Maintenance costs: Get full control of your expenses

Maintenance costs are the expenses required to preserve or restore the function of technical equipment. The concept covers all resources consumed to keep the facility in operational and safe condition — material, spare parts and labor time.

Direct and indirect production expenses

Equipment expenses are normally divided into two main categories to give a clear picture of the finances. Direct maintenance costs consist of purchased spare parts, materials and tools, wages for in-house technicians and invoices from external contractors. These are easy to track and budget for in daily operations. Indirect costs for a machine or equipment in the business are harder to measure but include administrative tasks, maintenance systems and training.

Guidelines for reasonable maintenance cost

In some industries maintenance cost as a share of replacement value is used as a benchmark, but levels vary greatly depending on facility type, equipment age and availability requirements — typically around 2–5 % of what it would cost to buy new equipment. The level varies with the type of production. Equipment age affects the overall calculation since older machines need more frequent service and more spare parts, which drives total cost up over time. If your maintenance cost exceeds 5 % you should consider investing in new equipment.

Work methods that reduce expenses

How you plan and carry out service has a direct impact on your company's margins. Establishing a deliberate maintenance strategy helps reduce ongoing expenses and build a predictable budget.

Condition-based and preventive maintenance

Preventive and condition-based maintenance often lower maintenance costs over time, unlike reactive approaches. Machines last longer and your staff avoid stressful emergency call-outs. Scheduled component replacements are cheaper than handling cascade failures that occur when a broken part damages surrounding mechanics. Establishing structured preventive maintenance therefore lays the foundation for more stable finances.

LCC – Life Cycle Cost for technical equipment

Calculating Life Cycle Costing (LCC) means mapping the equipment’s total expenses over its entire lifetime, from purchase to decommissioning. The calculation is made by summing the investment cost with future operating and maintenance costs, then subtracting any residual value at disposal. This approach helps management make informed investment decisions and clarifies how ongoing maintenance relates to the facility’s finances.

Key figures for financial follow-up

To evaluate whether a specific maintenance expense yields returns in the form of increased reliability, measurable values are required:

• MTBF (Mean Time Between Failures): A high value means longer time between breakdowns, fewer stoppages and lower overhead costs..

• MTTR (Mean Time To Repair): Average time it takes to repair the fault.
• OEE (Overall Equipment Effectiveness): OEE is a measure of total equipment utilization that highlights time losses.

Collect all data in a digital system

A digital tool, such as a modern CMMS, helps you monitor and analyze your maintenance costs in real time. Technicians report time spent and which spare parts are used directly in the platform as work is performed. This way management can quickly generate reports showing which machines are most expensive to operate and get a consolidated view of the entire maintenance economy..

Checklist for cost‑efficient operations

• Map historical expenses for your most critical machines.

• Create clear routines for fault reporting and material withdrawals.
• Implement preventive rounds on equipment with high unplanned costs.
• Train machine operators in basic equipment care.
• Follow up results monthly using key figures.

How is the maintenance cost of a production stoppage calculated?

The calculation is based on the machine’s hourly cost, lost production and wages for staff who cannot perform their work. Sometimes administrative costs for rescheduling and potential delay penalties are also added.

Calculation example where a machine is stopped for two hours:

• Machine fixed hourly cost: 1 000 kr/h (Total 2 000 kr)

• Lost production (contribution margin): 5 000 kr/h (Total 10 000 kr)
• Wage for an idle operator: 1 200 kr/h (Total 2 400 kr)
• Delay penalty to customer: 5 000 kr (one‑time fee)

The total for this stoppage becomes 19 400 kr, on top of the repair labor cost and spare parts required to fix the fault.

What is the most common hidden expense?

Insufficient lubrication and missed calibration can cause both increased wear and higher energy consumption, which can drive costs further. These rarely appear directly in the budget but create extra expenses in the form of electricity use and shortened equipment lifetime.