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Key Take Aways: While the cost of adding CNC machine tending robots can seem daunting, the cost of NOT adding them is now significantly more than the cost of adding them. We walk you through the calculations
In part 1, we reviewed some of the costs of not adding CNC automation. Most of our focus was on losses of existing revenue and losses of potential revenue. We also pointed out that you should look at the lifetime total value of a customer when gaining or losing one.
PART 2:
We should start in the some of the areas that you can see on your P&L. What is the largest cost for the majority of businesses? Labor. It is that simple. Add a CNC machine tending robot and you no longer need a machine operator to tend the CNC. That means you can redeploy that lucky person to a new role in your organization.
Not only do you have labor savings, but, direct labor and benefits are not the only labor expense. Recruiting is another expense that is diminished. You won’t be recruiting for another machine operator because the robot is always there, ready to work. Now you no longer have the costs associated with turnover in that role.
You can probably find some of your recruiting costs in your P&L. It may be hard to break out the machine operator recruiting costs because it is lumped in with the others. You could simply take the recruiting expense, divide it by the number of roles and subtract the costs associated with the machine operator because those are no longer valid.
Not only does this apply to the immediate role, but you won’t have those costs for the next two decades. The robot should last at least that long. It is likely to last longer. These are Fanuc robots.
With the robot in place, there is no wage inflation because you are not paying the robot. Remember, once the robot is paid for, you are operating labor free for a couple of decades. You may think you didn’t read that last sentence correctly, but you did. You won’t have machine operator labor costs for the next two decades.
There are also some likely productivity increases. Like the ability to run jobs with no machine operator labor costs, you also get productivity increases. How much? Many customers tell us they see an increase of productivity of more than 30%.
A3, The Association of Advancing Automation has an excellent ROI calculator on their website. Using our robots and typical machine shop numbers that we’ve gleaned through experience with our customers, machine shops typically see a return on investment in about a year.
Once the robot is paid for, the financial advantages are extraordinary. More importantly, they are real.
With our robots, customers are seeing a cash savings of four to six times the cost of the robot. They also see productivity increases that translate into another four times the cost of the robot.
That doesn’t include revenue increases as a result of being able to handle more revenue with lower costs.
Those numbers are real. If you haven’t made the plunge into our robots, your skepticism is warranted. But ask our customers and they will tell you.
Making an investment in CNC automation can be financially daunting until you look at the entire picture.
One more point in the cost of not adding a CNC machine tending robot. Your competitors have them. If you don’t, trying to compete with those shops is incredibly difficult. How long do you want your shop to be at a substantial disadvantage?
We see astute machine shop leaders making the plunge for the first robot and then quickly coming back and buying more. Why? Because the robot solves so many challenges and it rapidly pays for itself. If that wasn’t the case, they wouldn’t be selling at the rate they are.
Ready to start the conversation? Call us at 866-952-9020 and then press 1 to start the conversation.