How To Evaluate ROI On Industrial Automation
Learn how to calculate ROI on your industrial equipment.
How do you know if you made the right decision by purchasing industrial automation?
You find the ROI, of course!
Calculating the return on investment is a clear way to show how your equipment is generating revenue for your company.
Learn more about the importance of ROI and how to find it below.
Calculation of ROI for Robotic Automation
Manufacturing is a difficult industry to be in, especially in the global market.
How can robotic automation help you with grow within a reasonable budget? In that same vein, what is the return for the investment that you made in automating your processes?
As a manufacturing manager or other leadership position, you deserve to know the exact ROI on an automation product that you buy.
Simple industrial automation ROI formula
The simple return on investment (ROI) formula is always calculated as a percentage.
ROI = Gains - Investment x 100
Investment
From the above formula, it is clear that the higher the percentage, the greater will be the benefits gained by the manufacturing company.
Determine a suitable time duration to consider when computing this formula. This might be 6 months, 1 year, 5 years, or longer. Longer time intervals allow a clearer picture of your ROI.
Calculating ROI may seem complex at the start, but the following steps will convince you about the quality and benefits that robots can bring to your business.
Total cost of industrial automation
Need a more complete picture of your industrial automation ROI? Find out the total expense that will be required to make your company fully automated. This includes the following expenses.
MAINTENANCE COSTS
An industrial robot requires supervision to sustain a long usable life. According to Robotic Industries Association (RIA), the typical maintenance cost of a robot is about $500 per annum.
OPERATION COSTS
Determine the power consumption of a robot per year, as well as the labor involved in programming and operating the robot.
TRAINING COSTS
To understand new machinery or a robotic model, in-depth training may be required. Sometimes it takes weeks of training to learn how to use a machine.
By taking into account these details, you can estimate manufacturing ROI more precisely.
Savings that you can make through automation
To get even more granular, determine the potential future savings of your robot.
HIGHER PRODUCTIVITY RATE
Robots work more quickly and efficiently than humans. They can take extra shifts around the clock without little to no error margin. Find out what your productivity cost savings are by comparing manual work production with robotic manufacturing.
LABOR SAVINGS
Automation industry specialist and former Engelberger Robotics Award winner Ron Potter describes ROI as long-term strategic planning of industries that want to excel.
According to Potter, an average-sized robot consumes 7.35kW of power. Average energy costs are 10 cents per kW. as per 2013 rates of industrial use, defined by U.S. Department of Energy.
That means the average expense of a medium-sized robot will be 75 cents per hour. Comparing this cost to human labor, manufacturers can save between $15 to $20 an hour on labor.
Online ROI calculator
Want a cash flow calculation but don’t have time for the details?
Check out the online ROI Robot System Value Calculator if you want to quickly determine an estimated ROI of your robot.
NRTC Automation services
Want to generate revenue in your manufacturing facility?
Work with NRTC Automation. We offer personalized turnkey automation solutions to help you meet your production goals.
NRTC will design, build, engineer, and install a custom work cell specific to your application needs. We also offer financing on our work cells so you can automate on a budget.
Our experts will guide your team in robotics education with hands-on experience. Training is provided both on our site as well as at your desired location. Give your employees the confidence to solve all technical issues, starting from basic programming to complex diagnostics.
Give your old machinery reconditioning treatment to extend usable life and reduce costly repairs with NRTC’s Industrial Robot Refurbishing Services.
Instead of spending valuable time storing and managing extra tools and equipment, send them to NRTC Automation. Your machinery will be stored in a climate-controlled space, and we’ll send it back as soon as you need it.
Automate your facility
By following our guidelines and trusting in our robotic automation technology, you will be able to lower your production waste and boost your revenue.
NRTC Automation is a trusted partner of top auto manufacturers around the world and is here to automate your company for you. So what keeps you waiting? Contact us now if you want to keep up with the pace of the advanced industrial world.
VISIT NRTC AUTOMATION TODAY
NRTC Automation is dedicated to providing high-value industrial automation and manufacturing equipment solutions to all our customers.
From decommissioning and tear out to industrial robotic training services to custom flexible work cells, NRTC is the key to integrate your workplace. With personalized training and custom-built designs, NRTC Automation is the destination for all your industrial automation and manufacturing equipment services.
Contact us today to learn more about how we can help you meet your production goals.