Downtime Cost Calculator
Calculate the financial cost of unplanned machine or line downtime.
Calculator
No signup required. Results are indicative—verify for your standards.
Lost contribution: ₹2,00,000
Total downtime cost: ₹2,10,000
Formula
Downtime cost = (Lost output × Contribution margin per unit) + Fixed cost absorbed during downtime + Labour cost during downtime + Overtime cost to recover lost production.
Example calculation
Line produces 100 units/hr at ₹500 contribution/unit. 4-hour breakdown: Lost contribution = 4 × 100 × 500 = ₹2,00,000. Labour idle cost ₹10,000. Total downtime cost ≈ ₹2,10,000.
Engineering notes
Actual downtime cost is almost always higher than just lost output. Include emergency repair costs, expediting costs, customer penalties, and the cost of catching up with overtime or additional shifts. Use this figure to justify preventive maintenance and spare parts inventory investment.
When to use this calculator
- Maintenance budget justification — show management the financial impact of avoiding breakdowns
- Spare parts investment — calculate how much inventory holding cost is justified to prevent downtime
- TPM (Total Productive Maintenance) — quantify the baseline cost before TPM to demonstrate ROI after
- SLA negotiation — determine acceptable breakdown response time from a financial impact perspective
- Insurance claims — document lost production value for business interruption insurance claims
Frequently asked questions
- What costs should I include in a downtime cost calculation?
- Direct costs: lost production revenue or contribution margin, idle labour wages, idle overhead absorption. Indirect costs: emergency repair parts and labour (often at premium rates), expediting costs (air freight, express delivery), overtime to recover production, customer penalties or premium freight on late orders, cost of quality issues from rushed catch-up production. Many plants underestimate downtime cost by 40–60% by capturing only direct costs.
- How do I measure OEE and relate it to downtime cost?
- OEE (Overall Equipment Effectiveness) = Availability × Performance × Quality. Availability = (Planned time − Downtime) / Planned time. A plant with 85% OEE vs 75% OEE on a line with ₹10,00,000/day contribution has an opportunity worth ₹10,00,000 × (0.85 − 0.75) = ₹1,00,000/day or ₹3.6 crore/year. Use the OEE calculator alongside this tool.
- How much should I spend on preventive maintenance to avoid downtime?
- A general rule: preventive maintenance spend is justified if it is less than the expected downtime cost it prevents, discounted for probability. If a bearing failure costs ₹2,00,000 in downtime and occurs once every 18 months on average, the expected annual cost is ₹1,33,000. Replacing the bearing preventively every 12 months for ₹5,000 in parts and ₹10,000 in labour is clearly worthwhile.