Loss Accounting

Reliability Operating Centre

Put a dollar on every hour you lose. A structured model of where your production capacity goes, with every loss bucket costed and attributed to a cause you can do something about.

Why reliability loses the budget argument

Not because the case is weak. Because it is made in the wrong currency.

Maintenance reports in hours. The business decides in dollars.

Availability percentages and downtime hours do not compete well against a capital proposal with an NPV attached. Without the translation, reliability spend argues with a story and loses to a number.

The priority list is ranked wrong

An asset that fails twelve times a year for twenty minutes gets attention. The one that fails twice for two days does not. Ranked by dollars rather than events, that order often reverses entirely.

Nobody knows what the improvement returned

The work was done, the spend was approved, and twelve months later there is no agreed answer to whether it paid back. So the next request starts from scratch.

You cannot prioritise what you have not costed. Most operations are working hard on the wrong list.

What we do

Build the capacity modelCalendar time down through available time, loading, availability, rate and quality, so every hour of theoretical capacity is accounted for somewhere. Losses that are not in the model are losses nobody will ever fund fixing.

Agree the loss taxonomy and attribution rulesWhat counts as a maintenance loss, an operational loss, a process loss or an external one, and who decides when an event is ambiguous. Agreed once, in writing, before anyone has an incentive to argue about a specific event.

Cost the hourWhat an hour of lost production is worth at each constraint, at the current price and cost position, reviewed as those change. This single number does more work than any other in the model.

Produce the top ten and the value at stakeWhere the money is actually going, ranked, with the addressable share separated from the part you have to live with. This becomes the input to defect elimination and to strategy work.

Track the payback on what we recommendMOST OFTEN SKIPPEDEvery improvement we propose carries a number. Every improvement delivered gets tracked against that number in the same model. You will know what the programme returned, and so will your finance team, without either of us reconstructing it a year later.

This is the service that makes the rest of the Reliability Operating Centre answerable. If we cannot show the return in your own loss model, in your own numbers, you should not keep paying for it.

What you get

Deliverable	What it contains	Cadence
Capacity and loss model	The full waterfall from calendar time to saleable output, every loss bucket defined	Built in Foundation
Loss taxonomy and rules	Categories, attribution rules, arbitration process for ambiguous events	Agreed once, reviewed annually
Monthly loss report	Where capacity went, in dollars, by cause, against trend	Monthly
Value at stake register	Addressable loss, ranked, with estimated cost to address each item	Quarterly
Benefit tracking	Committed versus realised benefit on every delivered improvement	Monthly, cumulative
Business case support	The loss and payback figures behind your capital or resourcing submissions	On request

Frequently asked questions

What is loss accounting?

A structured account of where production capacity goes — from calendar time down through availability, rate and quality losses — with every loss bucket costed in dollars and attributed to a cause. It turns downtime hours into the currency the business actually decides in.

What is a capacity and loss model?

A waterfall from theoretical calendar-time capacity to saleable output. Every lost hour lands in a defined bucket with agreed attribution rules, so losses that would otherwise be invisible become fundable improvement cases.

Why rank losses in dollars rather than downtime events?

Because the order reverses. An asset failing twelve times a year for twenty minutes gets attention; the one failing twice for two days often costs more. Ranked by dollars, most operations discover they have been working hard on the wrong list.

How do you value an hour of lost production?

At the constraint, at current price and cost position, reviewed as those change. One agreed number per constraint does more work than anything else in the model — it is what lets maintenance argue in the same currency as a capital proposal.

Find out what your losses are worth

The cost-loss model is built during Foundation, and you keep it whether or not you continue with us.

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