The Rules of ROI Have Changed….Drastically

We were with a customer recently, talking about a sizeable project, and pondering what the ROI would look like. You know, how many people can you reassign after you put in this automation, and how much labor cost will you save. The customer was quick to remind us that the cost of the labor is not important, because they can’t even get the labor. So, the cost is how much it will be if they cannot even complete the work to be done. 

10 years ago, you would figure $30,000 per head as a burdened labor cost. These days, assuming that you can even get the labor, the burdened cost per head is probably closer to $45,000. Making automation projects much easier to cost justify. And they are a no brainer at any cost, if you cannot find people to do the work. 

So, a $300,000 piece of automation that saves you 10 employees has an 8 month payback, just on the labor. But it can save your business from bankruptcy, if you can’t get 10 people to show up to do the work and the only way to stay in business is to add the automation to get the job done. 

Also, many times the automation that we are putting in place is replacing low paying, back breaking work. Actually, bettering the workplace by eliminating physically demanding jobs that no one wants to do at any price. Or in the case of mobile power carts, saving thousands of steps per day and making a very laborious job much more tolerable for the workers. 

Pretty grisly stuff to talk about, but it is the position that we find many of our customers in these days.  So, give us a call to see how we can help make your operations more efficient.

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