Unplanned inactivity, commonly called downtime, is one of the highest hidden costs that industrial companies face. Every minute of halted production represents lost revenue, accumulating operating expenses, and potential damage to reputation.
In fact, nearly 98% of organizations recognize that one hour of downtime can cost more than 100,000 dollars in direct losses. This includes not only missed production but also wasted materials, idle labor hours, and penalties for delays. Below, we examine the financial impact of downtime across various industries and explore ways to mitigate it.
While downtime is expensive in any sector, some critical industries face astronomical losses for every hour of unplanned stoppage.
Aberdeen Research reports that in manufacturing, downtime can cost around $260,000 per hour. Large manufacturers (Fortune 500 companies) report average annual losses of approximately $129 million per plant due to unplanned stoppages. Even with fewer incidents, the cost per event has risen sharply in recent years.
This sector suffers from some of the highest downtime costs. A Siemens study in 2022 revealed that a single hour of downtime in an automotive plant can exceed $2 million (an increase of nearly 50% compared to 2019). Put differently, one minute of a stopped assembly line can cost $30,000 or more in vehicles not produced.
In the energy sector, where continuity of service is vital, estimated losses average $2.5 million per hour of downtime. For example, the unexpected fall of a power plant or grid means not only lost revenue but also potential regulatory fines and service disruption to customers.
Estimates place an hour of downtime in oil and gas at around $500,000 in lost production. A Kimberlite Research study found that just 3.65 days of downtime per year (about 1% of the time) can cost an oil company more than $5 million. A typical offshore platform suffers about 27 days of downtime annually, equivalent to $38 million in lost production.
In defense and government sectors, downtime of critical systems can carry costs above $5 million per hour, as it involves national security, communications, or defense infrastructure. Beyond money, downtime in defense can translate into mission risk, which is why heavy investments are made in redundancy and continuity.
In addition to direct production and sales losses, downtime brings collateral costs. These include penalties for missed deliveries, overtime for maintenance staff, damage to reputation, and even an impact on employee morale. Frequent interruptions put teams under pressure to restore operations, which can lead to fatigue and increased turnover. All these factors increase the total cost of downtime well beyond the financial side.
Given the enormous cost, preventing downtime and reducing its duration are strategic priorities across industries. Companies are investing in proactive practices and technologies to minimize unexpected stoppages.
Condition monitoring and data-driven analysis can cut unplanned downtime in half. Detecting an unusual vibration in a motor and repairing it before failure avoids sudden stoppages. Studies show that fewer than 25% of organizations utilize predictive, data-driven maintenance, highlighting a significant opportunity. Those that do have reduced failure frequency and duration, saving millions in avoided costs.
Designing operations with redundancy, from backup power supplies to IT/OT failover systems, ensures continuity even if a critical component fails. For example, dual servers in parallel guarantee that if one goes down, the other takes over immediately, preventing a hardware failure from halting production. Investment in fault-tolerant infrastructure reduces the risk of catastrophic downtime.
Many plants are shifting from traditional architectures with local PCs and isolated servers to centralized, easily recoverable infrastructures. A clear example is adopting thin clients managed by ThinManager® from Rockwell Automation. This modernization replaces conventional workstations with simple terminals managed centrally, which simplifies support and accelerates recovery during failures.
In short, ThinManager® maximizes availability by drastically reducing recovery time and failure risk. A real-world case: at Dairy Farmers of America, migrating from aging PCs to ThinManager®-ready clients eliminated hours and perhaps days of downtime. Their engineering manager called it the best technology decision, as it let them focus on production rather than obsolete computers.
The financial cost of downtime is undeniable: millions of dollars lost in short stoppages across manufacturing, energy, oil and gas, and defense. Such losses justify strong investment in prevention strategies. Predictive maintenance, redundancy, and modernized architectures with ThinManager® and rugged computing are key steps to protecting continuity.
In our industry, preventing downtime means more than avoiding costs: it ensures on-time delivery, higher productivity, and customer trust.
That is why at VarTech Systems, together with strategic partners like Rockwell Automation and ThinManager®, we deliver rugged, reliable computing solutions that keep operations running. Our systems ensure minimal downtime, centralized monitoring, and rapid recovery, so every minute counts toward value, not loss.
Downtime is expensive, but we can control it with preparation and innovation. Reducing stoppages means safeguarding profitability today and ensuring operational resilience for tomorrow.
At VarTech Systems, our Project Managers—with an average of 15+ years of industry experience—are ready to customize a computer, monitor, or HMI workstation solution to meet your needs. Drawing from extensive backgrounds in manufacturing, military, oil and gas, and marine applications, they provide expert guidance throughout your project journey.
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Based in Clemmons, North Carolina, VarTech Systems Inc. engineers and builds custom industrial and rugged computers, monitors, and HMIs.
