How to Create More Realistic ROI Calculations

ROI calculations for industrial automation typically account for labor costs and automation costs but fall short on accounting for other factors. In order to gain a better, more well-rounded prediction of ROI calculations consider adding some of these important variables to your calculations.

Throughput

Since implementing automation typically means that more product will be passing through your line, your ROI calculation should account for this. The A3 Association for Advancing Automation system value calculator automatically estimates a 27% productivity gain. At Zeta Group Engineering we have seen customers increase their throughput between 25-50%.

Quality

Automating processes means that there will be a more predictable repeatability. With a higher quality of work, the number of mistakes and loss of product decreases.

Hiring and Retention Costs

We have recently seen an increased shortage of workers. This means that companies need to do more to hire new workers and provide more to ensure workers will stay with the company.

Opportunity Costs

When a shortage of workers occurs a line may need to shut down until gaps in the workforce can be filled. This can lead to a loss of revenue because of the lack of manufacturing capabilities. With an already demanding supply chain, a shut down line because of lack of help may cause an even greater pressure on the supply chain.

Safety and Ergonomics

Certain jobs are dull, dirty, and dangerous. Taking that work and shifting it towards automation means that workers can be moved to safer and more rewarding jobs. Reducing the risk of work accidents also helps save on potential fees and settlements that may occur from work related injuries.

Zeta Group Engineering is a robotic integrator and conveyor manufacturer based in Green Bay, Wisconsin.

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