The true cost of downtime: a view from the engineer

According to the recent Industry in Motion report from RS – based on the results of a survey in conjunction with the Institution of Mechanical Engineers (IMechE) – on average almost 20 hours each week are spent on unscheduled maintenance in the UK and Ireland, and around 18 hours on scheduled maintenance.

But the true cost of downtime can be a real challenge to determine. Even more of a challenge, according to RS, is driving home the importance of getting a handle on the cost of downtime, engaging stakeholders across the entire organisation to form a cohesive approach.

RS’ head of field services Gary Harvey, a former engineer, held a seminar on the topic at the recent Manufacturing and Engineering Week exhibition at the NEC, and provided some good insight and guidance on understanding the cost, why it should be prioritised and where to start in the process.

Understanding the overall cost of breakdowns is a minefield

If production machinery stops for an hour or two, some businesses have a very clear view of the cost to the business, but according to RS, many haven’t. While the Industry in Motion report highlighted an hourly cost of downtime ranging from £1,700 to £7.5k, depending on the size of the business, it can differ significantly from business to business and from one sector to another.

The cost areas of downtime are numerous: they derive from production losses, labour – either in-house resource or the cost of getting a specialist in – and the hardware element covering the replacement of the physical part.

Then there are factors such as penalties imposed by customers for either late orders or sub-standard goods as a result of the breakdown, and the health and safety risk. It is widely accepted that the longer time is spent with tools the higher the risk of injury in the workplace. Integrity of data on this multitude of factors is also key, if it is informing the cost of downtime that the organisation is working to.

With RS’ Industry in Motion report highlighting that unplanned maintenance outstrips planned, among the survey respondents, the above factors can have a real impact on the business, impact that in many cases hasn’t been catered for, according to Gary.

Achieving stakeholder buy-in will help reduce downtime costs

In every business, there will be multiple stakeholders all with different priorities. The engineer may develop their KPIs based on their objective to keep maintenance to a minimum and ensure it is preventative rather than reactive. Meanwhile, the procurement professional will be working to their own priorities such as budget or ease of procurement process.

The operations manager will be dealing with the fallout of breakdowns, having to arrange extra shifts to meet output targets, and liaising with the customer to manage their expectations and keep them informed. Potential penalties for not meeting targets may ensue, and there is the headache of that to deal with, Gary explained in his seminar.

“With all these individual stakeholders having very different KPIs, trying to create a set of KPIs simply from the point of view of any one of these stakeholders can be dangerous. Considering all stakeholder priorities is key, and is the only way to develop a holistic approach that really reduces downtime while meeting other organisational objectives and making life easier for all involved,” said Gary.

“Agreeing this as a team instead of in silos will help support the fight for investment in maintenance that engineers are often facing, as everyone is aligned, aware of one another’s challenges and goals so that they can support each other. I’ve seen this cultural shift where the ops guy is fighting the corner of maintenance guy, because he understands why it matters to the entire organisation. And the ops manager who is trying to manage the recycling of wasted materials deriving from breakdowns, can ensure that procurement sees the value in buying better, not cheaper, components and realise the value of product life,” he added.

Be data driven, but driven by the right data

Data is a key element in any business in any sector, but Gary insists that organisations must be driven by the right data, and ensure that the numbers are driving the right behaviours for the business. This, again, can vary significantly dependent on the nature of the business.

With a maturity scale from reactive through to best-in-class, an organisation should have a handle on where it is on the scale to be able to select the right maintenance activity or strategy and not spend on the wrong things. Gary said that often organisations know what good looks like, but in reality their maintenance strategy is at a basic level, so they wouldn’t want to jump into the world of cloud-based monitoring before establishing the basics.

“Trying to achieve a best-in-class approach before achieving best practices in best practice in basic maintenance practices like lubrication” would be a total waste of time. I’ve been in organisations where the maintenance engineer believes lubrication is at a pretty high standard, and that their strategy is adequate, but in reality that’s not the case. In a food production facility, simply having a food-grade oil isn’t best practice: is the oil the right grade, is it filtered, is it segregated in storage? All of a sudden something they thought they had a good approach to can prove to be not that great, and acceptance of this can be hard. But it’s crucial, as 70% of all technical failures have some kind of foothold in lubrication.

“Get the basics right: lubrication, cleaning, maintaining, inspecting and monitoring, before trying to implement the next shiny thing. It’s hard for maintenance engineers today as, rather than the more generalist role it once was, there’s been a cultural change in the typical engineer’s remit, and they need additional technical and scientific strings to their bow,” Gary explained.

Measuring return on investment in maintenance activities

It is widely accepted that every pound on preventative maintenance pays dividends eight-fold, and while it can be difficult to provide a definitive margin of benefit, catching potential failures before they occur can only reap benefits. If there isn’t a positive return on investment, the strategy is inadequate.

It’s also worth considering, in multi-site organisations, that the strategy needs to reflect that site rather than a one-size-fits-all sites. But when the strategy is working in each, the benefits are multiplied across the organisation. Rather than just having a maintenance schedule, implementing a robust strategy will reduce the risk of downtime and the severity of outcome.

RS says every lost moment could be time spent producing, and a move towards best practice – developing robust maintenance strategies that are fully visible, fully understood, and based on accurate and validated data – should be the goal of every maintenance engineer.

Gary concluded: “All machinery will require a certain percentage of time for maintenance, but the right maintenance strategy makes the difference between whether you decide when the downtime is, or whether the machine does. If the machine decides, it could shut down at critical times, when skills not there, there’s no external support, no spares, and the knock-on effect could be customer penalties or the cost of calling in overtime shifts to meet demand. When we are talking about planned maintenance events, if the engineer has access to the right data from monitoring activities, they will have a clearer idea of whether it’s safe to leave the maintenance activity for another week, so that big order can be fulfilled.”