Downtime Calculator: How Much Does Equipment Downtime Really Cost You?

Yesterday was tough. My computer crashed, the copier broke, and our coffee machine went on strike while I was rushing to meet a deadline. I called our IT tech, the copier repairperson, and the local coffee shop to fix the problems (not necessarily in that order), and then my blood pressure spiked when I figured out how late I’d have to stay to get everything done.

Maintenance managers know exactly what I’m talking about. The maintenance team is on the frontline when things aren’t working, and we spend lots of time talking to management about the cost of downtime in manufacturing. But do we spend the time to really understand what it is, or how it’s measured?

According to Wikipedia, “The term downtime is used to refer to periods when a system is unavailable. Downtime or outage duration refers to a period of time that a system fails to provide or perform its primary function.”

That definition covers the basics, but in the real world just about every organization defines and measures equipment downtime a little differently. Here at MPulse, we’ve learned to dig a little deeper when our customers start asking questions about metrics like mean time between failures (MTBF), mean time to repair (MTTR), or total downtime. We don’t just assume we know what they want—it’s our job to understand what they’re really looking for and show them how their MPulse Software, Inc can help them measure it on their own terms.

Everyone needs a starting point to understanding downtime, and we thought this production downtime calculator recently published by Software Advice* was a pretty good one. (Click here for instructions.) Play around with it and ask yourself these questions:

  • Does this production downtime calculator make sense for my operation?
  • Is it missing anything?
  • Do I know where to find the information it’s asking for?
  • Do the results make sense?
  • How could I improve upon the calculator to better understand the cost of downtime in manufacturing?

Knowing how much equipment downtime costs your organization is just the beginning. Reducing equipment downtime—and the related loss of productivity—is one of the biggest benefits our CMMS users find with their MPulse Software, Inc. It all comes back to the basics: when your organization’s equipment hasn’t been maintained properly, you’re going to experience more downtime. That translates into lost dollars and intense pressure on the maintenance team to get production running again. The less downtime you experience in the first place, the better. The shorter duration of that downtime when it does happens, the better.

I was lucky yesterday. I lost two hours of my time, plus $4.50 for an extra-large coffee. You can bet I’m gonna do a few things differently to prevent a day like that from coming around again soon. Proactive maintenance managers are doing the same thing. If you need help getting started, contact us to learn more about our equipment maintenance software.

Calculator Instructions (courtesy of Software Advice):

This simple tool allows maintenance managers to plug in estimates about their operations and generate an average cost of machine downtime per hour. Alternatively, manufacturing companies can enter information to find their estimated amount of revenue loss per hour of downtime.

  • Simply click on the zeros on the right side of the tool to enter in your company’s information. (You can also download a version by clicking the download button on the black bar below the tool.)
  • Employee costs per hour: The average employee salary divided by number of hours worked, multiplied by the number of employees.
  • Average revenue per hour: An estimate of how much revenue your company generates in a given hour.
  • Employees affected by downtime: An estimate of the percent of employees who would be unable to work due to shut down machinery.
  • Revenue affected by downtime: An estimate of the percent of revenue lost due to machine downtime.
  • Number of units produced per hour: An estimate of the number of units produced in one hour.
  • Average profit per unit: The amount of profit earned for each unit produced.
  • Number of hours of downtime: The number of hours of downtime expected.

* Equipment Downtime Calculator provided by Software Advice. Visit MPulse’s company profile on Software Advice.