Unscheduled downtime is a major problem in all manufacturing and process industries. According to Stratus Technologies, the total cost of unplanned downtime across all such industries is around 5% of total output value, or $20 billion per year. That is a massive amount of lost productivity.
Despite the scale of the problem, however, many companies still struggle to manage downtime events. A recent survey found that the average downtime event lasts 87 minutes, even though 72% of the affected systems are not intended to experience more than 60 minutes of downtime. Even more disturbingly, 71% of organizations were not even tracking the financial costs of downtime to the organization at all.
On the positive side, most companies are also starting to realize the importance of minimizing downtime. 38% of organizations plan to expand coverage of their production infrastructure with fault-tolerant systems in the near future. This trend will only accelerate as automation and maintenance technology evolves.
How much is downtime costing your brewery?
Every brewery is different, and the best way to determine the costs of your unscheduled downtime is to consult with experts. However, by referring to general industry figures, we can arrive at a reasonable estimate of how much downtime is costing you.
Industry experts estimate the average cost of brewery downtime at slightly over $40,000 per hour. And according to the Stratus report, manufacturing plants experience an average of 3.6 downtime incidents a year, with 3-4 hours of average downtime per incident, for a total of over 15 hours. That means the average brewery will incur over $600,000 in total downtime costs every year.
Of course, these numbers are only averages, and can vary substantially depending on the size of brewery and other factors. However, while smaller breweries may not suffer as large a loss in absolute dollar terms, they can be more susceptible to frequent (and longer) downtime events due to less sophisticated automation and maintenance systems. Thus, their downtime costs as a percentage of revenues may actually be greater than large breweries.
Tiny Reductions in Downtime Make a Major Difference
Often, downtime is expressed as a percentage of availability. For example, 1% downtime would be expressed as 99% availability, 0.1% downtime as 99.9% availability, and so on.
While this may be the engineering convention, it is very misleading from a business perspective. That’s because even very small percentage differences in availability can have a large impact on revenues:
- 99.99% availability means 0.88 hours of unscheduled downtime, or $35,200 in downtime costs per year.
- 99.95% availability means 4.4 hours of unscheduled downtime, or $176,000 in downtime costs per year.
- 99% availability means 88 hours of unscheduled downtime, or $3,520,000 in downtime costs per year!
For this reason, we often find that the benefits of downtime reduction are not fully appreciated, until the actual financial costs of that downtime are quantified. Once they have that concrete number in front of them, many companies quickly understand why minimizing downtime is so critical.
Automation Reduces Downtime Frequency and Duration
An integrated automation system can help you significantly decrease downtime in two ways.
First, reduction of downtime frequency. Automation improves the consistency of your operations, and thus reduces the chances of downtime due to human error. In addition, an integrated automation system will allow you to easily keep tabs on the status of all your infrastructure, from brewhouse to cellar. This will let you spot signs of wear and tear in advance, and give you a chance to schedule maintenance or a replacement before anything breaks down.
Second, reduction of downtime duration. In an integrated system, you can have full visibility of operations at multiple sites, accessible through a standard computer or smart mobile device. You can also set alerts so that you and your key decision makers are aware of problems the moment they occur. This timely access to the right information allows your support team to move quickly and solve the problem.
Because of these benefits, a well-designed automation system is a key part of any downtime reduction plan. Combine that with the benefits to production efficiency, and it’s clear why a quality automation system should be a top priority for any growing brewery.