What an hour of downtime really costs you, and how to work it out

It's the Monday morning meeting. The palletiser was down for four hours on Saturday night. Someone asks what it cost. The production manager says "a lot". The finance director asks for a number. Nobody has one.

So the room moves on. The job to fix the root cause goes on the list behind everything else. And the next time it stops at 2am, the shift manager still has no way to judge whether a callout is worth it.

Most sites don't know what an hour of downtime costs them. The ones that guess tend to guess low, because they only count the lost output.

Start with what you'd have made

The first part is the obvious one. How much product didn't get made?

Take the line's normal rate per hour. Multiply it by the margin on each unit, not the selling price. You still save the raw materials on product you didn't make, so price overstates it.

There's one exception. If the lost output is gone for good, use the full contribution you lost. That happens when you can't catch up because the line already runs flat out, or a customer takes the order elsewhere. Be honest about which case you're in. Most sites can catch up some of it, at a cost.

Then count the people stood still

When the line stops, the operators don't. They're still paid. They might sweep up or help on another line, but most of that hour is lost.

Count the crew on that line for one hour at their real cost. That's more than their hourly rate. Add the employer's National Insurance and pension. Then allow for holiday. Most workers on a five-day week get at least 28 days' paid leave a year* (GOV.UK). You pay for those weeks, so the true cost of each hour worked is higher than the rate on the payslip. Your payroll team can give you a loaded rate in ten minutes.

Do the same for anyone else who stops because the line stops. Forklift drivers waiting for pallets. The team at the end of line. Quality staff with nothing to check.

The bit that comes after the restart

This is where most sums stop, and it's where the real money often is.

First, overtime. If you catch up the lost output, you usually do it on overtime. That's the crew's hours again, at a premium, plus the power and the wear on the kit.

Then scrap. Most lines don't come back perfect. The first run after a stop can mean wrong seals, bad wraps, labels off square or product out of spec. Count it.

Then late deliveries. Read your customer contracts. Some have penalties for late or short loads. Some have service levels that put you on a list. For logistics sites, a missed trailer slot can push the whole day back. Our post on late trailers and missed slots goes into that.

Last, knock-on stops. One stopped machine can starve the next line or block the one before. If the palletiser stopping means the fillers stop, count both lines.

Put it together

Here's a worked example. These are made-up numbers to show the sum. Use your own.

Say the line makes 2,000 cases an hour at 60p margin a case. That's £1,200 an hour of lost margin. There are eight people on the line at a loaded cost of £20 an hour each. That's another £160. Catching up costs overtime at a higher rate, say £240 for that same hour. Restart scrap and a short load to one customer add another £400.

So one hour costs about £2,000. A four-hour stop costs about £8,000. On a line feeding two others, double it.

Do the sum on a quiet afternoon, not after a breakdown. Do it for your three or four worst machines. Our post on criticality ranking helps you pick which ones.

What the number is for

The number earns its keep at 2am.

It's 2am and the fitter has been on a drive fault for an hour. The shift manager is wondering whether to call someone in. If they know an hour costs £2,000, a callout charge looks very different. Every hour spent hoping costs more than the engineer.

Here's what we think. The biggest cost in most breakdowns is the wait, not the repair. Waiting while the wrong person keeps trying. Waiting for someone to answer the phone. Waiting for the second engineer after the first one turned out to be the wrong trade. That's why we'd set a clear point to stop trying and call for help, and back it with the number.

The same sum works for staffing. If your site loses six hours a month because there's no controls engineer on nights, that's a cost you can put next to a salary. Our post on the real cost of a vacant engineer post runs that sum.

Take it to the board

A number changes the conversation about planned work.

The finance director won't fund a new gearbox because "it keeps failing". They might fund it when you show it's stopped the line for, say, nine hours this year at £2,000 an hour. Put the repair cost next to the downtime cost and let them do the maths. We've covered how to build that case in turning breakdown data into a case for investment.

Keep the number honest. Don't pad it. The first time someone in finance picks it apart and finds it inflated, you lose the argument for good.

What to do on Monday

1. Pick your three worst machines and work out the cost per hour for each, with the production manager and someone from finance in the room.
2. Get a loaded hourly rate from payroll, so the labour line is right.
3. Put the number on the wall in the shift manager's office, next to the callout list.
4. Use it in your next budget meeting to price one repeat failure.

* Statutory holiday entitlement correct as of 30 August 2026. Check GOV.UK holiday entitlement for the latest.