How to Calculate Earned Hours?

 

How to Calculate Earned Hours for Accurate Production Efficiency

Earned Hours (EH) represent the amount of work a production team should earn based on the number of pieces they produce and the Standard Minute Value (SMV) of those pieces.

It shows how many hours of work were “earned” according to standard allowed minutes.

Formula for Earned Hours

1. For a single style

$$\textbf{Earned Hours (EH)} = \frac{\text{Total Production Quantity} \times \text{SMV}}{60}$$

2. For multiple styles in the same line

If a sewing line produces more than one style:

$$\textbf{Total Earned Hours} = \sum \left(\frac{\text{Production Qty of Style} \times \text{SMV of Style}}{60}\right)$$

Example Calculation

Example 1 – Single Style

• Production = 600 pieces

• SMV = 10 minutes

$$EH = \frac{600 \times 10}{60} = 100 \text{ hours}$$

The line earned 100 standard hours for producing 600 pieces.

Example 2 – Multi-Style Production

• Style A: 300 pcs, SMV 8

• Style B: 200 pcs, SMV 12

$$EH_A = \frac{300 \times 8}{60} = 40 \text{ hours}$$ $$EH_B = \frac{200 \times 12}{60} = 40 \text{ hours}$$

Total Earned Hours = 40 + 40 = 80 hours

Why Earned Hours Matter

Earned Hours help evaluate:

• Line efficiency

• Operator productivity

• Daily line performance

• Capacity planning

• Costing vs. actual output

Link to Line Efficiency

After calculating Earned Hours, you can calculate production efficiency:

$$\textbf{Efficiency (\%)} = \frac{\text{Earned Hours}}{\text{Total Man-hours Worked}} \times 100$$

Example:
Earned Hours = 80
Total manpower = 40 operators
Working hours = 8

Total man-hours = 40 × 8 = 320

$$Efficiency = \frac{80}{320} \times 100 = 25\%$$