How do you calculate the return on investment (ROI) of implementing a Q-Span Workstation, with a collaborative robot, to automate small-part measurements?
While automation delivers value in many ways, it’s common to calculate ROI based on labor savings alone. When we do this, there are two different scenarios to consider. Both are based on the following typical assumptions:
- Two full-time employees are making measurements using digital calipers, and manually recording the data.
- These employees work sequential eight-hour shifts for a total of 10 shifts per week.
- Each shift has 6.8 hours of measuring time and 1.2 hours for breaks, lunch, meetings, etc.
- Each part inspection requires 90 seconds: 60 seconds for measurement and 30 seconds for recording the results.
- This corresponds to an inspection capacity of about 3,000 parts per week.
- The total investment to purchase and deploy a Q-Span Workstation is about $100K.
Scenario 1: Remain at the same capacity
The first scenario is to remain at the same capacity, using a Q-Span Workstation to automatically inspect the same number of parts per week that you’re currently inspecting manually.
Instead of measuring parts, your employees will set up and feed part trays to the Q-Span Workstation. The robotic system automatically picks parts from the trays, measures one or more features on each part, electronically logs the data, and places parts into pass, fail or sorted output trays based on the results.
The measurement task is now a small percentage of the employees’ shift time – perhaps 15%. This means that direct labor cost for QC part measurement can be reduced by at least 80%, while freeing the employees to do other QC work.
At a labor cost of around $35 per hour (salary plus benefits), your company can realize a full ROI in about ten (10) months based on labor savings alone.
Scenario 2: Use automation to increase capacity
The second scenario considers the ability of a Q-Span System to increase your capacity without adding staff. The time to full ROI is shortened in direct proportion to the capacity increase.
That is, if you take full advantage of automation to achieve full capacity, inspecting about 4,500 parts per week, your return on investment will be about six (6) months based on labor savings alone.
Applying the ROI calculation to your QC department
Of course, there are a great number of variables and assumptions inside these calculations. Variables include the number of parts you measure per week, your employee’s salary and benefits, how long it takes them to measure each part, and how long it takes a Q-Span System to do the same task (generally the same or faster).
Q-Span Workstations are ideal for high-mix small-batch manufacturers where flexibility and fast switch-over times are essential. We can help you work through your specific details and estimate your ROI.
Next Week: Beyond ROI to Value Creation.