Calculator
What does a minute of downtime cost you?
Enter seven numbers from your line. The calculator shows the cost of a minute, a stop, a month and a year of unplanned downtime, and what a 30% reduction would be worth.
Inputs
What to enter, and where to find it
- Production rate (units/hour)
- The rate the line runs at when it is running, not the daily average. Use your planned or rated rate for the product mix you usually make.
- Contribution margin per unit ($)
- Selling price minus variable costs (materials, energy, freight, commissions) for one unit. Your finance team can usually supply it; it is lower than price and higher than profit.
- Crew idled during a stop (people)
- Operators and support staff who stand idle while the line is down. Leave out people who move to other productive work.
- Loaded labor rate ($/hour)
- Wages plus benefits, payroll taxes and other per-hour costs, averaged across the idled crew.
- Unplanned stops per month
- Breakdowns and other unscheduled stops long enough to log. Planned changeovers and maintenance don't count.
- Average stop duration (minutes)
- From the moment the line stops to the moment it is back at rate, including restart, not just repair time.
- Restart scrap per stop (units)
- Units scrapped while the line comes back up to temperature, register or speed after each stop.
- Material cost per scrapped unit ($)
- The material and conversion cost already sunk into each scrapped unit.
The method
How the downtime cost calculation works
The calculator adds up three costs that every unplanned stop incurs: the margin you don't earn while the line is down, the labor you pay for while it is down, and the product you scrap getting it back up.
- Cost per minute = (production rate ÷ 60 × contribution margin per unit) + (crew idled × loaded labor rate ÷ 60)
- Cost per stop = cost per minute × average stop duration + restart scrap per stop × material cost per scrapped unit
- Monthly cost = cost per stop × unplanned stops per month
- Annual cost = monthly cost × 12
Finally, the calculator shows what a 30% reduction in unplanned downtime would be worth per year: 30% of the annual cost. That figure is an illustrative planning assumption, not a promised result. In our corrugator example engagement, the modeled reduction on monitored assets was about 35%; your result depends on which failures your stops come from.
Contribution margin is used rather than revenue on purpose. When the line stops you lose the sale, but you also don't spend the materials and energy that would have gone into it. Margin is the honest measure of what you lose.
Worked example
An illustrative line, step by step
Illustrative inputs: 1,200 units/hour, $4.50 contribution margin, 6 people idled at $42/hour, 14 unplanned stops per month averaging 22 minutes, 150 units of restart scrap per stop at $1.80 each.
| Step | Calculation | Result |
|---|---|---|
| Lost margin per minute | 1,200 ÷ 60 × $4.50 | $90.00 |
| Idle labor per minute | 6 × $42 ÷ 60 | $4.20 |
| Cost per minute | $90.00 + $4.20 | $94.20 |
| Cost per stop | $94.20 × 22 + 150 × $1.80 | $2,342.40 |
| Monthly cost | $2,342.40 × 14 | $32,793.60 |
| Annual cost | $32,793.60 × 12 | $393,523.20 |
| Value of a 30% reduction | 30% × $393,523.20 | $118,056.96 per year |
What the number leaves out
Costs the calculator deliberately ignores
The calculator counts only costs you can defend line by line in a budget meeting. Real stops often cost more, through items that are harder to pin down:
- Customer penalties. Late-delivery penalties, chargebacks and fines written into supply agreements.
- Overtime. Extra shifts or weekend work to recover lost output, often at premium rates.
- Expedited freight. Air or dedicated shipments to make a delivery date the stop put at risk.
- Reputational cost. Scorecard marks, lost preferred-supplier status and the next contract that goes elsewhere.
- Maintenance labor and parts. Emergency repairs cost more than planned ones, and rush-ordered parts cost more again.
- Quality risk after a restart. The first good-looking units after a stop are often where defects hide.
If you know these figures for your plant, add them to the result. If you don't, leave the calculator's figure as a conservative floor and say so when you present it.
Using the result
Turning a downtime cost into a decision
- Rank your lines. Run the calculator for each line or critical asset. Monitoring and maintenance effort should follow cost per minute, not the loudest complaint.
- Check whether the line is the constraint. If a stop's lost output is recovered later without overtime, the true lost margin is close to zero, and the labor and scrap terms are what remain.
- Size the investment. Compare the value of a 30% reduction with the cost of condition monitoring on the assets behind most of your stops. Our published pricing makes that comparison straightforward.
- Set a baseline. Use the same inputs as the starting measurement for a Proof of Value, so the result at the end is measured the same way. Microstops too short to log are covered by OEE tracking.
Grace Nakamura-Hill's article What a minute of downtime really costs walks through the method in more depth, including how to defend each input to a finance team.
FAQ
Questions we hear often
Should I use revenue or contribution margin?
Contribution margin. Revenue overstates the loss, because a unit you don't make also doesn't consume materials, energy or freight. Margin is the figure a finance team will accept.
What counts as an unplanned stop?
Any stop that wasn't on the schedule, such as breakdowns, jams that need maintenance or material shortages. Planned changeovers, maintenance and breaks are excluded. Very short stops that operators clear themselves are better measured with OEE tracking than entered here.
What if our line isn't the bottleneck?
Then a stop may not cost you a sale, because the output can be recovered later. Set the contribution margin to zero, or to the overtime cost of recovery, and keep the labor and scrap terms.
Where does the 30% reduction come from?
It is an illustrative planning figure, not a promise. Actual reductions depend on how many of your stops come from failures that monitoring can predict. A Proof of Value measures your own result against an agreed baseline.
Now find out which stops you could have seen coming
Bring your stop log to a 45-minute discovery call. We'll tell you which failures condition monitoring can predict and what a Proof of Value on 25 assets would measure.