How breweries can mitigate the risk of machinery breakdown
A craft brewery has many moving parts. In order to produce a high-quality product your business relies on a whole range of equipment and machinery for brewing, packaging and refrigeration. A breakdown in any of these critical pieces of equipment can lead to lengthy delays, an inability to fulfil supply obligations, and incur increased costs, affecting profit margins.
Craft breweries and microbreweries are by definition smaller operations. Therefore, even a small halt or delay in production because of machinery breakdown could have a significant, potentially devastating impact on the business.
Don’t let machinery breakdown become a bottleneck
There are various steps that breweries can take to manage and mitigate the potential impact of this risk. Here are four key recommendations to consider as part of your risk management approach:
- Regular cleaning procedures – Many brewers would already be doing this in order to maintain a consistent recipe, and high health and safety standards; however, having regular cleaning procedures in place is integral to ensuring your machinery and equipment is operating productively and efficiently.
- Preventative maintenance – Conducting regular inspections and a diligent maintenance schedule can help identify problems early and prevent small issues escalating. Breweries should also consider non-brewing equipment needed to produce and store beer such as cool rooms.
- Predictive maintenance – This involves combining historical data (such as maintenance records and inspection results) and regular measurement insights (scheduled testing) to ensure corrective measures are implemented before the predicted point of failure. Breweries should consider both maintenance methods to create optimal machinery conditions.
- Insurance – There are instances where you can’t avoid machinery failure regardless of how diligent you are in trying to avoid it, and this is when insurance becomes important. Arranging machinery breakdown cover as part of your brewery insurance can help provide financial cover for cost of replacement or repair. Business interruption insurance can also help cover for the loss of income caused by a temporary halt to production, for example, supply chain disruptions.
What is machinery breakdown insurance?
Machinery breakdown insurance typically provides cover for your physical machinery and equipment if they break or are damaged. A suitable insurance policy may help with the cost of repair or replacement of the machinery and any damage to property caused by broken equipment.
Case study: Brewery equipment breakdown results in pouring money (and beer) down the drain
More equipment can often mean more exposure to breakdowns. In this example, a craft brewery was left with not only the cost of fixing their equipment but also a batch worth thousands of dollars that went down the drain when a solenoid on one of their tanks stopped working and no cooling fluid made it into the beer.
Unfortunately, the beer was not salvageable and the brewery was forced to dump the entire batch. In this instance, the business could have been entitled to recuperate the cost of fixing or replacing the affected equipment through their machinery breakdown policy.
Don’t let your passion and hard work go down the drain due to a machinery breakdown. Identifying and managing the risks around your brewery’s operations should take priority. If time or capacity is an issue, consider where you can outsource some of it, and talk to an experience risk advisor or broker who understands your niche business and can provide guidance and do some of the work for you in securing quotes, but also processing claims when the time comes.