Preventive maintenance versus shutdown costs

A breakdown in your air compression system can be a nightmare. It’s worse when issues could’ve been easily taken care of during a preventive maintenance visit.

Elevated Industrial Solutions had an emergency call from one manufacturing company that lapsed in maintenance and was down for more than four hours costing an estimated $40,000. Now, they’re a customer with planned maintenance visits from experienced technicians.

What is the actual cost of a shutdown, and how does it compare to the cost of preventive routine maintenance?

Shutdowns cost America

In general, machine failure costs American companies a lot of money.

Precognize indicates that “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.”

What is the potential cost of an unplanned shutdown? 

The cost of an unexpected shutdown depends on many factors: the number of employees, the daily output, the length of the shutdown, the cost of repairing the problem, and how much you’re paying your workforce (to be unproductive). 

Oden Technologies, a manufacturing technology company, estimates that downtime costs every factory at least 5% in yearly productivity, while some large companies see losses as high as 20%. So, factor in your yearly productivity, and depending on your size, subtract anywhere from 5% – 20% from your bottom line.

Can you afford to lose that?

Other impacts when a factory shuts down

Of course, there are hard costs (lost revenue or added expenses) when your facility has an unplanned shutdown. But there are other costs, too.

There’s the cost of potentially losing customers – losing additional revenue. If your facility runs a tight production schedule or has to be working 24 x 7, customers may complain and leave you. Regaining that trust may be hard to do, especially if your customers needed you to complete that work on time.

Employees may become dissatisfied, especially if unplanned shutdowns happen regularly. Dissatisfied workers typically leave, and in this tight labor market, you may have difficulty replacing them. Then there’s the cost of retraining workers. Also, if you pay workers by the hour to be productive, you may be shortchanging employees’ pay.

With some facilities, it’s possible you could see safety issues if suddenly everything comes to a halt without notice. Safety issues could hurt your workers and create workers’ compensation claims as well as fines. Safety records are important to many manufacturing and industrial companies, especially in recruiting and keeping workers. (It’s also just the right thing to do!)

The compliance you must meet for your facility – for state and federal laws or certifications such as ISO – could be in jeopardy. That could result in losing your accreditation or fines for your company. Losing accreditation and collecting fines could hurt your brand, causing customers to leave.

It’s all interconnected.

What are the costs of maintenance? 

Regular compressor maintenance is must cheaper than unexpected shutdowns.

The larger your system, the more costly it will be to maintain, which is a simple fact of compressor ownership. But just how much will it cost? The typical estimate is that compressor maintenance will cost somewhere between 5% and 10% of the expenses tied to the compressor. Some sources say more. Nexflow, for example, says maintenance is roughly 12% of the lifetime cost of an air compressor. 

Numerous factors, though, will impact the total costs. These include the type of compressor, the number of active compressors, the length of pipes and hoses, the number of connections, usage frequency, and more. 

Overall, if you know how much you will spend on your air compressors every year, you can estimate the cost of maintenance. (Again, 5 to 10% of annual compressor costs.)

Remember: planned shutdowns are far better than unexpected ones

Taking all factors into consideration, it’s clear that routine maintenance and even planned shutdowns for that maintenance are far better than unexpected repairs. Talk with experts on how to keep your facility running (using rental equipment, mobile compressors, etc.) as the equipment is maintained.

Service techs to help

Routine maintenance, completed by industry professionals, will ensure your system works efficiently for years and will also help you prevent costly shutdowns for your system. Since Kaeser requests various maintenance to keep your warranty, it may help to have these compressed air service technicians keep on top of all maintenance that has to happen for your machine and facility.

Elevated’s service technicians are certified in various compressors and service all major brands. And we’ll never recommend anything that is unnecessary or jeopardizes your system.