How to Justify the Cost of Robotics–Part 1
The upfront price tag can be intimidating, but you can make the case for robotics.
When it comes to automation, the potential for significant cost savings should be a compelling reason to invest in expensive equipment. This can be demonstrated through the two forms of benefits— “hard” and “soft”. In today’s industrial environment, the prospect of labor savings, a key “hard” benefit, can help make a strong case for AMRs. The math behind the cost savings with AMRs can quickly add up, making the investment worthwhile.
Without a doubt, the upfront capital investment for AMRs is high, running up to about $30,000 for one unit in some cases. If you’re running just one shift in your warehouse and paying your staff $15 without benefits, you’re looking at a one-for-one replacement when you add in electricity, support, and maintenance costs. However, if you’re running two shifts and paying your workers more than $15 an hour—a likely scenario—your savings quickly double. Take that up to three shifts, and it triples. In a post-pandemic world where reliable labor is very hard to come by, adding AMRs can make all the financial sense.
Those are just the start of the “hard” benefits to help you justify the investment. There is also the uptick in productivity that AMRs can provide. Consider your average staff: high performers at one end and low performers at the other. When you add in AMRs to assist those employees, performance will still vary from one person to the next. However, the robots will help even out that performance, delivering a more even result. Everyone will be more productive and more predictable in their performance. AMRS can make planning much easier—you can count on providing a steadier result each shift, not having to worry as much about the under-performers on your team.
AMRs, as robots that transport items from point A to point B, can significantly improve order and inventory accuracy. This not only reduces the number of returns, a costly impact, but also reassures you about the quality of your operations. Moreover, the space savings they deliver can boost your productivity and save you the need for expansion or new storage systems.
AMRs can also play a crucial role in enhancing your e-commerce capabilities. In a world where Amazon has set high delivery expectations, the ability to keep customers happy by delivering their orders quickly is paramount. By reducing your order cycle time and getting packages out the door swiftly, you can retain your customers. AMRs can be a game-changer in this aspect, giving you a competitive edge in the market.
When looking for a return on your investment, the math is simple: investment divided by benefit. In the world of robots, the benefits make the case, beginning with the hard benefits.
In part two, we’ll look at the soft benefits.
Source: Chris Lingamfelter, Robot Advisors
Learn more about The Robotics Group (TRG): mhi.org/trg
For further articles from the The Robotics Group (TRG):
Podcast: Robotics and Humans: A Synergistic Workforce
Order Orchestration Optimization Through Robots
Robotics in Logistics, Part 2 – You’ve Decided to Add Robots—Now What?
Will Robots Change Your Warehouse Culture?
