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 Labor Savings Calculator

Other Calculators:   Increased Efficiency Calculator   Bags Per Minute Conversion

Purchasing packaging machinery is typically justified in two ways:

  1. One is by Increasing the Efficiency of the line (ie: having more packages produced per hour).

  2. The other is in Labor Savings (ie: producing the same or more packages, but with less people).
Most of the time a combination of these two are used to figure payback periods on purchasing a new machine. This calculator figures the potential savings in labor cost you can achieve by using an automated system.

Your Existing Process
1)How many full-time employees do you currently use to package your products? Current No. of People
 Note: Input the number of people that your CURRENT line or process takes to package your products.
2)What is the annual labor cost per employee?$Annual Cost/Employee
 Note: Input the annual rate that one employee on the line costs the company. Add salary or hourly rate, benefits, and all other costs. The Average is $30,000.

The New Process...
(after new equipment is installed)
1)How many people will the NEW line take? New No. of People
 Note: Input the expected amount of people that the new line will take to run, with the new equipment.
 ***If you need help in order to calculate this,
please click here to go to our "Rule of Thumb notes.
2)What will be the annual labor cost per employee?$New Annual cost/Employee
 Note: Same as above unless other rates apply on the new machinery. (ie: addition of mechanics, supervisors, etc.)

The Results....Your Savings!

1)This is the number of people you save in labor  Person(s)
Note: This is the amount of annual labor costs or person(s) that will be eliminated as a result of adding the new equipment.
2)This is an estimate of your annual savings$ Annual Savings
Note: The amount of money potentially saved by adding the new equipment

Now Compare These Results Versus the Cost of a Faster Machine! - See Payback Calculation Below

Payback Period for the new equipment, based on Labor Savings

1)Enter the cost of the new equipment$ One time cost
Note: If you forgot, please go back to the product page to get the price.
 Payback Period  Year(s)
*****This means that it will take (from above payback calculation) years to pay for the new machine based on labor savings (but don't forget to add the increase in efficiency also). Most companies look for a 1-3 year payback period on machinery purchases such as this.
 Note: This calculation is figured by dividing your labor cost savings into the cost of the new machine.

Usually with new equipment you will see an increase in output. Click here to go to our Increased Efficiency Calculator, if you have not done so already.

Ziggypak can also recommend machines for your product in seconds. Please - Ask Our ADVISOR -!.

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