Measuring of Man-Hour per (equivalent) Unit

Answer QuestionsCategory: HRMeasuring of Man-Hour per (equivalent) Unit
Oana Boteanu Staff asked 1 month ago

This indicator is for measuring the workload necessary to produce one unit of a product. This is calculated by dividing the total number of hours worked by staff on the product line by the number of product pieces produced, in a given time period (e.g. 1 day).

This is a very useful KPI to measure the man effort and cost that is used to produce one unit, and the aim of the company will be to minimise this whilst keeping quality standards and maximising profits. Strategies and systems may be put in place to achieve this.

However, some companies with a high figure in this KPI use this in their marketing campaigns to reinforce the effort put into achieving the quality of their product (e.g. Jack Daniels advertises how long it takes to hand make their whiskey)

Formula:
Total number of hours spent on the production / number of pieces produced
For example, in a bakery, if 2 members of staff working 8 hours a day achieve a production of 200 pieces of bread, the man hour per unit is:
(2x 8) / 200 = 16/ 200 = 0.08 h (4.8 minutes), hence 0.08 man-hour per unit

KPI Unit: time

KPI Time Frame: update quarterly or annually

Example:
A manufacturing company wants to measure the Man-hour per Unit.

The formula is:
Total number of hours spent on the production / number of pieces produced

Let us assume:
There are 10 workers working in the manufactory, working 8 hours a day.
On average, 500 pieces (e.g. door handles)) are produced a day:

Man-Hour per Unit:
(10 x 8) / 500 = 80/ 500 = 0.16 h (9.6 minutes)
Hence, it takes 0.16 man-hours per unit to produce a piece of product ( for such a low figure it is assumed that machinery is in place to produce the product in mass, at a fast rate).


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