How Automation Pays for Itself

Paddles on a laner, designed for an automated tissue production line.

We here it all the time. "We are not looking to automate right now, it's not in the budget." "Come back next fiscal year when we have more funds." "Sorry, we have to cancel that project because other items took priority". 

Many companies, especially small, see automation as a nice perk, but not a necessity for doing business. If a company is meeting its production needs they don't see the need, and if they are not meeting production they are more focused on just adding any kind of production before looking at a customized automation solution.

Frankly, all of these reasons are just excuses.

The reality is that a well thought out, designed, and implement automation solution can not only be less expensive than you think, it will also pay for itself in a short period of time.

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Here are just a few of  the ways an automated system can pay for itself.

Increasing Production

An automate product line can produce far more product faster than a manual operation. More production means filling orders faster or getting more product out to demanding customers sooner. Just look at Apple and their iPhone 6. They are making half a million of those a day! You can bet they have some really great automation in place.

For a more concrete example consider this. A good period of time for a return on investment for new production equipment is 12 months. If a new system allows you to generate $100,000 of increased profit over 12 months and costs $1,000,000, that is a good system to implement, as it will have paid for itself in just 10 months. The sooner the system is implemented the sooner you can star reaping the profits.

The pnumatic controls on a paddle laner.

Reducing Costs

Another way that a automation solution can pay for itself is to reduce costs of production. If a piece of equipment allows you to reduce the staff on a production line it will once again pay for itself over time. For a $200,000 system to pay itself off in a year in needs to reduce the human intervention by that same amount. Assuming a conservative cost of $25 per hour for personnel, that would require a reduction of 8,000 hours of labor. Averaging that out over a standard 2,000 work year per employee, the equipment needs to save you the work of 4 employees, and because you can run the equipment 24 hours a day 7 days a week that averages out to just one employee per shift.

Our Momentumâ„¢ Wipes Canister Loader is only $400,000 and it can do the work of 5 workers, reducing the staff by 80%! Its pays for itself in months!

Increasing Quality

Machines can do what humans cannot. They are more precise and able to replicate the exact same motion again and again without fail. With this increased precision and consistency comes increased quality. By increasing the quality of your production line you reduce the amount of scrap and need for rework. Reducing an assembly lines reject rate from 5% to 0.5% will reduce the costs of materials and increase the production yield. For a rapidly moving production line these benefits can add up fast.

Finally, you can be sure your best competition is automating.

In addition to these 3 main benefits automation also has many side benefits that affect employees and your bottom line. These include increased safety, reduced health issues due to repetitive work, and larger opportunities for orders from major customers.

Finally, you can be sure your best competition is automating. That's what makes them stand out.

The sooner you automate the better. It's time to stop making excuses.


How Automation Pays for Itself was posted to Words in Motion - A blog created by Product Handling Concepts, your source for conveyor, conveyor equipment, and automation solutions.