Setup time is the time it takes to reconfigure a machine to run a different part. Setup consists of two basic categories.
Internal setup time. This type of setup time requires that a machine be shut down to do the tasks required to get ready for a different product. This is extremely wasteful as production comes to a grinding halt.
External setup time. External setup tasks can be done while machine is operating. Gathering components fall into this category. Preparing interchangeable tooling and fixtures are also external setup tasks.
Lower setup times allows more flexibility in an operation. If the company can switch rapidly between products, it does not have to do long production runs. This allows them to keep lower inventory on hand. Setup reduction is one of the keys to a Lean operation. Aggressively reducing setup time down to a single digit (i.e. nine minutes or less), is known as SMED, or “single minute exchange of dies”.
This term does have a bit of confusion associated with it. Some people use this setup time interchangeably with the term “changeover“. Others though, look at setup time is a component of changeover. They think of changeover as the total time it takes to go from one production part to another. This may include a variety of tasks that don’t necessarily involve the machine. As an example, swapping out bins of parts would be a changeover task, but not a setup task.