- Cost of one hour stopped
- 570
- Cost of one unplanned stop
- 1,860
- Unplanned downtime a month
- 11,160
- Unplanned downtime a year
- 133,920
- A year at 25 % fewer stopped hours saves
- 33,480
The short answer
The cost of an hour of unplanned downtime is the margin on the output you lose plus the cost of the people left waiting, and each stop adds scrap, restart and call-out costs. For example, a line that loses 120 units an hour at a margin of 4, with 6 people at 15 an hour idle, costs 570 an hour; six 3-hour stops a month with 150 of scrap each cost about 11,200 a month, or 134,000 a year.
Formula
Cost per hour = output lost per hour × margin per unit + people idle × cost per person-hourCost per stop = cost per hour × hours per stop + scrap, restart and call-outCost per year = cost per stop × stops per month × 12
How to use it
- Enter what the line or machine makes in an hour and the margin on each unit (sale price minus material and variable cost).
- Enter the people who wait during a stop and what an hour of their time costs.
- Enter the scrap, restart and call-out cost of a typical stop, how many stops you have a month and how long they last.
- Set the share of stopped hours you think early warnings could avoid; it is your assumption, not a promise.
Assumptions
- Lost output is not made up later in overtime; if it is, use the overtime cost instead of the margin.
- Any currency works; the calculator does not convert.
- The savings line is only as good as the reduction you assume. Start low and measure it.
Frequently asked questions
What is a typical cost of downtime?
It ranges from tens to many thousands per hour depending on the line. Work it out for your own bottleneck machine; that is the number that matters.
Should I count the whole line or one machine?
Count what actually stops. If one machine stops the whole line, use the line’s output.