“Lost power can be detrimental to a manufacturing company, costing them money every second the facility is without electricity,” says Dan Piggot, account manager at Generac Power Systems. “Product lines can be brought to a standstill, which can translate into lost product, a decrease in production and the possibility of a breakdown of the machinery.”
Let’s look at some numbers.
According to a 2017 report by research firm Vanson Bourne, about 8 in 10 companies in manufacturing and several other industries experienced unplanned downtime in the previous three years. A survey by S&C Electric Co. found that more than half of manufacturing companies reported power outages of an hour-plus in the previous year.
How much would an hour of downtime from a power outage cost you? Figuring out this number can help you determine your return on investment of a power generator. Start by examining your manufacturing and labor costs.
From Peter Brand, writing for Oden Technologies: “Let’s say a company can produce 100 units per minute, and each of these units represents a potential of $1 of profit. For this company, the cost of downtime in manufacturing based on lost production would be $100 per minute, $6,000 per hour, etc.” Carrying the example further, a 16-hour day without power could cost this company $96,000 in lost production.
Read more: Will Your Manufacturing Facility Be Ready If a Disaster Strikes?
Not only would a company be losing out on production revenue during a power outage, it would still have to pay employees for their idle time on-site. To estimate this cost at your facility, multiply the following factors:
- Number of employees at the facility during the outage
- Average hourly wage of those employees
- Number of hours of power outage
For example, if your company employs 18 workers who earn $18 per hour on average, you are paying $324 per hour for no work to be done during a power outage.
Besides productivity loss, there may be other costs involved, Data Foundry says. These include the cost of employees working overtime to make up for the productivity lost during the outage and the cost of disruption in the supply chain caused by the downtime.
Then there are intangible costs, such as damage to a company’s reputation caused by missing delivery deadlines to customers.
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This article read like an advertisement given there's only one Brand put forth.
58Hi Warren
Thank you for that feedback. The intent is to share information; this article wasn't intended to be an advertisement. We encourage you to explore the site more.
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51Thanks for pointing out that portability is also one of the factors to consider when planning to get a new commercial generator system. I plan to look into that because I'm thinking about setting up a new office for a business. Being able to find a good generator for it will help a lot in emergency situations.
https://beacongenerators.com/commercial-generators
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