Telling the true cost of breakdowns

The 2023 Maintenance Engineering Report, based on a survey of 683 UK & Ireland respondents shows companies are averaging 20 hours of unplanned downtime every week – at an average cost of £100,000.

Those additional expenses come on top of significant costs for scheduled maintenance. According to the survey responses, the average time spent on scheduled maintenance is 18 hours, at an average weekly cost of £93,700 or £5,000 an hour.

Amid rising costs, it’s little wonder that maintenance engineers told our survey that downtime is the biggest challenge they face.

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With money tight, many organisations are running machines that should have been taken out of service years ago. The results of our survey show that ageing assets are the number one cause of breakdowns.

And ageing assets are not just a major concern for maintenance engineers. They are also one of the main daily challenges facing procurement professionals responsible for Maintenance, Repair and Operations, according to the 2022 Indirect Procurement survey conducted with the Chartered Institute of Procurement and Supply.

Research from business consultancy PwC warns of the “far-reaching” impact that ageing machinery can have on a business. It suggests that a strategic approach to asset lifecycle management can maximise uptime and reduce the costs associated with unplanned maintenance.

The continuing squeeze on supply chains also adds to the cost of breakdowns. When maintenance engineers struggle to source spare parts, it can take longer to get machines up and running again.

Multiple respondents to our survey cited spare parts as an ongoing challenge. One referenced “a critical shortage of spares” and told us that, “off-the-shelf items now have a four-week lead time”. Another said, “supply chain issues mean we can’t necessarily do the maintenance at the correct time at the moment”.

A third major cause of breakdowns is operator error – an issue frequently logged incorrectly as maintenance.

“I think a lot of businesses find it difficult to come up with consistent metrics to identify the cause and costs of downtime,” says Richard Jeffers, Managing Director of RS Industria. “Broadly speaking, performance issues are more likely to be operator-induced, and availability issues are more likely to be down to maintenance.” He adds: “I suspect that if we were to dig into that 20 hours of unplanned downtime in the survey, we’d find a lot of performance-related losses, as well as availability issues.”

Another major challenge for maintenance engineers who responded to our survey was the impact of inflation on departmental budgets and resources – three in 10 cited declining resources and a lack of investment as a leading concern.

“We have a limited budget based on the requirement to generate cost efficiencies post-pandemic and there’s limited availability of suitable engineers with appropriate levels of skills, knowledge and experience,” said one. Another said, “it’s proving difficult to keep up the standards of our maintenance operations with limited budgets and human resources”.

Against a difficult economic background, the pressure on maintenance departments is unlikely to diminish any time soon. Dr Moray Kidd, Maintenance Engineering Academic, says this will continue to have an impact on both scheduled and unplanned maintenance. “It comes back to resources, the right people, the right number of people and sufficient time and planning,” he explains.

When resources and schedules are running so tight, the slightest disruption to the maintenance plan can create “a vicious circle” of backlogs, Kidd says. “Even with some of the best maintenance practices I’ve seen, there’s always a horror story at some point where something went badly wrong and needs to be fixed. That puts additional pressures on already limited resources – and I don’t see that going away anytime soon.”

With breakdowns and the cost of maintenance at the top of industry agendas, organisations are making a range of interventions to tackle the problems they are facing. Almost half of organisations in the survey say they plan to upgrade equipment or increase monitoring, while a third favour moving to preventative maintenance.

For those opting to go down the preventative maintenance route, a well-thought-out strategy is critical to ensure a measurable return on what is likely to be a significant investment.

Management consultants McKinsey & Company highlight predictive maintenance and digital work management as the two most effective domains to focus on in heavy industrial applications. Recent insights suggest that a successful predictive maintenance programme can increase profitability by 4-10%.

McKinsey’s research advises organisations to progress by “building digital technologies into a clearly defined vision for the future of the maintenance and reliability function”. In order to get the most from these systems, organisations will also need to ensure they provide adequate training for staff so they can capitalise on the data provided by predictive maintenance technology.

With multiple challenges identified by maintenance engineers responding to our survey, it’s clear there is no magic wand when it comes to avoiding breakdowns and the costs that flow from them. It will take a multi-pronged approach to chip away at the causes of breakdowns and increase uptime.

In these tough economic times, incremental gains from a range of interventions could be the best way to reduce the impact of breakdowns on the bottom line.

Download the report to find out more.