When you’re investing in material handling and automation, it’s important to maximize your return on investment (ROI) relative to the cost of the material handling system. This guide provides a framework for calculating the costs, benefits, and payback period of an automation investment.
Use these steps as a guide to build a powerful business case, prove the financial value of your next project, and discover how Solutions In Action engineers systems that deliver a clear and predictable return.
Your Warehouse Automation Cost Analysis
First, you need to factor in the initial costs of hardware and software, including conveyors, robotics, and warehouse management systems. Consider the installation and integration fees. You also need to estimate the costs of training your employees to use the new material handling system efficiently.
Calculating Your Warehouse Efficiency ROI
Once you have a clear picture of the costs, you can calculate your true material handling ROI by focusing on the significant returns from increased throughput and productivity. The primary driver of your automation’s return on investment comes from identifying the key cost savings from warehouse automation in your facility. The main material handling investment benefits include:
Reducing Direct Labor Costs
One of the fastest ways to lower labor costs is to automate repetitive tasks such as transporting, picking, or sorting goods.
The ROI of conveyor systems can be significant. Our custom conveyor solutions create an automated highway through your facility, maximizing efficiency and eliminating the need for staff to move goods from point A to B.
For more complex routes, automated guided vehicles (AGVs) can take over transport duties, reducing labor costs. From AGVs to robot palletizers, our automation equipment allows you to handle a higher volume with a lower headcount and reduce the need for costly overtime during peak season. Automation frees up your workers to focus on more valuable tasks that better use their skills.
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