In today’s marketplace, robotics and automation are gaining traction in places that never considered them before. In years past, the significant driver for ROI (Return on Investment) was saved labor costs. This was a simple calculation of labor burden rate over multiple shifts over the course of the year. Often this lead to only larger companies with 24/7 operations to be able to justify an ROI of 2-3 years. Today, there is a larger conversation to have when calculating your ROI that goes beyond a simple labor cost savings.
#1 Human Resources Costs
You first have to ask yourself how much does it cost to go through the process of hiring a new employee and what is your current turnover rate? Whether it’s the time of a Operations Manager or an HR department, the cost of job listing, interviewing, hiring bonuses and background checks – it’s often over $5000 to bring a new hire into the building. If your turnover rate is 20-30% then you can be seeing a substantial hidden cost that can add to an ROI discussion.
#2 New Hire Inefficiency and Lack of Full Staffing
Depending on your turnover rate you’re either running at less than full staffing or you have a percentage of your team that are new hires. How much throughput and efficiency are you losing because your team is not at full strength or you have new hires that don’t work as fast as seasoned associates? You have to ask yourself what is the cost of operating at 80%-90% capacity.
#3 Inaccurate Orders and Damaged Products
Humans are not perfect and errors almost always occur. These mistakes often have a price tag associated with them over the course of the year. How many inaccurate picks/orders do you have in a given year? What is the cost of returns from customers? On top of that, was is the cost of damage product that occurs during material handling? The cost of increase accuracy and reducing damage to both product and infrastructure from material handling equipment strikes has to go into the equation of any ROI discussion.
#4 Increased Workplace Safety
Material handling equipment requires safe and alert operators and any safety or operations manager has put into place rules and operation procedures to keep their associates safe from accidents. Autonomous Mobile Robots (AMRs) adhere to ANSI B56.5 regulations that increase overall safety of any operation. What is the cost of reduce incidents over the course of a year in your facility?
#5 Working Smarter and Not Harder
With labor shortages across the globe, most operations are forced to do more with less. With robotics and automation, those associates are now able to do more complex tasks while relying on an AMR to do easy tasks like transporting a pallet 500 feet across a facility all day long. Robotics fill the gaps within an operation allowing you to be closer to fully staffed.
All these reasons and more are why you should be considering automation. It is more affordable than ever, so contact ELT Systems Group for a free consultative conversation to see if robotics and automation is the right solution for you.