OPE Calculator
The financial benefit calculator helps managers, engineers, and controllers to quantify improvement potentials, determine the feasibility of machine-centric improvement projects, and estimate the return of investment (ROI).
Resource cost performance data
(Avg. Annual Salary - Enter median if more resources)
To calculate burdened resource cost, specify the loading factor to account for salary and also the expenses for sick leave, travel, vacation, insurance, fringe benefits.
Default Avg is 1.25x (Burden is 25%).
Percentage of time doing work after downtime and idling. Example: 100% time paid, of which 5% absent, 10% wasted unproductively, 5% waiting for information or resources, then availability is 80%.
Performance relative to established benchmarks.
Calculate: average / maximum achievable speed under optimal conditions.
Example: a common job take 10 minutes in average, while the best team or top performer can complete it in 8 minutes, speed is 80%.
Percentage of work that is:
Complete and Accurate (C&A),
Done right first time (RFT),
Passing first time through (FTT).
Example: 20% jobs require adjustment or extra handling, quality is 80%.
Leverage describes how well resources are used to generate value.
Calculate: profit / cost.
Example: An employee costs INR - 3 LAC and contributes 6 LAC then leverage is 2x.
Typical Numbers are
- 1x : Nonprofit
- 1.5x : Retail and average manufacturing and service
- 2x : Technology
- 3x : Financial
- 5x : Energy
Example: OPE = 51% means 49% labor hours are not productively used.
Recommend Action:
(A) reduce resources ‘use less’
or
(B) Increase throughput ‘make more’ :
Utilize resource for effective productive work by replacing manual work effort with automation if possible
Summary
| Name | Total |
|---|---|
| People | 50 |
| Salary | 30,000.00 |
| Factor | 1.5 x |
| Availability 80 % x 0.01 | 0.8 |
| Efficiency% | 51.20 |
| Loss% | 48.79 |
| A) Cost Savings | 48.79 |
| B) Profit Increase | 1,646,999.99 |