Automation payback calculator
Before proposing an automation project, every company asks the same question: how long until it pays for itself? This calculator gives the payback period of an investment and the cumulative result over several years. It is useful for running honest numbers before presenting a proposal, or for judging whether a proposal you have been given makes sense. Use any currency: the result comes out in the same one.
How it is calculated
payback period = total investment / (annual saving − new annual costs)
The cumulative result after N years is the net saving over those years minus the investment. It is a simple calculation, with no interest or inflation, good enough for a first decision.
What to put in each field
- Total investment: not just the machine. Engineering, installation, safety guarding, programming, commissioning, training and the production lost while it is installed.
- Gross saving: labour hours at their full cost to the company, scrap avoided, extra capacity only if there is demand for it, injuries and sick leave avoided.
- New costs: maintenance, spare parts, consumables, extra energy, software licences.
Example
A 120,000 palletising cell that saves 66,000 a year and adds 6,000 of maintenance: a net saving of 60,000 a year, payback in 2 years and, after 5 years, a cumulative result of +180,000.
Industrial companies often aim to recover this kind of investment in two or three years, although each one has its own criteria.