Introduction
Maintenance cost per unit is one of the most important metrics for understanding the true cost of keeping your equipment running. Whether you measure units produced, hours operated, or miles traveled, this metric helps you make data-driven decisions about maintenance strategies and equipment replacement.
The Basic Formula
Maintenance Cost Per Unit = Total Maintenance Cost / Total Units Produced
Simple enough, but the devil is in the details. Let's break down what should be included in each part of this equation.
What to Include in Total Maintenance Cost
A comprehensive maintenance cost calculation should include:
Direct Costs
- Labor costs: Technician wages, overtime, and benefits for time spent on maintenance activities
- Parts and materials: Replacement parts, consumables, lubricants, and supplies
- Contractor costs: External service providers for specialized repairs
Indirect Costs
- Maintenance management: Supervisors, planners, and coordinators
- CMMS software: The cost of your maintenance management system
- Training: Technician training and certification programs
- Tools and equipment: Maintenance tools, testing equipment, and safety gear
Often Overlooked Costs
- Downtime costs: Lost production during planned and unplanned maintenance
- Quality costs: Defects or rework caused by equipment issues
- Inventory carrying costs: The cost of holding spare parts in stock
Choosing the Right Denominator
The "units" in your calculation depend on your industry and equipment:
- Manufacturing: Units produced, machine hours, or production cycles
- Fleet management: Miles driven or hours operated
- Facilities: Square footage or building occupancy
- Utilities: Units of output (kWh, gallons processed)
Interpreting the Results
Once you've calculated maintenance cost per unit, use it to:
Benchmark Performance
Compare costs across similar equipment, production lines, or facilities. High-cost outliers deserve investigation—they might indicate:
- Aging equipment nearing end of life
- Poor maintenance practices
- Incorrect operating procedures
- Design or quality issues
Track Trends Over Time
A rising maintenance cost per unit might signal:
- Equipment degradation
- Increasing parts costs
- Maintenance backlog growing
- Changing production demands
Make Replacement Decisions
When maintenance cost per unit exceeds a threshold (often compared against equipment replacement cost), it's time to consider capital investment.
Example Calculation
Let's say your production line had these figures last quarter:
- Total maintenance labor: $45,000
- Parts and materials: $28,000
- Contractor services: $12,000
- Units produced: 500,000
Maintenance Cost Per Unit = ($45,000 + $28,000 + $12,000) / 500,000 = $0.17 per unit
Now you can compare this to previous quarters, other production lines, or industry benchmarks.
Using a CMMS for Accurate Tracking
Manually tracking all maintenance costs is tedious and error-prone. A CMMS like FacilityLane automatically:
- Records labor time on each work order
- Tracks parts usage by equipment
- Captures contractor invoices
- Links maintenance activities to specific assets
- Generates cost reports automatically
Conclusion
Maintenance cost per unit provides essential visibility into your maintenance program's efficiency. By calculating and tracking this metric consistently, you can identify problems early, justify investments, and demonstrate the value of proactive maintenance strategies.