How to Calculate Equipment Downtime

Operations and revenue come grinding to a halt whenever unexpected machine downtime rears its ugly head. As a maintenance manager, estimating just how much equipment downtime costs your company per hour is critical; armed with that knowledge you can create a strong business case for investing in a maintenance management system. By automating preventive maintenance and being data-driven with predictive capabilities, managers who get the most out of modern CMMS features can easily increase machine uptime and streamline operations within their department. Have you ever wondered just how much downtime costs your organization on a weekly, monthly, or annual basis?

Instructions:

This simple tool allows maintenance managers to plug in estimates about their operations and generate the average cost of equipment downtime per hour.  They can then use this machine downtime analysis to decide where equipment can be replaced and downtime can be reduced.

Simply click on the zeros on the right side of the tool to enter in your company’s information  (You may also click “expand to full screen” to view a larger version of the calculator).

⇒ 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.

Now that you know how much costly downtime can be, head over to Software Advice’s recent blog article to read more about the tools that can help you minimize it.

Maintenance Connection has also developed a ground-breaking ROI calculator which helps companies see what key areas they can be saving money in their maintenance budget.