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True cost of downtime

Add up everything an unplanned stop costs, separate what grows with duration from what is fixed per event and see how much a preventive and predictive maintenance program returns each year.

Pre-sizing and estimating tool: results do not replace design, calculations or reports signed by a licensed professional, nor verification against the applicable codes and standards.

Preliminary estimate
Lost production
Costs during the stop
Costs per event
Frequency
Preventive and predictive maintenance program
Economic analysis
—True cost of each downtime hour
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Cost breakdown of an average stop

Items that grow with duration and fixed items per event.

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Event cost versus duration

The fixed part (repair, restart, scrap, penalties) weighs more in short stops.

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Annual cost today and with the program

The program cost is included in the proposed column.

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Project payback

Cash flow of the improvement: investment in year 0 and annual savings escalated at the rate entered, discounted at the MARR.

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The report gathers this page's inputs, results, equations, assumptions and references, with fields for project, engineer and revision. In the print dialog, choose Save as PDF.

Method, assumptions and references

Equations used

Hourly cost = output × (1 − r) × margin + output × r × recovery cost + people × hourly cost × (1 − reassigned) + power × rate
Fixed cost per event = repair + restart energy × rate + scrap × material cost + penalties
Event cost = hourly cost × duration + fixed cost; annual cost = events × event cost
With the program: events × (1 − re) × (hourly cost × duration × (1 − rd) + fixed cost) + program cost

Assumptions and limits

  • Contribution margin is lost only on the share of output that cannot be recovered later (bottleneck or lost demand).
  • To avoid double counting: if the margin already deducts variable direct labor, set idle people to zero.
  • The program’s frequency and duration reductions are user estimates; DOE references cite 35% to 45% less downtime with a well implemented predictive program.

Standards and technical documents

  • ISO 55000:2024 e ISO 55001:2024: Asset management
  • EN 15341:2019: Maintenance key performance indicators
  • U.S. DOE FEMP, Operations & Maintenance Best Practices Guide, Release 3.0 (2010), chapter 5
  • SMRP Best Practices, 5th ed.: metrics for downtime and maintenance cost

U.S. regulations

  • Fair Labor Standards Act (29 U.S.C. 207): overtime premium of 50% for hours over 40 per week
  • OSHA 29 CFR 1910.147: lockout/tagout during repairs
  • Uniform Commercial Code, Article 2 (§2-713 and §2-715): buyer’s damages for late or failed delivery

Frequently asked questions

How do you calculate the cost of an hour of downtime?

Add the contribution margin that will not be recovered, the extra cost of recovering the rest, labor left without work and energy used while stopped. Then add fixed costs per event: repair, restart, scrap and penalties.

Why not use revenue per hour?

Because a stop does not only remove revenue: it also avoids spending raw material and direct energy. What you lose is contribution margin, and only on the share that never comes back.

What does predictive maintenance return?

It depends on history. The DOE O&M guide cites 35% to 45% less downtime and 70% to 75% fewer breakdowns with mature predictive programs. Use your own equipment data.