Before approving a robot purchase, most manufacturers want a clear picture of payback period. Here is a straightforward framework for estimating ROI on a collaborative or teach-free robot investment.
Step 1: Total Installed Cost
Add the robot arm, end-of-arm tooling (gripper, welding torch, etc.), safety equipment, and integration/commissioning labor. Teach-free robots typically reduce this last line item significantly since less programming labor is required.
Step 2: Labor Cost Displaced or Reallocated
Calculate the fully loaded cost of the labor hours the robot replaces or frees up per shift, including wages, benefits, and overtime premiums where applicable. Many manufacturers reallocate staff to higher-value tasks rather than reducing headcount.
Step 3: Productivity Gains
Account for additional output from reduced idle time, unattended/lights-out operation, and consistent cycle times without operator fatigue or breaks.
Step 4: Quality and Scrap Reduction
Consistent robotic handling often reduces scrap and rework compared to manual processes — factor in the cost savings from improved first-pass yield.
Step 5: Calculate Payback Period
Divide total installed cost by the combined monthly savings from labor, productivity, and quality gains. Most CobotWise customers see payback periods of 6 to 18 months, depending on shift pattern and application.
Want a custom ROI estimate for your process? Send us your part and cycle-time details and our engineers will build one for you.