BIZOMAT Tools · Manufacturing
Setup Reduction Value
Is reducing setup time worth the investment?
Values the time released by shorter changeovers and the payback on the improvement.
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How this tool works
Inputs, units and where to find them
| Input | Unit | Typical source |
|---|---|---|
| Current setup time | min | Measured current changeover time |
| Target setup time | min | Trialled or proven target changeover time |
| Changeovers / year | changes | Changeovers per year from production records |
| Combined hourly cost | $/hr | Hourly cost of the stopped machine and crew |
| Improvement investment | $ | Cost of tooling, fixtures and training for the faster set-up |
What each input means
Open an input to see what it is, its units, the worked example and the common mistakes, with a small diagram.
What this means: Current setup time
- What it is
- How long a changeover takes today, from the last good part of one job to the first good part of the next, measured on the floor.
- Units and format
- Enter a number in min: minutes. The form accepts 0 min or more.
- Example
- The form opens with 60 min as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Minutes saved are current minus target, so a longer current time raises the value.
- Get it right
- Time several changeovers and use the average, including trial runs and adjustments.
What this means: Target setup time
- What it is
- The changeover time expected after the improvement, preferably proven in a trial rather than estimated.
- Units and format
- Enter a number in min: minutes. The form accepts 0 min or more.
- Example
- The form opens with 30 min as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- A shorter target raises the minutes saved and the annual value.
- Get it right
- Use a trialled time where possible; an optimistic target overstates the value.
What this means: Changeovers / year
- What it is
- The number of changeovers made on this machine or line in a year, from production records.
- Units and format
- Enter a number in changes: changes. The form accepts 0 changes or more.
- Example
- The form opens with 250 changes as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Hours released and annual value rise in proportion.
- Get it right
- If faster set-ups will lead to more, smaller batches, the released hours are reused rather than banked.
What this means: Combined hourly cost
- What it is
- The cost of one hour with the machine stopped for changeover, combining the machine rate and the crew who wait or do the set-up.
- Units and format
- Enter a number in $/hr: money per hour. The form accepts $0/hr or more.
- Example
- The form opens with $120/hr as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Annual value rises in proportion.
- Get it right
- Include everyone tied up in the changeover, not just the setter.
What this means: Improvement investment
- What it is
- The one-off cost of making set-ups faster: quick-change tooling, fixtures, presetting equipment and training.
- Units and format
- Enter a number in $: an amount of money; use one currency for every money input. The form accepts $0 or more.
- Example
- The form opens with $8000 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Payback is this divided by annual value.
- Get it right
- Include internal time spent on the improvement project, not only purchases.
Method and formulas
- Hours released = (current − target) × changeovers ÷ 60
- Annual value = hours released × hourly cost
- Payback = investment ÷ annual value
Limitations
- Value is real only if the time is used
Typical uses
- SMED projects
- Justifying quick-change tooling
Who it is for
- Production engineers
- Lean practitioners
What you get
- Hours released and annual value
- Payback
Interpreting the result
- Faster set-ups also allow smaller batches and less inventory
References
- Shingo S., A Revolution in Manufacturing: The SMED System (Productivity Press, 1985)
Learn the Concepts Behind This Tool
These BIZOMAT Library readings explain the method this tool uses, with worked examples.
Method explained here · BIZOMAT original book
Choosing jobs and projects within a budget
In Shop Floor Optimisation by the Numbers
What it covers: Choose the projects or jobs that give the most benefit within a budget or capacity: the knapsack problem, ratio and largest-first rules, the fractional bound and exact table methods.
BIZOMAT tools are screening and decision-support utilities. Verify important financial, engineering, safety, legal or operational decisions using appropriate professional standards and your organisation’s approved data.