What Is Unplanned Downtime? Causes and Solutions

Unplanned downtime was once an unavoidable reality for any production process—but today, real-time insights and analysis can help. What steps can your team take to earn back lost time?

What is unplanned downtime and how do we measure it?

Imagine your factory’s main product line halts unexpectedly due to a sudden motor failure, causing operations to stop for the afternoon while the issue is diagnosed and repaired. At best, this incident will result in product delays. At worst, it will increase operational costs and impact customer satisfaction—potentially damaging your organization’s reputation and competitive advantage.

Unplanned downtime—a period in which a system, machine, or piece of equipment is unexpectedly out of operation—poses serious threats to industrial profitability. Equipment failure, software issues, power outages, and human error can all lead to numerous downstream impacts. These can range from producing waste and interrupting supply chain networks to causing SLA compliance issues and equipment safety hazards. Thankfully, organizations can adopt measures to reduce unplanned downtime and reclaim those lost production hours, all while increasing overall efficiency and customer satisfaction.

Before trying to reduce unplanned downtime, it is important to understand how it is measured. Unplanned downtime is typically calculated based on lost time or lost revenue. When calculating unplanned downtime on the basis of time, the formula is:

However, when organizations are more concerned with lost dollars than lost time, they may prefer to calculate unplanned downtime as a cost. In this case, the formula is:

While this formula provides a baseline measure for calculating the cost of unplanned downtime, other variables, such as overhead costs, can easily add to the total cost.

Unplanned vs. Planned downtime

Unlike planned downtime, which includes scheduled maintenance, updates, or upgrades, unplanned downtime is unpredictable and often results in lost productivity and increased costs. Planned downtime is typically accounted for by scheduling it during off-peak hours or during maintenance windows to minimize disruptions and ensure necessary repairs are completed efficiently. This also allows for better resource allocation, ensuring that maintenance teams are prepared with the necessary tools on hand. On the other hand, unplanned downtime catches teams off guard—often leading to rushed repairs, higher costs, and extended operational disruptions. Organizations can strategically schedule downtime to align equipment maintenance with production schedules and avoid unexpected interruptions.

What are the main causes of unplanned downtime?

Understanding the primary causes of unplanned downtime is crucial for preventing these costly interruptions. Disruptions like equipment failure, human error, and power outages are common culprits capable of halting operations and causing a ripple effect of negative consequences. When these issues occur, they can lead to significant production delays, skyrocketing costs, and compromised safety—ultimately affecting your organization’s bottom line and reputation. By understanding the common causes, you can better anticipate and mitigate the risks of unplanned downtime—ensuring your operations remain streamlined and efficient.

Equipment failure

Equipment failure can occur as a result of natural wear and tear, in which components degrade over time and eventually break down if not regularly maintained or replaced. Defects and inadequate preventative maintenance can also play a role, as undetected issues can quickly escalate into significant failures and widespread operational disruptions. Organizations can mitigate these risks by implementing regular inspections and predictive maintenance—ensuring smoother operations.

Human error

Incorrect handling of equipment and similar mistakes can lead to malfunctions, and improper maintenance practices can cause errors in repairs or overlooked safety procedures. A lack of training can exacerbate these issues—all of which ultimately contribute to unplanned downtime. While human error is difficult to eliminate, it can always be mitigated. Robust training procedures, continuous improvement, and lean processes can all proactively prevent unplanned downtime.

Power outages

Outages can stem from utility failures, where issues with the external power grid cause sudden and widespread loss of power to facilities. Internal electrical system malfunctions, such as failures in circuit breakers or generators, can also lead to power interruptions and unplanned downtime. And natural disasters like storms, floods, or earthquakes can further damage infrastructure, resulting in extended outages and significant operational disruptions. While these events are impossible to predict, investing in resilient infrastructure and implementing thorough contingency planning can help equip organizations for unexpected outages.

What are the consequences of unplanned downtime?

Halted production processes can have far-reaching consequences, disrupting operations, damaging equipment, and creating bottlenecks throughout the supply chain. These interruptions hinder overall efficiency and result in significant financial losses. By understanding these impacts, organizations can take proactive measures to mitigate downtime and protect their operations.

Lost production capacity

When operations come to an unexpected halt, the effects cascade across the entire production chain. These interruptions reduce immediate output and complicate efforts to catch up on missed production targets, impacting overall efficiency and potentially delaying future manufacturing schedules.

Equipment damage

Machinery might require costly repairs or replacements if sudden stops or a loss of control results in equipment damage. This increases maintenance expenses and extends downtime while repairs are made, or new equipment is sourced and installed.

Supply chain disruptions

Halted production can lead to delays in order fulfillment—ultimately affecting downstream operations and causing interruptions throughout the entire supply chain. These disruptions can create bottlenecks that compromise the timely delivery of goods to customers and partners, impacting customer satisfaction and overall business performance.

Overall efficiency

Unplanned downtime can pose serious threats to the efficiency of a production process by disrupting workflows, causing delays, and reducing the overall productivity of operations. It leads to wasted resources and increases the time needed to complete tasks, meaning meeting production targets becomes a challenge, and overall efficiency takes a significant hit.

Financial impact

Unexpected downtime incurs significant financial costs stemming from lost production, increased labor, and emergency repairs. Delayed deliveries and related penalties can also lead to missed revenue opportunities. These impacts reach far beyond an organization’s finances, though. Over time, even small disruptions can erode an organization’s reputation, introducing the threat that customers might take their business elsewhere.

While all these consequences can have critical downstream impacts, there are ways to circumvent major losses and delays. Understanding and addressing the root causes of unplanned downtime can strengthen supply chain resilience, improve operational efficiency, and enhance customer satisfaction in the long run. Additionally, careful planning and proactive measures such as real-time equipment monitoring and predictive maintenance allow organizations to efficiently recover from unplanned downtime and proactively avoid it in the future.

The cost of unplanned downtime

Unplanned downtime can wreak havoc on an organization’s finances, creating a ripple effect of expenses and lost opportunities. From labor and production costs to overhead and potential sales losses, downtime’s financial impact is significant. By understanding the costs associated with unexpected downtime, organizations can strategize to minimize widespread impacts and protect their bottom line.

Labor costs

Unplanned downtime significantly impacts labor costs by forcing employees to halt their work unexpectedly. Even though workers may be idle during these time periods, they still require compensation—leading to increased labor expenses without corresponding productivity gains. Moreover, to recover lost production time, companies often resort to overtime pay, further escalating labor costs. And when unplanned downtime requires specialized technicians or urgent service, premium rates can strain operational budgets and affect profitability.

Production costs

When customer deliveries, inventory management, and overall productivity are contingent on strict production schedules, the last thing you want is unplanned downtime. Downtime can heavily disrupt schedules, leading to the inefficient use of resources and materials, increased labor costs, and potential revenue loss due to delayed shipments or production bottlenecks.

Startup costs

Once production processes have come to a halt, it takes effort to power everything up again. Restarting all the equipment takes time and resources—machinery needs to be recalibrated and processes must be resumed. And the consequences of starting back up—a surge in energy, lost production hours, extra quality inspections, and scrap and rework—all raise overall costs significantly.

Overhead costs

Overhead costs can quickly accumulate even during periods of unplanned downtime. Even when machinery is not functioning, overhead operations continue, meaning utilities, rent, and administrative expenses pile up. This constant outflow of money without corresponding production output can strain budgets and reduce overall profitability.

Potential sales

Downtime of any kind leads to a loss of sales and market share. When production halts, it delays order fulfillment—causing customers to turn to competitors for their needs. Over time, repeated delays can damage a company's reputation, resulting in a loss of customer loyalty and diminished market presence. In an increasingly competitive market, even brief interruptions can have long-term effects on an organization’s sales and revenue growth.

Organizations can upend these costs by using digital manufacturing solutions to cut back on unplanned downtime. With heightened visibility into equipment performance, newly reclaimed production hours, and lower operating costs, organizations can begin increasing their capacity utilization to stay efficient and competitive.

How to reduce unplanned downtime

Organizations can eliminate unplanned downtime by gaining real-time data visibility into equipment performance and usage to fix problems before they result in interruptions to critical operations. By leveraging digital manufacturing solutions and predictive analytics, companies can proactively address potential issues, ensuring equipment runs smoothly and efficiently.

Conduct process audits

Process audits—structured reviews of processes to identify where improvements can be made—are a key component of continuous improvement and reducing unplanned downtime. To conduct effective process audits, it’s important to:

• Define objectives and assemble a team: Clearly outline the goals of the audit (reduce unplanned downtime), then form a cross-functional team to incorporate comprehensive perspectives from across the organization. When building the team, consider including employees from maintenance, operations, quality assurance, and management for a well-rounded group.

• Gather and analyze data: Collect data on current processes, equipment performance, maintenance records, and downtime incidents—then examine it to pinpoint specific issues contributing to unplanned downtime.

• Identify root causes: Dive deep into collected data to pinpoint specific factors contributing to unplanned downtime. This practice can help develop targeted action plans and refine processes for continuous improvement.

• Develop and implement an action plan: Formulate targeted action plans to address the root causes of downtime. This might look like updating maintenance schedules, implementing more robust training programs, or upgrading equipment.

• Monitor, measure, and refine: Continuously monitor the impact of the implemented changes on downtime and overall performance. By regularly reviewing the audit’s findings and refining processes as needed, organizations can seamlessly implement continuous improvement and further reduce unplanned downtime.

Use standard work

Standard work is a lean manufacturing concept that uses a detailed, documented approach to define the most efficient and effective method of performing a process. And by providing a consistent and reliable framework for performing tasks, standard work can help prevent errors, inefficiencies, and equipment failures. This way, organizations can feel confident in proactively addressing potential issues before they lead to costly downtime.

Develop proactive maintenance strategies

Equipment manufacturers in all types of industries have implemented IoT-enabled production practices to achieve initial value. But when IoT is used alongside predictive maintenance and service, organizations can make the most of their data to increase uptime. Predictive maintenance directly tracks an asset’s health, status, and performance in real time to reduce costly, unexpected breakdowns. This way, maintenance is scheduled based on live equipment conditions, rather than the amount of time that has passed since the last service date. By enabling technicians to detect issues in advance, predictive maintenance can:

• Cut unplanned downtime by up to 30%

• Avoid the risks of reputation-damaging outages

• Reduce costly truck rolls required by unexpected machine downtime

Implement factory monitoring

While many manual methods exist to reduce unplanned downtime, human errors, bias, and high labor costs can make them susceptible to issues. Remote monitoring uses IoT and AR technologies to automatically alert service teams when installed equipment is not operating to specification or needs attention. Equipped with the knowledge of how deployed products operate in real-time, service organizations can schedule maintenance based on the equipment’s needs—rather than on the calendar—before the customer even knows there is an issue.

Conclusion

Unplanned downtime is both a problem in itself, and a symptom of system issues. Downtime is often regarded as the biggest threat to resources, productivity, and profitability. Forward-thinking manufacturers make smart technology investments to proactively address downtime’s root causes— minimizing their disruptions. Implementing robust process audits, adopting standard work procedures, and leveraging the IoT for predictive maintenance and real-time production monitoring are key strategies for reducing downtime. And as the IoT continues to grow and advance, AI integrations will play a crucial role in predicting and mitigating downtime by identifying patterns, anomalies, and potential failure points.

Gaining insights into key initiatives that remove production constraints can be challenging. Data is often spread across disparate systems, and bottleneck reporting is manual. This can make it difficult to reduce unplanned downtime—but with PTC’s IoT solutions, you can uncover the insights you need to understand root causes. And once you have that visibility, it’s easy to fix problems before they result in costly interruptions to critical operations.