January 5, 2022
By: Lyat Avidor Peleg
The Real Cost of Downtime in Process Manufacturing
Process manufacturing plants are under immense pressure to avoid downtime, which can impact drastically on overall productivity, profitability, and reputation. Downtime affects every plant and every vertical industry from time to time, and there’s no single magic bullet that’s guaranteed to prevent your plant from going down.
That said, the more you understand the causes and costs of unplanned downtime, the more you can do to help reduce the incidence and be better prepared to deal with it when it does occur.
The Leading Causes of Unplanned Downtime
Process plants are complex places, so there’s no one reason why plants experience downtime. Here are some of the main causes of unexpected downtime in process plants.
1. Equipment failure
Equipment failure is far and away the most common cause of unplanned downtime. Some pieces of equipment run for 16-20 hours a day, or even around the clock, raising the likelihood of failure at some point.
Most plants lavish the most protection on their most expensive and central items of machinery, but partly because of all that attention, it’s relatively rare to see catastrophic failures in big equipment. Small failures in minor parts like valves, pipes, and rotating equipment can cost far more in downtime and repairs, and happen far more frequently.
2. Unplanned maintenance or repairs
Downtime isn’t always due to failure. Sometimes you’ll find that your equipment is still working, but it’s not operating as it should be. Efficiency may have dropped, or an alarming issue has developed like loud noises, significant vibrations, or a sharp drop or rise in temperature.
Even relatively minor changes in operating efficiency could require urgent repairs at short notice. If you need to shut down the plant some days before you’d planned a major maintenance day, that’s unplanned downtime, and it can have an impact on productivity levels.
3. Worker shortage
The manufacturing industry is currently experiencing a serious shortage of maintenance personnel, which makes it harder to ensure that each item of equipment receives correct maintenance on schedule.
According to Deloitte, there’ll be 2.1 million skilled jobs going unfilled by 2030. 35% of U.S. manufacturers are actively recruiting maintenance technicians, and an even higher percentage are shifting at least some maintenance responsibilities to operating personnel, with the result that repairs and maintenance aren’t always carried out by people with the necessary training.
Manufacturing companies are seeing a high percentage of their most experienced employees retiring – partly in reaction to the pandemic, which led many people to retire early out of ill health, or so that they can make the most of their retirement, but also simply due to the huge baby boomer cohort reaching retirement age. However, they don’t have enough slightly-more-junior, trained staff ready to fill their shoes.
4. Human error
Simple accidents can cause unplanned downtime in many ways. Employees can make mistakes calibrating machinery, introduce errors when configuring the product mix, overlook early signs of issues like leaks and rising noise, and more.
Once again, the issue has been exacerbated by lack of experienced personnel, but COVID-19 has also played a part. Infections, isolation requirements, and restrictions to the number of staff people can be on site at a time, means there are fewer people at the plant to notice emerging issues and carry out quick repairs. The problem is still ongoing with successive waves of infection, as employees might have to leave work because they tested positive, are caring for sick relatives, or need to isolate after contact with a confirmed case.
The Impact of Unplanned Downtime Is Greater Than you Think
1. Unplanned downtime results in high costs
The primary impact of unplanned downtime is financial. When a plant goes down, processes and production come to a grinding halt, but the same can’t be said about the costs. Employees still need to be paid; companies miss out on profit from lost production, and costly raw materials can spoil while waiting for production to restart.
Plants have to pay to replace broken parts, cover extra maintenance work which might include overtime, and repair and restore the plant. If the issue had been caught earlier, many of these costs could have been prevented. Additionally, many plants take time to return to full productivity after a shutdown, and the first few batches might need to be discarded until product quality returns to the required level.
Every year, Fortune Global 500 (FG500) manufacturing and industrial firms lose approximately 3.3 million hours of production time to machine failure, and almost $1 trillion through unplanned downtime, amounting to an economic impact of $864 billion or 8% of their annual revenues. The average large plant loses 323 production hours each year, amounting to $532,000 per hour, or $172 million per year.
The disruption to production schedules can cause you to miss deadlines, thereby damaging your reputation, lowering customer confidence, and driving clients to your competition. This is especially likely in continuous production plants, where it’s hard to make up even a few hours if you fall behind schedule.
Research found that oil and gas is the vertical that loses the most hours to unplanned downtime, probably because much of the work has the potential to be so dangerous that production stops at the first sign of a potential problem. An average facility is estimated to lose 32 production hours each month, at a cost of $220,000 per hour or $84 million per year. FG500 refineries alone lose an estimated $47 billion from 213,000 downtime hours each year.
Food and beverage plants lose far less: approximately 25 hours a month, costing them $23,600 per hour, or a total $35 billion a year, equivalent to 1% of revenue across the entire industry.
2. Unplanned downtime affects employee morale
Alongside the financial impact, there are other effects that are harder to quantify. Frequent unplanned downtime leads to increased stress among employees, who find themselves at a disadvantage, dealing with urgent crises instead of proactively preventing them.
When employees are stuck in reaction mode, it makes it hard for them to think out of the box and come up with creative ideas and solutions for the company. As a result, innovation suffers, affecting future growth.
3. Unplanned downtime can provoke a self-perpetuating cycle
If your employees find themselves in perpetual panic mode because they’re repeatedly encountering unplanned downtime, it can set off a vicious cycle. Panic leads to tunnel vision which can result in simple mistakes that would never happen if everyone was thinking clearly.
Sometimes equipment failure can set off a vicious cycle, where a maintenance team or well-meaning employee uses the wrong parts or unreliable methods to patch up an issue as quickly as possible, which then alters the rhythm of the process and causes a different part to fail.
4. Unplanned downtime can harm employee safety
Most safety incidents occur during transient operations, namely while a plant is in the process of being shutdown, or restarted after a shutdown. The more often these happen, the more likely it is to result in a safety issue.
If you’re plagued with frequent shutdowns, it can be tempting for employees to decide to continue working in an unsafe environment until the issue is fixed, just so as to avoid yet more downtime.
6 Ways to Reduce the Impact of Unplanned Downtime
According to Aberdeen Research, 82% of companies experienced unplanned downtime over the past three years. While you’re unlikely to avoid unplanned downtime entirely, there are steps you can take to minimize it.
1. Predictive maintenance
Predictive maintenance (PdM) uses Industrial Internet of Things (IIoT) devices and connected sensors to monitor every aspect of the plant round the clock; 5G and edge computing to enable latency-free, real-time data sharing to powerful analytics engines; and artificial intelligence (AI) and machine learning (ML) analytics which can make sense of this flood of data, recognize the patterns of “normal” activity, and quickly spot and identify significant anomalies.
With this information, plant engineers can optimize their maintenance schedule to ensure that every item is checked at the most appropriate intervals and that nothing gets overlooked. Deloitte experts agree that “PdM is the most efficient maintenance strategy available—a gold standard for which to aim.”
Deloitte’s graphic below shows the increasing levels of Overall Equipment Effectiveness (OEE) which different approaches to maintenance can achieve. Predictive maintenance, shown as Level IV, can support more than 90% OEE.
As a result, 72% of FMCG companies reported that predictive maintenance had become a strategic initiative, while 72% of all large industrial organizations and 82% of oil and gas respondents said it’s a strategic objective. Jim Davison, region director, South of England at Make UK, says “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.”
2. Early alerts
In addition to ensuring that every item of equipment is checked and maintained at the optimum time, PdM can produce early warnings about impending issues, so they can be dealt with before they snowball.
It’s often possible to prevent downtime entirely by applying a small, inexpensive, and quick repair to a small problem or inefficiency. At other times, you might still need to stop production, but the repair can be completed in less time so downtime is kept to a minimum.
With the help of early alerts, you can plan when would be the best time to carry out repairs or replacements. The issue isn’t yet urgent, so you can choose a time that will cause the least disruption, or combine multiple impending repairs into the same shutdown period.
Your maintenance team also won’t have to neglect a different serious issue in order to jump to put out this fire, and they’ll have enough leadup to order the right parts so that downtime isn’t extended while you wait for them to arrive.
New tools that use AI and IIoT can automate many basic plant activities. This increases employee safety and speeds up many processes, while also helping reduce the risk of human error. Automated calibration, configuration, and product mix formulations can help prevent mistakes that can lead to shutdown.
4. Track downtime
As with many other aspects of plant efficiency, knowledge is power. Plant managers can use advanced data analytics to track each incidence of manufacturing downtime, identify the most common causes, and plan solutions that can be implemented to eliminate or mitigate them in the future.
5. Improve employee training
As mentioned above, human error can be a significant cause of unplanned downtime. Raising the level of employee training can help ensure that everyone knows which safety precautions to follow during shutdown and startup, how to safely carry out maintenance, the correct steps to configure product mix, etc.
6. Digital twins
Digital twins use IIoT, data sharing, and ML to create a virtual model of the entire plant which synchronizes with the physical plant in real-time. Engineers can use augmented reality (AR) glasses to “see” the plant from any angle, even when they’re not on site.
Digital twins give visibility inside items of equipment and heavy machinery, so employees can examine and investigate an incident without having to shut down the entire process. Often, it’s even possible to carry out repairs through the digital twin.
As well as helping reduce downtime, digital twins can help employees who can’t come to the premises in person, and thus can also serve as a solution for retaining experienced older employees who want to retire or move to part time work.
You Don’t Have to Put Up With Unplanned Downtime
Thanks mainly to equipment failure, but also due to labor shortage, unplanned maintenance, and simple human error, unplanned downtime causes significant harm to process manufacturing companies in the form of lost revenue, increased costs, lower morale, and long-term damage to your reputation.
Fortunately, as technology evolves, it produces new ways to help process engineers regain control over the plant. With predictive maintenance, together with early alerts, digital twins, better analytics, and rising automation, it’s possible to reduce both the frequency and the impact of unplanned downtime, so you can improve production and profitability across the system.