Improvement

Cycle Time Reduction ROI

Annualize a cycle-time project's per-unit seconds saved into recovered capacity and dollar value, so a small number isn't mistaken for a small annual one.

Current cycle timeseconds/unitTarget cycle timeseconds/unit

Annualizing

Volumeunits/year run through this stepHour value$/hour of recovered capacity

Payback test

Implementation cost$, one-time project costEvaluation periodyears, the payback window the project must clear

Go$100,000/yr

Capacity gain1,666.7 hr/yr

Payback1.5 yr

Continue Analysis

Based on your results, these related decisions are available.

OEE Loss Prioritizer prioritize which loss category to attack for that capacity gain

How this works

Seconds saved per unit, multiplied by annual unit volume, gives total seconds recovered per year, converted to hours and valued at the line's hourly rate, then gated on payback against project cost.

Key terms

Cycle time: the time to produce one unit at a process step.
Capacity gain: hours of production capacity recovered per year from the faster cycle time.

Assumptions

Cycle-time reduction is fully usable as added throughput capacity

Limitations

Single process step, not a full line-balancing or bottleneck-shift study

Sources

Standard lean/cycle-time-reduction ROI framing.

Worked example

6 seconds saved per unit reads as trivial on its own, easy to wave off as not worth a $150,000 project. At 1,000,000 units/year it is 1,666.7 hours and $100,000/year, comfortably paying back the project in 1.5 years.

Common use cases

Justifying a cycle-time-reduction project with real annualized value
Comparing cycle-time reduction against other capacity-recovery projects
Following up an OEE loss-prioritization with the next capacity-recovery lever