What value should I use for a recovered hour?

At a bottleneck, the contribution margin the machine earns per hour: price less totally variable cost, times parts per hour. Elsewhere, only the crew cost or overtime you will stop paying.

What does single-minute mean for my changeover?

Under 10 minutes, not one minute. The Lean Enterprise Institute defines SMED as the target of cutting changeover times to a single digit, and the verdict says whether you meet it.

How do I time a changeover?

From the last piece of the old run to the first good piece of the new one, adjustments and trial pieces included. Average several changeovers before and after the SMED work.

Should I run more changeovers once they are shorter?

Often, because smaller lots cut inventory and lead time. Each extra changeover spends recovered hours, though, so the hours here are an upper bound and the payback a best case.

Lean Manufacturing & Operations calculator

Setup Reduction Payback Calculator

Build the business case for a setup reduction kaizen from timed changeovers instead of a guessed savings figure. You need the project cost, changeover times before and after, changeovers per year and what a recovered hour is worth.

What this calculator does

Months for a SMED project to pay back from the changeover hours it recovers, and whether the new changeover is single-minute.

Formula used

Hours recovered = (current changeover − changeover after SMED) × changeovers per year ÷ 60
Annual savings = hours recovered × value per recovered hour
Net annual benefit = annual savings − annual ongoing cost
Payback (months) = SMED project investment ÷ net annual benefit × 12
Changeover time reduction = minutes saved ÷ current changeover × 100

Inputs explained

SMED Project Investment: Quick-change tooling, carts and clamps plus engineering and training hours.
Current Changeover Time: Timed average today, last piece to first good piece.
Changeover Time After SMED: Timed trial after moving internal steps to external.
Changeovers per Year: Changeovers per week from the schedule × weeks run per year.
Value per Recovered Hour: Contribution per hour at a bottleneck; otherwise crew cost you stop paying.
Annual Ongoing Cost: Upkeep of quick-change parts, carts and added checks each year.

How to use the result

Best suited to funding quick-change tooling for a press, choosing which machine gets the next SMED event.
If you spend the shorter changeover on smaller lots, the extra changeovers use up recovered hours. Counts time only: scrap made while adjusting after the changeover is not valued.

Current U.S. benchmarks

U.S. manufacturing runs at 75.7% of capacity (Federal Reserve, Aug 2026). New factory orders are up 8.5% year over year (Census).

Common questions

What value should I use for a recovered hour? At a bottleneck, the contribution margin the machine earns per hour: price less totally variable cost, times parts per hour. Elsewhere, only the crew cost or overtime you will stop paying.
What does single-minute mean for my changeover? Under 10 minutes, not one minute. The Lean Enterprise Institute defines SMED as the target of cutting changeover times to a single digit, and the verdict says whether you meet it.
How do I time a changeover? From the last piece of the old run to the first good piece of the new one, adjustments and trial pieces included. Average several changeovers before and after the SMED work.
Should I run more changeovers once they are shorter? Often, because smaller lots cut inventory and lead time. Each extra changeover spends recovered hours, though, so the hours here are an upper bound and the payback a best case.

Last reviewed 2026-10-01.