A formal maintenance program helps manufacturers avoid unexpected costs

In the insurance business, we see far too many situations where manufacturing operations are interrupted by mechanical breakdowns that could have been prevented.

What causes equipment to fail? Here are some examples:

  • Power surges and electrical exposures
  • Air conditioning or heat related equipment, such as boilers 
  • Technology
  • Solar panels, wind turbines and other alternative energy sources
  • Mechanical breakdown of your production equipment such as CNC machines - which can also occur from a power surge 

How can you prevent equipment breakdown in your manufacturing business? 

The best way to start is by formalizing your preventive maintenance program. Most manufacturing operations have some sort of maintenance procedures and schedule. How well they are documented - and followed - can vary. 

Here are three tips that our risk engineering team has learned to be effective:  

  1. Make a list of tasks to be performed, including frequency, estimated task completion time, tools needed and who will perform the tasks. 
  2. Note the conditions while the tasks are being performed: Does the machine need to be on and functioning or shut off entirely? 
  3. List instructions on how to document tasks and results, as well as the contact person should an issue be discovered. 

A formal maintenance program will help your bottom line. 

Unanticipated repairs not only cost you financially, but also take time. If you have a preventative maintenance program in place, you can budget your costs as they relate to your equipment.

If something breaks down suddenly and needs emergency repairs, you may also pay a lot more for labor. Once your equipment has been repaired, overtime may be needed to get production back up to speed. Products may need to be expedited. 

A preventative maintenance program may not stop catastrophic events from occurring. But it will ensure your equipment has a longer life cycle, reduce failures and can generate energy savings. 

As an insurance professional, I'll add another reason to have a formal maintenance program - it might help you get better insurance rates.  It will also help inform your discussion with your agent about what coverage you need in your insurance program.   

This may be one of those "slow down to speed up" situations, but committing to a maintenance program will help you run at your most effective and efficient level. And, you can rest assured that you're going to get the most out of the complex equipment you've invested in.  
Looking for more expertise on equipment breakdown and maintenance? 

State Auto's partner, Munich RE/Hartford Steam Boiler, has an insightful blog related to equipment breakdown and how to prevent potential problems.   

And, hopefully this is obvious, but this is another reason you need an independent insurance agent to help you work through your risk management program.


State Auto Insurance makes no representations or guarantee as to the correctness or sufficiency of any information contained herein, nor guarantees results based upon use of this information. State Auto does not warrant that reliance upon this document will prevent accident and losses or satisfy federal, state and local codes, ordinances and regulations. The reader assumes entire risk as to use of this information.

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