Guide · Updated 26 October 2026

How to calculate the cost of downtime on a production line

"The line was down for 40 minutes" doesn't get anyone moving. "That stop cost us about NZD 2,000" does. This guide shows New Zealand and Australian food and manufacturing plants how to turn minutes of downtime into dollars, so you can rank problems by what they really cost and fund the right fixes.

What counts as downtime

Downtime is any time the line was scheduled to run but didn't make good product. Count both kinds:

• Unplanned stops: breakdowns, jams, waiting for materials, waiting for QA release, no operator.
• Planned stops that run long: changeovers, cleans and start-ups that take longer than the standard.

Short stops of a minute or two matter too. They rarely get written down, but added up over a shift they can beat the big breakdowns.

The four parts of the cost

1. Lost contribution. If you can sell everything you make, every lost minute is lost margin: units per minute × contribution per unit (selling price less variable costs such as materials and packaging). If you can't sell the extra output, this part is close to zero, and the cost shows up as the items below instead.
2. Labour that's paid but idle. Crew size × loaded hourly rate × hours stopped.
3. Waste and rework. Product scrapped at stop and restart, plus start-up rejects while the line settles.
4. Recovery cost. Overtime or extra shifts to catch up, expedited freight, or penalties for short or late orders.

Add the parts that apply to your situation, but don't double count: if you recover the volume on overtime, use the overtime cost, not lost contribution as well.

A worked example

Example data (not from a real plant): a snack-bar packing line running 120 packs a minute, NZD 0.40 contribution per pack, a crew of 6 at NZD 45 an hour loaded, and 25 kg of product scrapped per restart at NZD 6 per kg. The line loses 60 minutes a day to unplanned stops across 4 restarts, and the plant can sell everything it makes.

• Lost contribution: 60 min × 120 packs × NZD 0.40 = NZD 2,880 a day
• Idle labour: 6 people × NZD 45 × 1 hour = NZD 270 a day
• Restart waste: 4 restarts × 25 kg × NZD 6 = NZD 600 a day
• Total: about NZD 3,750 a day, or around NZD 937,500 over 250 production days

That works out to roughly NZD 62 a minute. Once a team knows its own per-minute figure, every stop on the board has a price.

Getting the minutes right

• Use the line's own stop log or PLC data if you have it, and check it against the shift report.
• If you don't, run a simple tally sheet for two weeks: start time, end time and reason for every stop.
• Group reasons into a short, fixed list so the Pareto chart means something.
• Separate the first few minutes after a restart, when speed and quality are low, so that loss isn't hidden.

From cost to action

1. Rank stops by dollars, not by count. Ten short jams can cost more than one long breakdown.
2. Pick the top one or two and find the root cause with the people who run the line.
3. Fix, then standardise. Write the fix into standard work, maintenance checks or the changeover standard.
4. Track it weekly in minutes and dollars, so the gain holds and you can show the payback.

Where downtime fits with OEE

Downtime is the availability part of OEE. Use the free OEE calculator to see how availability, performance and quality compare on your line. For a dollar figure on all three together, plus your top three fixes, the Line Loss Finder (NZD 49) gives you a one-page report in a few minutes. If long changeovers are your biggest stop, the Changeover Planner (NZD 49) builds a step-by-step plan to shorten them.

This guide is general information. The example uses made-up numbers to show the method.