Short answer:
Downtime cost per hour = lost margin per hour + idle labour per hour + repair cost per hour + knock-on costs per hour
Annual downtime cost per asset = downtime cost per hour x unplanned downtime hours per year
Run it for your critical machines with the free equipment downtime cost calculator, then rank the results. The top three or four assets are where maintenance investment pays back fastest.
The four parts of downtime cost
| Component | How to estimate it | Often forgotten |
|---|---|---|
| Lost production margin | Units per hour x contribution margin per unit (revenue minus variable cost) | Use margin, not revenue, unless lost sales are permanent |
| Idle labour | Operators who cannot work x loaded hourly rate | Supervisors and downstream lines also stop |
| Repair cost | Technician hours x rate + parts + contractor callout | Expedited shipping on emergency parts |
| Knock-on costs | Overtime to catch up, scrap and rework, late-delivery penalties, restart losses | Customer churn and reputation |
Worked example
An illustrative packaging line:
- Output: 600 units per hour at USD 1.50 contribution margin = USD 900/hour
- Idle labour: 6 operators x USD 30 = USD 180/hour
- Repair: 2 technicians x USD 45 + parts averaged over a typical 4-hour failure = USD 220/hour
- Knock-on: overtime and scrap = USD 150/hour
Total: USD 1,450 per hour. With 60 hours of unplanned downtime a year, that single line costs about USD 87,000 a year in downtime alone.
Where to get the inputs
- Downtime hours: your maintenance log, work orders or production reports. If you have none, ask supervisors for the last three breakdowns per machine; that alone is revealing.
- Margin per unit: finance or your ERP.
- Labour rates: use the fully loaded rate (wages plus benefits and overhead).
- Repair history: parts invoices and contractor bills.
Turn the number into decisions
- Rank assets by annual downtime cost.
- Find the failure modes on the top assets: what breaks, how often, how long the fix takes (MTBF and MTTR).
- Add preventive tasks for those failure modes: inspections, lubrication, wear-part replacement. See our preventive maintenance schedule guide.
- Stock critical spares for parts with long lead times.
- Track downtime hours and OEE monthly to prove the payback.
Planned vs unplanned downtime
Planned downtime (scheduled maintenance, changeovers) costs far less per hour: you choose a quiet time, parts and people are ready, and nothing else is damaged. The goal is not zero downtime but converting unplanned stops into short planned ones. A healthy maintenance operation does most of its work as planned jobs.
Frequently asked questions
Should I use revenue or margin for lost production?
Use contribution margin when you can recover the output later (overtime, another shift). Use lost revenue when the sale is gone for good, for example perishable goods or missed shipping windows.
What counts as downtime?
Any time the asset cannot run when it is scheduled to. Include slow running and minor stops if you track OEE; otherwise start with full stops.
How do I reduce downtime quickly?
Start preventive maintenance on the two or three costliest assets, keep critical spares on site, and make sure every breakdown is logged with a cause so repeat failures become visible.
Do I need software to track this?
Not to start, but spreadsheets break down once you have more than a few assets or technicians. A CMMS logs every job, schedules preventive work and reports downtime automatically.
Cut your downtime
Calculate your number with the downtime cost calculator, then schedule the fixes in ZetMaint CMMS. Choosing a system? Read how to choose CMMS software. Industry setups: manufacturing, hotels, hospitals.
