Justifying Capital Expenditure on Automation Systems
In most organizations, when an engineer, manager, consultant, or supplier proposes an idea to improve a process, leadership likely expects that a business case be developed to justify the capital expenditure.
Whatever the benefit (production rate, quality, safety, etc.) may be, leadership wants to know the nature of the return on investment (ROI). Assuming availability of internal resources and space for the hardware, in general, if the rate of return on investment satisfies some baseline metric (a two-year payback, for example) and the improvement provides a solution to a problem, the project has a good chance to be approved.
Not All Processes Are Created Equal
At Laporte Consultants, we have worked on thousands of projects in the pharmaceutical, life-sciences, and food & beverage industries. We see projects where systems manage complex chemical reactions to tight tolerances and simple projects where bottles must be put into a carton.
Traditionally, automating an unsophisticated, repetitive, pick-and-place process didn’t make sense because of the cost. Robotic systems design and construction can be complex, with elaborate mechanical, electrical, and pneumatic components to be sourced, assembled, and maintained. The system’s programming and integration into the wider plant was laborious, difficult, and expensive. Preventative maintenance and repair may have required frequent visits by OEM, at the owner’s expense.
The business case was just too difficult to make. The return on investment just wasn’t there soon enough or at all. Even a relatively simple, straightforward process like picking a light-weight, small item and placing it into a container as it passes via conveyer would require high fixed costs in design, hardware, and programming.
Market Tailwinds Supporting Automation Solutions
Growing competition and investment in manufacturing technology has resulted in lower costs for end users implementing robotic systems. As the technology continues to advance, especially in the so called “Collaborative” subset of robotics, end users can now purchase a multiple-axis, articulating robotic for a hardware cost on the order of $25,00 to $50,000. Their programming, in some applications, can be completed in a half hour. Commissioning could last a day or less, minimizing the impact to always-busy plant schedules.
Costs of safety-guarding them is minimized or made obsolete; some collaborative robots will halt operating immediately when an undefined force is experienced, and they are generally operating at slower speeds than conventional robotics. Robots can store multiple programs, be installed on a cart, and powered by a nearby 120V receptacle. A single robot can be placed throughout the plant in different operating capacities. End effectors have advanced and they can handle a large variety of formats, changing their tools automatically, as necessary. Yearly operating costs are often many, many multiples less than the cost of traditional operator labor.
A Case for Automating “Simple” Processes
At Laporte, we find that our clients have numerous opportunities to improve their profitability by automating their repetitive, dangerous, and difficult manual processes. The economics may support a payback period of 1-2 years or even sooner when decreased labor costs, increased production rates, and the reduction of product waste are considered. Human operators are freed up to be transitioned to other locations where they can be more productive.
Recently, we’ve been working with a client to automate a pick-and-place process for many of the reasons described in this post. A robot will pick vials and literature booklets and place them into grooves on a custom tray. The automated system increases throughput by 321% and will free up resources to help in other areas.
Nate Kocher, Automation Engineer – Laporte’s Philadelphia office