Cost Estimating – Rules of Thumb
The age old question…"So how much is an AGV or AGC system?"
First, answer this…
We encourage you to call 2 or 3 member companies listed on the right, provide some basic information. A helpful slide deck to what you should know can be found here:
How to proceed with AGVs?. Any of the member companies will all be able to provide very rough budgetary estimates to begin your automation journey.
Once you have budgetary estimates and are looking to gain approval from executives we encourage you to review this slide deck presented at a recent Modex Educational Seminar:
Payback is a Dirty Word, But it Doesn't Have To Be. How to Accurately and Properly Justify AGV's and AGC's. Automated Guided Vehicles or Carts can save your company in countless ways but only if you can get by the finance department! We share some great techniques and, in a comical way, things you should avoid!
But before you begin, we would like to share 4 things you should know when investigating AGV/AGC systems.
- AGV/AGC solutions can vary greatly in complexity
Cost is directly correlated to the complexity of a system and ranges from simple horizontal load movement to storage at various heights and even inventory tracking and management.
For simplicity sake you might consolidate all AGVs/AGCs into the following groups:
- Level 1: Simple
Manual Vehicle Dispatch, Load/Unload, No Central Controller, Minimal (or no) traffic control, No Host Interface.
- Level 2: Medium
Automatic Vehicle Dispatch, Load/Unload, Central Controller, Product Tracking, Multiple Path Options.
- Level 3: More
Automatic Vehicle Dispatch, Load/Unload, automatic coupling/uncoupling (applies to tuggers only), Central Controller, Complex Host Interface, Ethernet Link, Product Tracking, Multiple Path Options Multiple Transfer Heights, etc.
- There can be several solutions to a materials movement challenge
While your challenge may be moving a pallet from point A to point B today, in the near future you may want to stack or even store pallets in racking. Horizontal transport solutions are the lowest cost, easiest systems to install and manage.
- More complex system ROIs are best realized when you currently operate at least 2 or more shifts
In a capital purchase situation there is significant cost up front to design and install AGV/AGC systems. With industry standards for ROI at 24-30 months, we have found collectively that as a rule of thumb you need to be currently operating 2 shifts.
- Leasing can be an attractive alternative
Move your costs off the balance sheet and into you P&L through leasing. You can realize cost savings much quicker and in many cases the approval process is easier to navigate.
- Consider all soft costs in your ROI calculations
ROI isn’t just cost of the new "solution A" vs "status-quo." Make sure you Status-quo includes profit damaging costs such as facility damage and repair, vehicle damage, product loss, shrinkage and inefficiencies in throughput as a result of your labor force. These areas can significantly change your overall ROI when investigating automation.