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Downtime cost calculator: what one stop really costs
The cost of downtime = lost output (or the overtime to make it up) + idle labor + repair labor + parts + scrap + expedites and penalties. A 40-minute stop on a machine that makes 30 good parts an hour at $12 margin, with one operator idle, half an hour of maintenance and an $18 insert, costs about $311; four of those a month is $14,920 a year. Enter your own numbers below. Morsa puts this number on every stop in the morning brief, with the reason, so the expensive ones get fixed first.
Updated October 21, 2026
The formula, line by line
| Line | How to work it out | In the example |
|---|---|---|
| Lost output | 20 parts x $12 margin | $240 |
| Idle crew | 0.67 h x 1 people x $38 | $25 |
| Repair labor | 0.5 h x $55 | $28 |
| Parts and tooling | as entered | $18 |
| Scrap | as entered | $0 |
| Expedites, penalties, outside service | as entered | $0 |
40 minutes down, 30 parts per hour, $12 margin per part, 1 person at $38 an hour loaded, 0.5 repair hours at $55, $18 insert.
Use contribution margin (price minus material and other variable cost), not the selling price: the material you did not use is not lost. Use lost output only when the machine is the bottleneck or you are sold out. If the parts can be made up later, the real cost is the overtime, so switch the calculator to overtime.
What the big studies say
Siemens’ True Cost of Downtime 2024 report, based on 181 interviews at large industrial companies, puts a lost hour at $36,000 in fast moving consumer goods and $2.3 million in automotive, and estimates that the world’s 500 biggest companies lose about $1.4 trillion a year, 11% of revenue, to unplanned downtime. A mid-size plant’s numbers are smaller, which is why the useful number is your own, per machine, from your log.
Costs people forget
Overtime to catch up, often at 1.5 times the rate, when the parts must ship anyway.
Expedited freight for the late order, and late-delivery penalties in customer agreements.
Scrap from the parts that were in the machine when it stopped, and the first parts after the restart.
Knock-on stops: the next operation waiting for parts. Count it if the next machine had nothing else to run.
Repeat stops: one 40-minute stop is a repair; four a month is a project. The yearly figure shows the difference.
Downtime percent and cost per hour
Downtime percent = downtime / planned production time x 100. Cost per hour of downtime = cost of the stop / hours down; in the example $466. Use the per-hour figure to compare machines, and the yearly figure to justify a fix.
The modern way: the log writes itself
Paper logs and spreadsheets fail the same way: the stop happens at 2 AM, the note gets written at the end of the shift, if at all, and the reason says “machine down”. Plants that run an AI operations agent such as Morsa stop asking operators to fill in forms. Overnight, Lathe 6 is down 40 minutes. Morsa takes the alarm code from the machine and the operator’s note from the shift chat (“chips wrapped on bar feeder”), codes it, sends maintenance a work order for tonight and asks the tool room for chip breaker inserts. It is the third time this week, so the machine builder’s service team gets an email with the alarm log attached. The 6 AM brief shows the 40 minutes with its reason, and the fix is already moving. People approve; nobody retypes.
Common questions
How do you calculate the cost of downtime?
Multiply the hours down by the margin of the parts you could not make (or by the overtime to make them later), add the idle labor, the repair labor, parts, scrap and any expedites. The calculator shows each line.
What is the average cost of downtime in manufacturing?
Studies of very large companies give tens of thousands to millions of dollars an hour, depending on the industry. For a single machine in a mid-size plant it is usually hundreds to a few thousand dollars an hour. Measure your own.
Related tools
WHERE MORSA FITS
When a machine stops, the reason and the fix should already be moving.
Morsa reads the alarm from the machine and the operator’s note from the shift chat, codes the stop, opens the work order, asks the tool room for parts and, on the third stop in a week, emails the machine builder with the alarm log. It works in Teams, WhatsApp, email or whatever your floor already uses.
