Work out kaizen saving estimate instantly with clear inputs, formula shown and shareable results.
A kaizen saving is time saved per unit x annual volume, converted to hours and valued at the fully loaded labour rate. Payback in months follows from implementation cost against annual saving. Small per-unit savings become large at volume: twelve seconds on 400,000 units is over 1300 hours a year.
Kaizen saving
Hours released = time saved (s) x volume / 3600; saving = hours x labour rate
Payback
Payback months = implementation cost x 12 / annual saving
Only if the released hours are used for something valuable — more output on a constrained line, or redeployment. Otherwise the saving is capacity, not cash, and should be reported as such.
Use the fully loaded rate including benefits, supervision and facility overhead where headcount genuinely changes. For capacity release on a constrained line, use contribution per unit instead.