Setup Time
Setup time is the time required to change over a workstation or machine from one job to the next before productive processing begins. It occurs once per lot – regardless of the quantity produced – and covers activities such as tool changes, mounting, adjusting and the first inspection of the machine.
Setup time is the period a workstation or machine needs to be changed over from producing one job to the next – measured from the end of the last good part of the old lot to the first good part of the new lot. During this time nothing is produced: tools are changed, fixtures are mounted, parameters are set, material is provided and a first part is inspected. Its defining feature is that setup time occurs once per lot and operation and is independent of the quantity produced – a key difference from quantity-dependent processing time.
As a standard time, setup time is a fixed component of every operation in the routing. It feeds into scheduling, capacity planning and costing, and it largely determines how lot sizes play out economically: the more often changeovers happen, the greater the share of unproductive setup time in total occupancy. Because it ties up productive capacity without creating value itself, setup time is one of the most important levers of production control and a preferred starting point for improvement methods such as SMED.
At a glance
- Time to change over from job A to job B – without adding value
- Occurs once per lot, independent of the quantity
- A standard time in the routing, alongside processing and transition time
- Driver of the economic lot size and capacity utilization
- Reducible through setup optimization (SMED), sequencing and external setup
What setup time is made up of
Setup time covers all activities that make a workstation ready to run a new job. This includes tearing down the previous job (removing tools and fixtures, clearing residual material, cleaning), setting up the new job (tool and mold changes, mounting clamping devices, loading programs), adjusting (calibrating machine parameters, stops, temperatures) as well as the ramp-up with trial parts and the first quality check until a good part is produced. Only then does the actual productive processing begin.
In industrial engineering, setup time is often broken down into a basic setup time and a setup recovery or setup allowance time; the basic setup time is the planned core, while the allowance time covers additional, objectively justified interruptions. Because setup often combines several steps, the standard is determined once per operation and workstation and stored in the master data record – ideally based on measured actual times from shop floor data collection rather than on estimates.
Internal and external setup
For setup optimization, the distinction between internal and external setup is decisive. Internal setup can only be performed while the machine is stopped – for example the actual tool change. External setup, by contrast, can be prepared while the machine is still running, such as providing tools, fixtures and material. The core idea of the SMED method (Single-Minute Exchange of Die) is to shift as many activities as possible from internal to external setup, thereby drastically reducing the machine-effective downtime.
Why setup time matters so much economically
Setup time is capacity tied up without creating value: while setup is under way, the machine produces no salable part but still incurs costs. The economic lever lies in its ratio to lot size. When a fixed setup time is spread across a large lot, the setup cost share per unit falls; with small lots it rises sharply. That is why setup time is the central input to the economic lot size calculation, which balances the trade-off between low setup costs (large lots) and low inventory and capital-tie-up costs (small lots).
This is exactly where lean production comes in: high setup times force large lots, large lots create inventory, inventory extends lead times and hides problems. When setup times are systematically reduced, however, small lots become economical – all the way to production at customer takt. Short setup times are thus the technical prerequisite for principles such as just-in-time and kanban and for high flexibility with small order quantities and many variants.
Setup time in the ERP and PPS system
In the ERP or PPS system, setup time is a standard time of the operation in the routing, assigned there to the respective workstation. When a production order is created, the system applies the setup time once per operation, while it multiplies the processing time by the lot size. The sum yields the workstation occupancy time that feeds into scheduling and capacity planning. In costing, the setup time is valued with the workstation cost rate and reported as setup costs – usually separately from the quantity-dependent manufacturing costs.
Advanced systems also account for setup time in detailed scheduling. Using sequence-dependent setup times or setup matrices, the system can group orders so that similar items run consecutively and changeovers are minimized – for example by combining identical colors, tools or dimensions. Feedback from shop floor data collection provides the actual setup times used to maintain the standards and make setup optimizations measurable.
Distinction: setup time vs. processing time, lead time and occupancy time
Setup time occurs once per lot, whereas processing or unit time occurs per manufactured unit – together they form the occupancy time, i.e. the total time the order ties up the workstation. Lead time is the broader concept: in addition to setup and processing time, it includes the transition times (queue, transport and waiting times between operations) and describes the total time an order spends in production. Setup time is therefore a building block of occupancy time and thus of lead time, not their synonym.
Reducing setup time: SMED and organizational levers
Setup time reduction is a classic field of process improvement. Its methodical core is SMED: first, all setup activities are recorded and separated into internal and external, then as much as possible is shifted to external setup, and finally the remaining internal steps are simplified – through quick-clamping systems, standardized stops, intermediate tables or parameterized programs. The ideal goal is a setup in the single-digit minute range, which makes small lots and frequent changeovers economical.
Alongside the technology, organizational levers take effect: clever sequencing that minimizes sequence-dependent setup times, clearly defined setup standards and checklists, well-prepared tool and material provisioning, and trained staff. Because success can only be steered with reliable figures, measured actual setup times from the ERP or shop floor data collection are the foundation – they reveal scatter and outliers and make visible whether a setup optimization is actually taking hold.
DACH specifics: REFA and standard time determination
In German-speaking countries, the determination of setup times is strongly shaped by industrial engineering and in particular by the REFA time-structuring model. There, the order time is systematically broken down into setup time (per order) and execution time (per unit), and the setup time further into basic setup time, setup recovery time and setup allowance time. This structure forms the basis for traceable, verifiable standard times – for example as a basis for costing, performance-based pay or capacity calculation.
In the practice of many mid-sized companies, however, setup times exist only as rough empirical values in the routing. Carefully determined setup times that are regularly reconciled with actual data are therefore a double win: they make schedules and costing more reliable and at the same time uncover the greatest potential for setup optimization.
Example
Example: plastics processor with injection molding machines
A mid-sized plastics processor manufactures housing parts on injection molding machines. A tool change from one item to the next currently takes around 90 minutes – during which the machine stands still. For a lot of 5,000 parts with a 20-second cycle time, the setup time is still spread out tolerably; but for a rush order of only 300 parts, the setup accounts for a multiple of the actual processing, and the setup costs per unit explode.
The company carries out a SMED analysis, separates internal and external setup, and from now on provides tools, sprue and material while the machine is still running the previous lot. Together with quick couplings and a preheated changeover tool, the internal setup time drops to 25 minutes. In the ERP the standard is adjusted; detailed scheduling now groups orders with the same tool. The result: small lots become economical, machine utilization rises, and the calculated setup costs per order fall significantly.
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