Unplanned downtime has evolved from a mere inconvenience into a serious threat to both revenue and reputation. According to Siemens, the world’s 500 largest companies lose 11% of their revenue to downtime, amounting to a staggering $1.4 trillion.
So, how can you avoid the losses? Read on to find out.
Downtime a cost no business can afford
According to the same data source, the financial impact is most severe in the automotive sector. There, downtime in a major plant can cost up to $2.3 million per hour.
Even more concerning is the trend: since 2019, hourly downtime costs in automotive have doubled.
And it’s not just the auto industry. In heavy industry, the cost per hour of downtime has quadrupled in the same time frame.
The hidden toll on small and medium businesses
Although SMBs may not face the same headline-grabbing losses, the impact can be even more proportionally damaging.
Here’s why downtime is especially dangerous for smaller firms:
Financial pressure
Downtime can cost up to $150,000 per hour, a figure that can be crippling for many SMBs.
Reputational damage
With smaller customer and partner ecosystems, a single incident can erode trust. Unplanned downtime directly affects key KPIs like on-time, in-full (OTIF) delivery, making SMBs appear unreliable and higher-risk to larger supply chain partners.
Inventory Challenges
To mitigate the risk, many SMBs are forced to hold more buffer stock than ideal, raising storage and inventory management costs. This approach helps maintain continuity during outages, but it's far from cost effective.
Predictive maintenance a smart path to continuity
So, what can companies do to mitigate risk without unduly raising costs?
That’s where predictive maintenance (PdM) comes in. For those unfamiliar, PdM uses real-time condition monitoring to track equipment health, predict failures, and optimize maintenance scheduling.
Indeed, predictive maintenance is already one of the single biggest factors in keeping total losses from unplanned downtime from spiraling.
Analysts have already noted a steady decline in hours lost to unplanned downtime driven largely by the mainstream adoption of Predictive Maintenance (PdM) in business continuity.
Today, nearly 50% of companies surveyed by Siemens have dedicated PdM teams – double the number from 2019 – showing how quickly the practice has become a business norm.
PdM versus preventive maintenance
How does PdM differ from preventative maintenance, though? Although both approaches aim to minimize equipment failure, their methods differ:
- Preventive Maintenance follows a fixed schedule, performing routine maintenance regardless of equipment condition.
- Predictive Maintenance, on the other hand, is data-driven and dynamic, identifying issues before they lead to failure—making it even more proactive.
In essence, both are designed to reduce the need for reactive maintenance, i.e., fixing things only after they break.
In conclusion
Ensuring business continuity, preventive maintenance is a proactive asset management strategy that includes routine inspections, scheduled servicing, and early repairs of physical equipment. Its goal is to reduce the risk of unplanned downtime and minimize operational disruptions.
To implement an effective preventive maintenance program, organizations need a comprehensive asset management system. And there’s no better place to turn than the international standard, ISO 55001 for asset management. For more, download our Introductory Guide to ISO 55001 for Asset Management.
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