The combined impact of soaring energy costs, supply chain disruption and rising inflation is an existential threat to businesses around the globe, and many are responding by trying to tighten their belts.
From car giant Tesla to drug maker Novartis, many companies are looking to cut costs as bleak economic forecasts stack up. In fact, one survey found a fifth of companies in the UK had paused investment in their business completely in an attempt to save money.
When times are tough it can be tempting to only spend on what might be deemed operational essentials, with things such as predictive maintenance perhaps seen as something that a company ‘could have’ rather than ‘must have’.
But predictive maintenance – or condition monitoring – is no longer something which is just a ‘could have’. A way of tackling problems before they develop, it is increasingly being seen as essential modern industrial practice. Indeed, 56% of companies said they plan to expand their use of predictive maintenance in the future.
Cutting back on predictive maintenance could incur far bigger costs in the long term. Not just for company finances, but also reputational damage too – damage which is far harder to repair and could outlast any temporary economic shocks.
Lee Windsor, Director at RJW, said: “There’s a lot of pressure on companies at the moment to protect their finances and the instinct may sometimes be to cut back on predictive maintenance. But in terms of the savings it can ultimately deliver, condition monitoring makes more sense now than it ever has before.”
The need for predictive maintenance
As a central pillar of Industry 4.0, predictive maintenance tracks performance of equipment in real time, using IoT sensors and analytics to spot possible future problems and regulate them before they cause any downtime. By tracking factors such as temperature, pressure, rotational speeds and vibration, employing this type of smart approach also lengthens the life-cycle of equipment and maximises process efficiency.
By harnessing the latest in cloud and analytics, condition monitoring is a valuable new tool for industry to ensure everything continues to run smoothly – and companies are feeling the benefit. According to the consultancy firm McKinsey….
…predictive maintenance can increase production line availability by between 5-15% and reduce maintenance costs by 18-25%.
Predictive vs Reactive
Condition monitoring operates in contrast to traditional – reactive – maintenance, which essentially seeks to shut the stable door after the horse has bolted. Reactive maintenance fixes problems which have already occurred, impacting on costs and reputation. The figures bear it out too. Statistics from the U.S. Department of Energy claim..
…predictive maintenance can save companies up to 12% compared to reactive maintenance, savings which stack up over time.
Impact of cutting predictive maintenance
Companies are increasingly turning to predictive maintenance to help keep operations running smoothly. One survey found 83% of European business leaders questioned used some form or predictive maintenance, while 56% planned to expand its use in the future.
That being said, when pressures on balance sheets are ramped up it can be tempting to cut back on things which may not be deemed immediately essential for day-to-day operations. But the dangers of taking such a gamble can be huge.
- Repairs and replacements: The most obvious downside of not maintaining equipment is failure. Equipment has to be repaired or replaced.
- Increased downtime: Equipment failures lead to downtime when production halts to enable repairs and replacements. Downtime costs the global economy around £300,000 every hour (that’s around £5,000 every minute!)
- Increased general maintenance: Because predictive maintenance helps spot problems while they’re still small and manageable, or even before they happen, the downside of cutting back is that smaller problems become bigger problems.
- Compromised quality: Poorly-performing equipment can result in inferior products and services being produced. This impacts the company’s reputation and brand, while also increasing the likelihood of penalties and products being recalled.
- Safety concerns: Equipment which has not been maintained can present a risk to both staff and customers.
So it stands to reason that when all of these potential factors are weighed up, adopting condition monitoring actually makes more sense, not less, when times are tough. It can offset problems before they become costly, and is a smart and agile way of working that helps future-proof business for when it comes through the other side of choppy economic waters.
Lee added: “Downtime can cost a company massive amounts of money in a short space of time, but often it’s an avoidable situation.
“Keeping a close eye on small changes in how equipment is operating can help spot potential problems down the line, enabling action to be taken now before it becomes a bigger issue.
“With this being the case, predictive maintenance only has to work once and it can pay for itself for a year, so the numbers really do stack up.”
With the geopolitical situation in Ukraine, post-pandemic pressures on the supply chain, increased energy costs, the spectre of recession in the United States, continued impact of Brexit and a change of political leadership in the UK, It is clear that business is facing a perfect storm of uncertainty.
But while some firms may instinctively want to put the brakes on investment in anything deemed ‘non essential’, the benefits to revenue and reputation show that predictive maintenance is anything but non-essential.
Another question which businesses need to ask is what rivals will be putting in place to ensure that when a new and more positive financial outlook does emerge, they are ready to fly out of the traps and embrace the opportunities of Industry 4.0?
Companies which have condition monitoring tech firmly embedded will be poised to capitalise on a leaner, smarter and more productive way of doing things in a new economic landscape.