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If You Ever Needed a Competitive Advantage, NOW is the Time to Get It!

competitive advantage

Cost of Robots



Published on

Nov 18, 2022

With shifting market conditions, having a competitive advantage and tilting the playing field in your direction has never been more valuable.

Read Time: Just over 3 Minutes

Word Count: 875 Words

Key Takeaway: Current market conditions make it more advantageous to have a purpose-built CNC machine-tending robot in place now.

During the pandemic, supply chain issues plagued the economy, and shortages drove up prices. While you are likely able to pass along increased costs, it wasn’t uncommon to see big companies announce a price increase 90 days out and see that same company announce an additional price increase even before the first price increase was implemented.

It wasn’t just limited to big companies. Even companies providing raw materials were caught in the same bind.

Then there was a labor shortage. That hasn’t gone away. With the labor shortage, you are not just competing with other machine shops for that labor pool. You are also competing with higher-paying industries for that labor pool. Everything points to over the next seven years, that labor shortage getting worse, not better.

Despite the fact, there have been layoffs in some industries, that hasn’t helped machine shops. The people being laid off aren’t exactly the type of people who would jump at the chance to operate a CNC machine for a ten-hour shift.

Raw material and labor increases put pressure on your margins.

Right when we seem to be coming out on the backside of that, productivity is precipitously dropping. The labor shortage has not improved. As the Consumer Price Index, (CPI) continues to climb, people want raises to keep up. The wage inflationary trends have not abated and continue to push wages higher.

The impact?

That put pressure on your margins, and you might still feel the squeeze.

Experts are now telling us that disinflation is on the horizon. At the same time, productivity drops are to be expected and those productivity drops will be coupled with inflationary wage pressures. To make matters worse, you will have a significantly harder time passing on your cost increases.

What does it mean?

You guessed it.

Pressure on your margins.

Now would be the time if you ever needed a competitive advantage that could tilt the playing field in your direction. It is clear that under existing conditions, the companies best suited to survive and thrive are the ones that can produce for less and not have their margins suffer.

The only way to position yourself is to optimize automation and technology. Wherever you can, add technology that improves efficiency and helps you come down the cost curve. That is the only way. That isn’t economist speak; that is machine shop math. Your competitive advantage will come from a lower cost basis.

The competitive advantage that assists in mitigating labor shortage, productivity drops, and inflationary wage pressures is the same – Turn-Assist and Mill-Assist.

Purpose-built, CNC machine-tending robots from RoboJob-USA.

Why is that such a competitive advantage?

Each robot protects you from inflationary wage pressures.

You can produce more parts with a lower cost basis because the robot costs less than $14.00/hour you are paying that machine operator. Not only is the robot cost less than $14.00/hour wage, but the robot also needs no benefits. There is no FICA payment. There is no unemployment insurance, no workers' compensation payment, or anything else.

The only form of maintenance the robot needs each year is a brand-new set of four C-Size batteries. Those batteries keep the time and calendar in sync if the power goes out. No other form of maintenance exists, and the robot will run for 75,000 to 100,000 hours before real preventative maintenance is required.

How many years will it take you to run that robot for 75,000 hours?

Even if you finance the entire purchase at today’s interest rates, your monthly cost is LESS THAN the machine operator wage, not including benefits.

Once the finance term is complete, you are even farther ahead because there is no hourly rate, no benefits, and no missed production dates because someone called off or quit. The tone and tenor around your machine shop dramatically change for the better.

The robot is always there. Always working. If the robot had long hair and could talk, it would have been cast in the “Never Not Working” ad instead of Troy Polamalu.

While the discussion here has focused on the wage and the hedge against inflation, our customers buy the robots for differing reasons. The main reason customers tell us they bought the robot is to control production first and foremost.

They can no longer afford production gaps caused by people not at their stations doing their assigned tasks.

Attendance gaps put production behind schedule, so you can’t ship on time. When you can’t ship on time, you can’t invoice, which delays your cash flow.

Think about inflationary wages and not being able to invoice. Of the two, which has a bigger impact on your operation?

If you have the robot in place, the answer to that question is neither because it protects you from both.

A competitive advantage is always a good idea regardless of where the market is sitting or headed. Few things in the machine shop universe give you a competitive advantage, like a purpose-built, CNC machine-tending robot.

To explore how having a purpose-built robot tending your CNC machines gives your machine shop a competitive advantage, call us at 866-952-9020 and then press 1 to start the conversation.

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