Three steps. The hours and the cost per hour come from you. The percentages are fixed assumptions, based on the sources below.
1. What unplanned downtime costs you
hours of unplanned downtime × cost per hour
You set both values. For scale: ABB found a typical cost close to $125,000 per hour in a 2023 survey of 3,215 plants. Siemens reports $36,000 per hour in consumer goods and $2.3 million in automotive, in large plants. At the start values of 150 hours and €50,000, this is €7.5 million a year.
2. What earlier warnings avoid
cost of downtime × 5 to 15% less
Deloitte reports 5% to 15% less facility downtime, based on its client work. At the Italian rail operator Trenitalia, downtime fell by an estimated 5% to 8%. We use 5% (cautious) to 15% (optimistic) as the range.
3. Annual savings
cost of downtime × the percentage from step 2
The expected value is the midpoint of the cautious and the optimistic case.
Annual savings = step 3.
Simplifications: we apply the percentages to all unplanned downtime, although not every failure gives a warning, and every hour costs the same.