The Costs of Machine Downtimes and how to reduce them

Planned and unplanned downtimes can cost companies up to ten percent of their available production time. This time, as well as the money that manufacturers have to invest in troubleshooting is irretrievably lost.

But do you know what one hour of downtime costs your machines? If not, you're now on the right track: according to the International Society of Automation (ISA), 80 percent of companies are facing the same issue.

What production managers often fail to consider is that, in addition to the direct costs, i.e. the loss of sales, downtime costs also include a number of hidden costs. The following indirect costs are the reason why machine downtimes are so financially painful:

• Unplanned costs are incurred for maintenance work by external service technicians and for resources to rectify faults.
• Production capacity is not fully utilized, but fixed costs are still incurred during the downtime, for example for wages or operating resources — this reduces the profit margin.
• During a breakdown, sales opportunities are lost or customers have to wait longer for their goods.
• In the food industry, a machine breakdown can mean the loss of material if perishable goods are being processed.
• Repairing and restarting machines causes expensive overtime.
• During downtime, employees have to put their energy into solving the problem, which reduces productivity. The ISA estimates a five to 20 percent loss in productivity.
• Downtimes in production also affect machine and plant manufacturers: The downtimes of their machines can have a negative impact on their reputation.

The predictive maintenance specialist Senseye, which now belongs to Siemens, has calculated the concrete costs of machine downtimes:

• The hourly costs for system failures quickly exceed the 100,000 dollar mark — the equivalent of more than 90,000 euros.
• On average, there are 20 breakdowns per month per plant, resulting in 25 hours of lost production time.
• Large plants have to dig particularly deep into their pockets when breakdowns occur: With an average of 323 lost production hours, they lose around 157 million euros per year and plant.
• Broken down to the hour, large companies pay around 490,000 euros for lost sales, machine restarts, and repairs.
• Overall, the Fortune Global 500 industrial companies lose eleven percent of their annual turnover due to unplanned machine downtimes — just under 1,380 billion euros. By way of comparison, in the 2021 report the figure was around 797 billion euros.

This is how much unplanned downtimes cost in various industries

The costs of machine downtimes are increasing — especially in times when companies are facing crises and difficult financial markets that are making them cut costs. It is therefore not just the big players that should do their best to keep their machines running: Higher plant availability is beneficial for all industries.

These are the costs incurred by defective machines and systems in various industries:

• The cost range for one hour of downtime in the industries surveyed ranges from the equivalent of almost 36,000 euros in Fast Moving Consumer Goods to 1.84 million euros in the automotive sector.
• In the oil and gas sector, downtime costs doubled by 50 percent between 2019 and 2022 to around 460,000 euros.
• The total annual costs for unplanned downtimes in large automotive plants average more than 550 million euros each.
• In heavy industry, metal processing and mining, the figure is 118 million euros per plant, while in the oil and gas sector it is around 137 million euros.

Incidentally, downtimes are also costly in IT-based industries. Figures from 2016 show that downtimes in data centers cost an average of 8,300 euros per minute.

When you are fighting to avoid downtimes, knowledge is your most powerful weapon. The first step is to become aware of the consequences and costs of machine downtimes and to understand that downtimes are expensive and that investment in essential maintenance is required.

Next, the causes of downtimes must be identified and avoided by means of routine maintenance. According to Senseye, for example, 72 percent of industrial companies want to reduce their downtimes by means of predictive maintenance.

Instead of repairing when necessary, preventive maintenance means that maintenance work takes place regularly and is planned in advance. To achieve this, it is important to provide service technicians with all of the relevant machine and spare parts information so that they can efficiently troubleshoot downtimes.

By means of the analysis of system failures and optimization potential or the elimination of machine defects, software solutions provide manufacturers and machine operators with the necessary transparency about machines and processes.

The digital twin plays an important role here. It maps the machine and system status over the entire life cycle and combines it with information on completed and planned maintenance processes, technical documentation, and information about spare parts.

Digital twins such as the Digital Information Twin (DIT) from Quanos are a prerequisite for efficient service operations. As a central knowledge platform, it not only provides important information for maintenance tasks but also offers intuitive step-by-step instructions on how to troubleshoot defects more quickly.

Because all the necessary information is connected, digitized, and available in real time, technicians can access it via mobile devices such as smartphones or tablets and efficiently complete repairs. Service staff are relieved of these tasks and can get back to other tasks more quickly.

Discover the most effective tool against machine downtimes Quanos InfoTwin!