Does anyone have any estimates for cost reductions due to layout / flow improvements that result in reduced walking distances (i.e. feet per second)? I have made some layout changes and can calculate the amount of walking distance saved, but don't know how to translate it to time (cost savings).

The question you need answer is,if there is less movement bench to bench , would more product be able to be produced and how much?

This is exactly my question. I cannot just use the increased throughput to calculate since there are a variety of reasons our throughput has gone up (other improvement efforts, increased demand / overtime, etc.).

I am trying to figure out how much of this increased throughput is due to the improved flow by estimating the labor time saved.

Does anyone have any suggestions for an estimate on labor time saved due to less walking distance?

Thanks.

Take your labor rate for the person/s who would typically be doing the material handling and/or labor. Regardless of whether you use the direct rate or the fully burdened rate (includes benefits in addition to the actual pay rate, and this is my preference) is up to you. If 100 minutes a day are spent walking to get materials (convert distances into time spent covering that distance) and this need is eliminated, then the calculation is simply:

100min x labor rate = ???

Keep in mind that there are additional savings and/or improvements besides direct labor content. This is especially true given the fact that labor content is usually less than 10% of the total cost of a product (this wouldn't be true of course if you are in a very manual operation. It is important to include all the benefits of the Lean conversion. Some additional examples could be:

1) Eliminate the use of dedicated material handler/s. This could also eliminate the necessity for a forklift (which could be sold off or the rental could be ended)

2) Reduction in WIP (work-in-progress)

3) Reduction in lead time to the customer (this benefit could be indirect such as improved customer satisfaction, and direct in that it may not be necessary to keep as much inventory as finished goods)

4) Reduction in the amount scrapped

Wayne

OK... my question how did you arrive at reducing your walking requirements?

What was the driving force?
Was this a result of a Kaizen?
Standard Work Balance? 5S? What was the intent that can help us figure out the proper metric:)

Did you do a spaghetti diagram of the process prior to adjustments, measuring distances and identifying repeat movement?

Do you have an after diagram showing the improved layout?

I think the previous post's suggestion calcuation is on point

I would only see it as a cost reduction if the new layout allowed the process to be done with fewer resources. Same output, less people or equipment.
Otherwise it's a gain in efficiency. Same people or equipment, greater output.

at any rate, I'm reaching way back here, haven't done "traditional IE" stuff in years, but I believe I used to use between 3.5 and 4 ft/sec as a walking rate.

so, if your saving, say, 400' of walking per shift then you're utilizing 100 seconds of a different, hopefully more productive, manner.

Remember - you can't save time. You can only spend it more wisely.

Anybody else have any thoughts on walking rate? Anybody agree or disagree with the 3.5 to 4 feet per sec. rate suggested by Discordian?

Thank you for all of your responses.

Wayne:
You make some good points about areas to look at for cost savings due to lean projects. I am working with our finance person on cost savings due to WIP reduction. I don't really think the other areas are applicable at this point.

I was thinking in terms of the min. x labor rate calculation. The thing I'm having trouble with is getting at the 100min. without time studying the entire process (don't have detailed "before" time studies).

2.5bostons:
The walking distance reduction is mostly due to line layout improvements (pulling benches closer together to improve material flow) and a few process improvements that we have implemented (using more accessible equipment, etc.). I do have a spaghetti diagram of the previous layout and I am working on creating a spaghetti diagram of the new process and calculating distances for each.

Discordian:
I am looking at this as an efficiency improvement (more units out, same number of operators), but since we would have had to hire more people to meet our current demand rate if this weren't done, I am also counting it as a cost savings (also our mfg. cost per part has gone down).

there are 5280 feet per mile. My health text said that the average person walks a mile in approximatly 17 minutes (1999). 17 Minutes is 1020 seconds.

5280 / 1020 is about 5 feet per second at a normal walk- not a leisure walk It might be a little less if they meander.

Happy to hear you are doing an after diagram, that really helps to compare apples to apples, or rather meatballs to meatballs in this case...

:rolleyes:

Have you reduced touch time to product?

Are your financials contribution or activity based costing?

Did the changes help meet customer pull better?

What you are refering to is call "apparent efficiency" which is not "true efficiency".

Classic example. A supervisor goes to his manager and says " We are doing super. We just built 125 pieces with 10 people, thats 25 pieces more than we normally do". The manager say's, why is that great? We are supposed to build only 100 pieces. You built 25 pieces too many. If you are able to build 125 pieces with 10 associates, then you should build 100 pieces with 8 people.
(125/10 = 12.5 pcs per person. 12.5 X 8 people =100).

In this first case, over producing what you cant sell is very expensive and wasteful. You just building, handling, ordering and storing material that's not going out the door.

When you say 2580' of walk time in a day has been saved, did you reduce your manpower? If the answer is 'NO" then your savings is "apparent" not "true".

If it eliminated overtime, then the savings is "true".
If you eliminated the need for a fork-truck, then the savings is "true" (lease of the cost of the truck is the savings)

Please don't try to grab money that isn't really there.

You might try to break down the work of each process into elemental times and use a moving line chart to visualize the process steps, from that you can determine the time saved by reducing walk, and or changing the layout. I am assuming that the processes were rebalanced afterwards as well.
Some companies also use MOST for standard walk time measurements.

If you compare your output before your new layout, and measure it against you output after you new lay-out, if the gain is positive, the calculation is apparent. If you gain is negative . . . . go back to the old layout, or find out why the new layout did not gain a higher output. (resistance to change, horse play, etc)