How are payback and ROI calculated for a kaizen project?

Net annual benefit is labor plus scrap and material plus other savings, minus any added running cost. A project costing 85,000 that saves 42,000 in labor, 12,000 in scrap and 21,500 in energy and throughput, and adds 6,500 of maintenance, nets 69,000 a year: an 81.2 percent annual ROI and a payback of 85,000 / 69,000 x 12 = 14.8 months.

How is the savings plan compared during the year?

The year's plan is pro-rated to the status date. With a 720,000 plan for a calendar year and a 9 October status date, 282 of 365 days have passed, so the plan to date is about 556,300. The headline tile compares the net annual savings of projects completed so far with that figure and shows On target, Near target or Below target.

Why count savings as annual run rates?

Because that is what a project changes: a fix that saves 2,000 a month is worth 24,000 a year from the day it holds. The register adds up run rates of completed projects; it does not claim that cash has been saved yet. A project completed in October saves only about a quarter of its run rate in that calendar year, as the Method sheet notes.

What does the Verified column do?

It separates confirmed savings from estimates. Set it to Yes once finance or the controller agrees the saving, usually a month or two after completion. The Dashboard shows the share of this year's savings that is verified and splits the savings by type into verified and not yet verified.

How is a project marked overdue?

Against the status date on Setup, not today's date. An open project with a target date of 30 September is Overdue at a 9 October status date; one due on 20 October is Due soon with a 14-day window. A completed project is Complete and counts as on time if it finished by its target date.

Can I track a project that costs more than it saves?

Yes. Safety or compliance projects often do. A project with 1,000 a year of energy savings and 1,500 of added running cost has a net benefit of minus 500; its payback stays blank because it never pays back, and it still counts in the open and completed project numbers.

Operations and Labor

Kaizen Project Tracker Excel Template

Keep every kaizen project in one register and see the savings delivered against your plan, ROI, payback and the open and overdue projects by area, type and PDCA stage.

Overview

This kaizen project tracker is a working Excel workbook for continuous-improvement managers, plant managers and project leads who need one honest list of improvement projects and what they deliver. It ships with 30 example projects for a fictional pump manufacturer, from quick just-do-its to SMED and energy projects, so the dashboard and charts are populated the moment you open it; replace the example rows with your own and everything recalculates.

Each row holds a project's dates, PDCA stage, one-off investment and annual savings split into labor, scrap and material, and other savings, less any running cost the change adds. The workbook gives the net annual benefit, payback in months and annual ROI with the same formulas as the Manufacturing ROI Calculator on this site, and a status in words against a status date you type, so the file never changes by itself. A Verified column separates savings finance has confirmed from the team's estimate.

The Dashboard compares the net annual savings of projects completed this year with your savings plan pro-rated to the status date, shows the cumulative savings by month against the plan line, the projects by area and status, the savings by type, and the open projects by PDCA stage. Savings are annual run rates, not cash saved to date, and the Method sheet says so; the plan and every rate are yours to set.

What this template includes

Projects register: one row per kaizen with area, type, lead, start, target and completed dates, PDCA stage, investment and annual labor, scrap and material, and other savings less any added running cost
Per-project net annual benefit, payback in months, annual ROI, a status in words (Complete, Overdue, Due soon, In progress) against a status date you type, on-time completion and days open
A Verified column so savings confirmed by finance are reported separately from team estimates
Setup with your currency, the year's savings plan pro-rated to the status date, the due-soon window, an on-time target and the area and project-type lists
Check column that names problems in words: target before start, completed before start, dates after the status date, open projects with no PDCA stage, verified before completion, duplicate IDs
Dashboard with KPI tiles for net annual savings completed this year against plan to date, projects completed, open and overdue, savings verified, on-time completion, portfolio payback and days to complete
Four native charts: savings by month and cumulative against the plan line, projects by area and status, savings by type verified or not, and open projects by PDCA stage
By-area, by-type, by-stage and monthly tables, a Method sheet with every formula and a Verify sheet that re-checks them (Self-check: PASS)

Suggested use case

Use it to run a continuous-improvement programme: register every project, keep stage and dates current, report savings delivered against the year's plan at the monthly review, and chase the overdue projects and the savings not yet verified.

How to use it

On Setup, type your plant name, currency, savings year start, the year's savings plan and the status date, then replace the example areas and project types.
On Projects, add one row per kaizen with its area, type, lead, start and target dates, investment and the annual savings it should deliver.
Keep the PDCA stage of open projects current; when a project is done, type its completed date.
When finance has confirmed a project's savings, set Verified to Yes.
Read the Check column and fix anything it names.
Before each review, set the status date on Setup and open the Dashboard.

Frequently Asked Questions

How are payback and ROI calculated for a kaizen project?: Net annual benefit is labor plus scrap and material plus other savings, minus any added running cost. A project costing 85,000 that saves 42,000 in labor, 12,000 in scrap and 21,500 in energy and throughput, and adds 6,500 of maintenance, nets 69,000 a year: an 81.2 percent annual ROI and a payback of 85,000 / 69,000 x 12 = 14.8 months.
How is the savings plan compared during the year?: The year's plan is pro-rated to the status date. With a 720,000 plan for a calendar year and a 9 October status date, 282 of 365 days have passed, so the plan to date is about 556,300. The headline tile compares the net annual savings of projects completed so far with that figure and shows On target, Near target or Below target.
Why count savings as annual run rates?: Because that is what a project changes: a fix that saves 2,000 a month is worth 24,000 a year from the day it holds. The register adds up run rates of completed projects; it does not claim that cash has been saved yet. A project completed in October saves only about a quarter of its run rate in that calendar year, as the Method sheet notes.
What does the Verified column do?: It separates confirmed savings from estimates. Set it to Yes once finance or the controller agrees the saving, usually a month or two after completion. The Dashboard shows the share of this year's savings that is verified and splits the savings by type into verified and not yet verified.
How is a project marked overdue?: Against the status date on Setup, not today's date. An open project with a target date of 30 September is Overdue at a 9 October status date; one due on 20 October is Due soon with a 14-day window. A completed project is Complete and counts as on time if it finished by its target date.
Can I track a project that costs more than it saves?: Yes. Safety or compliance projects often do. A project with 1,000 a year of energy savings and 1,500 of added running cost has a net benefit of minus 500; its payback stays blank because it never pays back, and it still counts in the open and completed project numbers.