Kaizen Savings and ROI Calculator

Calculator

Enter the Kaizen before-and-after metrics

Core logic: Annualized savings = recurring savings x yearly run rate

Project name

Project duration (weeks)

Implementation cost

Annual revenue basis

Before time metric (seconds)

After time metric (seconds)

Labor / machine value per hour

Run hours per year

Before defect rate (%)

After defect rate (%)

Annual unit volume

Cost per defect

Before inventory level/value

After inventory level/value

Inventory carrying-cost rate (%)

Additional annualized savings

Results

Kaizen business case

Annualized Savings: $186,137
Payback Period: 1.2 months
ROI: 934.1%
Time Savings: $91,000
Defect Savings: $59,500
Inventory Savings: $13,500
Sigma Shift: +0.39 sigma
Project Duration: 4 weeks
Savings % of Revenue: 5.82%

Interpretation

The largest recurring benefit comes from reduced cycle time and defect costs, with a strong payback profile.

Top savings driver: time reduction

Sigma equivalent: defect-rate improvement moved the process closer to the next sigma band.

Save this project to compare it against other Kaizens in the portfolio dashboard below.

Breakdown

Savings profile

Source	Annual Savings	Share
Time	$91,000	48.9%

Portfolio

Portfolio dashboard

Projects Saved: 0
Total Annual Savings: $0
Average ROI: 0%
Average Payback: N/A

Project	Annual Savings	ROI	Payback	Sigma Shift
No saved Kaizens yet. Click Save To Portfolio after calculating.

Instructions

How to use this app

Enter the project name, duration, implementation cost, and annual revenue basis.
Fill in before-and-after time, defect, and inventory metrics along with the cost assumptions tied to each improvement stream.
Click `Calculate impact` to return annualized savings, payback period, ROI, and sigma-shift equivalent.
Use `Save To Portfolio` to add the current Kaizen to the local portfolio dashboard in this browser.
Compare multiple saved Kaizens to see total savings, average ROI, and which projects are creating the biggest contribution.

The sigma-shift equivalent here is based on the improvement in defect rate converted to a long-term sigma estimate. It is a directional quality indicator, not a substitute for a full capability study.

Inventory savings are modeled as carrying-cost savings, not as immediate one-time cash recovery. If you want both views, add one-time cash impact separately in your business case.