The basic formula for calculating the ROI percentage = (Net Profit / Invested Capital) x 100.
In practice, however, it is more complex than a mathematical formula: many factors have to be taken into consideration.
Thus determining the real gains in both the short and long term.
The calculation of the return on investment (ROI) of robots is generally related to several criteria:
- Initial robot cost
- Ongoing costs
- Labor cost savings
- Increased productivity
- Tax incentives
- Robot lifetime
Find all values for automation ROI
Determine current costs
- Cost of employees to be replaced (per year)
- Cost of hiring, training, holidays and strikes of employees (per year)
- Cost of production errors or rejects (per year)
- Cost of quality control and rework (per year)
- Cost of keeping safety high (per year)
- Cost of accidents and workers’ compensation (probable)
Determining the costs of a robotic workstation
- Cost of one or more robotics cell (one-off)
- Cost of service and maintenance (per year)
- Cost of wearing parts (per year)
- Cost of electricity used by machines (per year)
- Cost of personnel to operate the systems (per year)
- Cost of unplanned failures (probable)
Determine additional earnings
- Increase in production (per year)
- Increase in customer loyalty and retention (probable)
- Increased safety for staff, fewer accidents (probable)
- Increased products quality (probable)
- Increase in types of processing, such as extreme temperatures (possible)
- Tax benefits e.g. for Industry 4.0 (one-off)
Usually the initial cost of a robot implementation is amortised in about 1 year.
To get a fair estimate of profitability, it should be calculated over a horizon of 5 to 10 years, as an industrial robot works on average for 15 years, but with routine and predictive maintenance it can be up to 30 years.
Online tools ROI Robot Calculator
If you want to quickly calculate the Return On Investment of a robotized cells, you can use these online tools:
Quick Robotics ROI Calculator:
Advanced Robotics ROI Calculator:
Cobot ROI Calculator:
Brand Robotics ROI Calculator:
Excel Download Robotics ROI Calculator:
A big problem
The high initial cost seems to be a disadvantage, but the real problem is that robotic automation, even though it has been used in industry for more than 40 years, is still seen as an uncertain investment.
However, when all the risks and benefits are weighed up, as described above, there is no doubt about the effectiveness of robots.
Thanks to the increasing demand for automation and improved hardware, the average ROI for robotising a process is increasingly high.
In addition, to reduce the initial investment, one can opt for used or reconditioned robots, which can have a good life expectancy.
Still in doubt?
Contact a system integrator who can answer your questions and provide you with a more accurate quote.
Or ask our robotics and automation community