How to Make Mobile Automation Affordable
In a world where the labor force is shrinking and automation is thus becoming increasingly important, operations that have never considered mobile automation are now taking a closer look. But even with faster return on investment than ever before, financing automation can feel like a budget killer. But it doesn’t have to be—by getting creative, you can justify the investment.
Mobile Automation Vehicles (MAV) are driverless, electric vehicles with ability to select a path and destination, all while avoiding potential collisions. MAV encompasses AGV, AMR, UGV, EGV, SGV, AGT, and other acronyms for automatically moving vehicle. MAVs manage material flows automatically and offer many advantages. Still, perceptions remain that they are slow, cash-eating drags on the bottom line.
Those days are over, however. Today’s MAVs are faster, more affordable, have improved controls and software, safer, and offer improved energy solutions.
To understand how affordable MAVs can be, it’s important to move beyond old cost justification models, which took into accounts the number of heads saved—if you pay “x” you get “y” in return. But calculating ROI and measuring it against the risk of failure is not so straightforward.
Instead, your ROI calculation should consider factors beyond the obvious financial calculation. Also consider the increased flexibility you gain, increased capacity, and operating hours, as well. You also get indirect benefits like customer buy in and improved system-level communication. Today’s MAVs are more readily available than ever before and feature a faster implementation timeline.
Even better, there are now leasing options available for MAVs. Here’s where that option can make sense to your operations:
- You pay for the equipment as you gain operational benefits
- Leasing saves your capital as it requires no down payment and low replacement costs
- You can bundle the equipment, installation, software, and services
- It converts a large cash outlay into a low, affordable monthly payment
As an example, if a customer is looking at a $1 million Mobile Automation System, options include paying cash, using bank lines of credit, or leasing the equipment. If you choose leasing, you’ll be paying in the range of $890,000 spread over a three- to five-year lease term.
If you decide to go after a traditional investment in the equipment, you can also make the ROI more easily justifiable with a few key steps:
- Look down the road at the lifespan of the asset you are considering, the economic forecast and the volatility of your environment before defining a period of evaluation. A 10-year look forward can serve as a good default.
- State the reasons for considering the investment and don’t lose sight of them.
- Understand that there is a continuum of objectives that may cause your ROI to be more or less tangible.
- Detail the cash in/out that will occur over the proposed period.
- Look at this from both an operational and financial perspective.
MAVs become a more attractive solution every day, and with some creativity, affording them has never been easier, either.
To learn more about how mobile automation can benefit you:
To find out more about MHI’s MAG Industry Group: https://www.mhi.org/mag