How to do the calculations
for capturing a ROI
(Return on Investment).
Calculations for Potential $avings
1. (Annual Volume) x current cycle
time = total sec + plus scrap %
Total sec divided 3600 sec = total
hrs needed to produce annual pcs =
9,838 hrs
Annual volume veh/yr = 460,000 veh/yr
10% scrap rate = 46000
506,000 pcs/yr
Current cycle time 70 sec
35,420,000 sec/yr
divide by 3600 sec/hr
9838.00 hrs/yr
2. Same exercise with new cycle time
+ New scrape % (subtract before and
after data)
Total hrs saved x labor burden =
$80,460 Annual Volume veh/yr.
460,000
Open press time machine burden =
$205,620 5% scrap rate 23,000
1788 hrs 483,000 pcs/yr
New cycle time 60 sec
28,980.00 sec/yr
divide by 3600 sec/hr
8050 hrs/yr
before after hrs saved/yr
9838 - 8050 = 1788
3 operator job @ $15.00 hrs labor
burden = 45.00 x 1,788 hours =
$80,460
Labor burden for 3 operators
1788 hrs x 115.00/hr press burden =
$205,620
3. Annual Volume x current shot wt =
total material usage = 3,400,320
plus scrap %
Annual Volume 460,000 veh/yr current
shot wt 3048 grams or
Scrap rate 46000 divide by / 453.8
grams/lb
506,000 pcs/yr 6.72 lbs
Shot wt 6.72 lb/shot
Total material usage 3,400,320 lbs
yr
4. Annual volume x new shot wt = new
total material usage 3,071,880
plus scrap %
Annual volume 460,000 veh/yr new
shot wt 2888 grams
New scrap rate 23,000 divide by
453.8 grams
483,000 pcs/yr 6.36 lbs
6.36 lbs/shot
total material usage 3,071,880
lbs/yr
5. Subtract (Before total material
usage – After total material) = lbs
of material saved/yrs.
Before Material usage 3,400,320
lbs/yr
After Material usage 3,071,880
lbs/yr
328,440 lbs/yr/savings
6. Lbs material/yr x material cost =
$ savings
328,440 lbs/yr x .80/lb =
$262,752.00 savings /yr
7. Savings x life left in program +
total program savings
1 yr 2yr 3yr 4yr
Hours saved per year 1788 hrs 3576
5364 7152
Labor Saving per year
$80,460 160,920 241,380 321,840
Machine burden per yr
$205,620 411,240 616,860 822,480
Material savings per yr
$262,752 525,504 778,256 1,051,008
Totals
$546,832 1,093,664 1,640,496
2,187,328
For
more detailed
information refer to our
ZIPPS Pocket Pal Trouble
Shooting Guide
ZIPPS LLC
1207 E. Main Street
Luray VA 22835
Phone 1.540.743.1115
Fax 1.540.743.1388
ZIPPS understanding your problems, and helping you solve
them!
