Take power downtime as an example. In the US, generators are unavailable on average for 15% of the time due to outages and maintenance. The Energy Information Administration highlights that a further 6% of electricity is lost in transmission and distribution due to both technical factors and outages.
Growing reliance on automation widens performance gaps, as people leave the field. 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 not only becomes a real problem – even worse, the lack of visibility leads to an unnecessary lengthening of recovery time. Closing this downtime gap is a fundamental step in an organization’s digital maturity, and a core part of its transformation journey.
Cost of unplanned downtime
According to a new Vanson Bourne global study After The Fall: Cost, Causes and Consequences of Unplanned Downtime, 82% of companies have experienced at least one unplanned downtime outage over the past three years, and two on average. These outages have lasted for hours. Depending on the company and type of equipment, this can cost organisations anywhere from $50k-$150k per hour for say, a medical device company, and up to $2 million for a major outage on an industrial critical asset. (Aberdeen estimates the cost across all businesses to be average cost across all businesses to be $260,000 an hour). The Vanson Bourne study also revealed high levels of asset estate ignorance across organizations, with 70% 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. Losing the trust of customers as another potential impact of suffering a high-profile incident or disaster, cited by 65% of respondents from the energy and utilities sector, and 62% from the medical sector. Across all sectors, around one in ten admitted their company would never recover from such critical incidents and would ultimately cease to exist.
Towards zero downtime
Nobody wants to be blindsided with these sorts of losses. 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. As companies develop and invest in their industrial digital strategies, over time zero tolerance and zero unplanned downtime will become the norm. 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 that digital tools can improve visibility of assets and help eliminate unplanned downtime. Around 50% of companies confirmed they plan to invest in field service and asset management technologies in the next three years, while 72% claim that zero unplanned downtime is now a number one priority. So the message is sinking in at least.
Transform without losing oversight
The challenge for most businesses is to digitally transform without losing oversight of key products, services and of course assets. Digital transformation projects do not automatically improve control and visibility. Companies must pursue a service-led approach to business, to ensure that their ability to manage the actual assets that make products, or to 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. One step that can help considerably is to create a digital twin of physical assets. The research has revealed that around 54% of companies are planning to invest in this capability 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 top off the 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.