With a growing reliance on automation and digital transformation, businesses must improve asset management and servicing to reduce unplanned downtime pressure; here, Mark Homer, Vice President Global Customer Transformation for ServiceMax, discusses the problem of unplanned downtime.
As industrial automation continues to digitise, one area in particular is becoming a critical area of concern– unplanned downtime. The shift to outcome-based business models, equipment assets becoming more sophisticated and connected, and of course, the pervasive and increasing reliance on machines, are all adding to the pressure to avoid outages. Mitigating downtime is now a strategic priority in the digital age.
Take power as an example. In the US, Generating units are unavailable on average for 15 per cent of the time due to outages and maintenance. In fact, 6 per cent of the time they are unable to meet demand at all. And the Energy Information Administration highlights that a further 6 per cent of electricity is lost in transmission and distribution due to both technical factors and outages.
The growing reliance on automation is already widening performance gaps. Businesses are losing sight of assets, especially in terms of efficiency, leading to a fractured insight of manufacturing or service delivery. The upshot is that unplanned downtime becomes a real problem and even worse, the lack of visibility leads to an unnecessary lengthening of recovery time. Closing this downtime gap is a fundamental step in an organisation’s digital maturity, and a core part of their transformation journey.
According to a new Vanson Bourne global study After The Fall: Cost, Causes and Consequences of Unplanned Downtime, 82 per cent companies have experienced at least one unplanned downtime outage over the past three years, and two on average. These outages have lasted four hours. Depending on the company and type of equipment, this can cost organisations anywhere from USD50k–150k per hour for say, a medical device company, and up to USD2m for a major outage on an industrial critical asset. (Aberdeen estimates the cost across all businesses to be $260,000 an hour). The research also revealed high levels of asset estate ignorance across organisations, with 70 per cent of companies lacking full awareness of when equipment is due for maintenance, upgrade or replacement.
In addition to financial losses, the research found that almost a third of respondents said they were unable to service or support specific equipment assets, while 65 per cent of respondents from the energy and utilities sector, and 62 per cent from the medical sector cited losing the trust of their customers as a possible impact of suffering a high-profile incident or disaster. Across all sectors, around one in ten admitted their company would never recover from such critical incidents and would ultimately cease to exist.
Nobody wants to be blindsided with those sorts of numbers. But what are companies doing about it?
The research hints at a tipping point in recognition of the problem and planned investment to address it. Over time, zero tolerance and zero unplanned downtime will become the norm as companies develop and invest in their industrial digital strategies. Key to this is an understanding of and investment in field service management and asset performance management capabilities.
According to Vanson Bourne, eight in ten companies have already recognised this, at least that digital tools can improve visibility of assets and help eliminate unplanned downtime. Around 50 per cent of companies confirmed they plan to invest in field service and asset management technologies in the next three years, while 72 per cent of firms claim that zero unplanned downtime is now a number one priority. So the message is sinking in at least.
The challenge for most businesses is to digitally transform without losing oversight of key products, services and of course assets. Digital transformations do not automatically improve control and visibility. Companies need to pursue a service-led approach to business, to ensure that their ability to manage the actual assets that make products or ensure services run smoothly are always up and running. A clear asset management and predictive maintenance strategy should ensure that businesses take the right path towards reducing, if not completely eliminating downtime.
Understanding problems before they happen and having knowledgeable and digitally empowered service technicians to ensure the smooth running of assets will go a long way to making this happen. A digital twin of physical assets will help considerably here, and the research has revealed that around 54 per cent of companies are planning to invest in a digital twin by 2020. Throw in the fact that field service is expected to become a primary revenue driver for most businesses within the next two years and you have a recipe for transformation.
Will it be for the better? If zero downtime is important to a business – and it should be – then yes. And until a time when machines can actually fix themselves or not break at all, it is in fact the only transformation worth considering.
Go to www.servicemax.com for further information.