How to calculate manpower savings

In this article I will explain how to calculate the manpower cost you have saved by implementing some improvements in an operation.

Suppose the present output of an operation is 120 per hour. One manpower is allocated for doing the operation. And you have done some improvement in the operation and increased the hourly output to 145. So increase in the output per hour is 25 nos.

Man minutes required per product before improvement = 60/120
= 0.5

Man minutes required per product after improvement is = 60/145
= 0.4137

Man minutes saved per product = 0.5 – 0.4137 = 0.0863

Suppose the demand of the product per month is 200000.

Man minutes saved per month is 0.0863 x 200000 = 17260

Suppose, hourly cost of the manpower is Rs 100.

Cost for one man minute = 100/60 = Rs. 1.66

So total savings per month = 1.66 x 17260

Which is Rs. 28651/-

Oh my god this may be close to your salary.

Please note that we will actually get this saved money only if we use the saved man minutes for other value adding activities.

We are done with the calculation.

If you want to know more about man minutes please click the link below

Man-hour

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If you want to know how to calculate manpower required, please click the link below

For using free online manpower calculator tool please click the link below

Thank you for reading.

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