Calculating the ROI of Your First Industrial or Collaborative Robots

The decision to automate manual processes hinges on robots’ ability to deliver a return on investment (ROI) in a reasonable amount of time. Any robot must quantitatively prove its worth through cost savings and gains in productivity. Without an expected ROI, robotic automation is not a profitable venture.

Calculating ROI is a critical part of the decision-making process, especially for first-time users of industrial or collaborative robots. There are many different factors that go into a true calculation of robotic ROI, for both the investment being made in robotics and the expected cost savings.

Calculating Robotic ROI: Robotic Investments

The first step in calculating robotic ROI is understanding the full investment being made, beyond just the cost of the robotic systems. Most robotic systems require a suite of accessories, which add to the cost of the system. This could include vision systems, grippers, physical barriers, machine interfaces and more.

Other typical costs include the transportation of the equipment, as well as the integration of the system and ongoing maintenance. While there are typically labor savings associated with automation, most robotic systems require more qualified employees to operate the system who command higher salaries. The level of total investment required varies widely depending on the type of robotic system.

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Calculating Robotic ROI: Robotic Productivity

To accurately calculate ROI, you need to understand the expected productivity of the robotic system in relation to the expected investment. This part of the calculation will be highly application-specific and will require a close look at current processes.

Labor savings will be one of the easier parts of this calculation, but you also need to determine how many shifts the robot will operate and what new throughput levels will look like. Will there be cost savings from reduced material waste and rework? Savings derived from part quality is an important consideration too, as robots typically improve part consistency and quality.

Calculating robotic ROI requires a close examination of current processes, a deep understanding of the full scope of the investment being made, and an accurate estimation of expected gains in efficiency and cost savings.

For more help calculating ROI, try the Robotic Industries Association’s free robotic ROI calculator.