalent of 8% of their annual revenues.
Senseye chief global strategist Alexander Hill commented: “Unplanned downtime is the curse of the industrial sector. When expensive production lines and machinery fall silent, organisations stop earning, and those investments start costing rather than making money. The costs can spiral to well over $100,000 per hour for large manufacturers in almost all industrial sectors.
“With this report, Senseye has started to answer crucial questions, such as the true cost of downtime for large industrial organisations, and the kind of savings companies could make by using techniques such as predictive maintenance to help prevent breakdowns and reduce unplanned downtime.”
Victor Voulgaropoulos, industry analyst at Verdantix, an independent tech research and advisory firm, commented: “Senseye’s investigation into the costs of unplanned downtime highlights just how much untapped opportunity there is right now for industrial organisations to save money through widespread adoption of software applications and technology-enabled maintenance practices.”
Jim Davison, region director, South of England at Make UK, which represent manufacturers in the UK commented: “One of the biggest challenges manufacturers face is reducing the amount of unplanned downtime and the figures in Senseye’s report clearly show the huge cost impact of not doing this.
“What is clear, is that predictive maintenance can play a crucial role in not only reducing costs, but also boosting productivity at a time when manufacturers need to be using every tool at their disposal to meet the demands of an ever-changing industry.”
Senseye’s study also showed that more than two-thirds (72%) of large industrial organisations have made predictive maintenance a strategic objective and that one-in-five (20%) have established in-house predictive maintenance teams to lead these initiatives.
51% of organisations said they already performed some condition monitoring and 87% that they collected at least some of the data that can be used to support predictive maintenance.