Tips To Calculate The ROI of Your First Welding Cobot

What is the true value of adding a welding collaborative robot (cobot) to your workflow? And if you do invest in one, when will you get your investment back?

To answer these two important questions, most people calculate the Return on Investment (ROI). But before we determine the ROI, we need to determine how much the cobot ACTUALLY costs.

Table of Contents

(Click on a title to jump to the section!)

• Return-On-Investment Analysis
• Welding Cobot System Costs
• Variables to Keep in Mind
• The Intangibles
• Return on Investment Calculation
• The Best Tip for Calculating ROI for Cobots
  
  

A welding cobot system can cost anywhere from $80,000 USD to $150,000+ USD, depending on the equipment, the task to be automated, and the installation time involved.

With these figures in mind and the information we will discuss, you can begin to assess how soon the cobot will start paying for itself and contributing to your bottom line.

Return-On-Investment Analysis

ROI is a crucial metric that helps you determine the benefits you'll receive from your investment, helping you decide whether it's worthwhile.

To calculate ROI, many businesses use the payback method, which involves dividing the cobot welder cost by the salaries of the welders.

However, for a more accurate estimate, we recommend that you consider the intangible benefits your company will gain in the long term. These benefits, although not always easily quantifiable, are essential as they add significant value to your company.

In your calculations, make sure to include factors such as increased production, improved quality, reduced labor costs, and decreased downtime. These elements will help you gain a comprehensive view of the financial impact and timeline for your investment to pay off.

Let’s begin our ROI assessment by considering the total cost of the cobot system, then we will go on to explain the intangible benefits to consider.

Welding Cobot System Costs

Take into account the total cost of the robot welding system. A typical cobot package includes:

• Collaborative robot arm
• Controller, which is included with the robot arm
• Welding power supply
• Welding torch
• Wire feeder
• Welding table suitable for jigs and fixtures

For the collaborative robot cell to be complete, you need more than just the robot. The cobot itself usually costs only a third of the entire system.

The common setup includes the welding jig and fixtures. This equipment is needed to present the parts to the robot repeatably.

You may also have to consider the cost of engineering, programming, and installation.

Some collaborative robots like the Cobot Welder from Hirebotics are easy to use and don’t require programming knowledge. Your skilled welders can program and set up the cobot, saving you time and money.

To get a reasonable estimate for the total cost of an automated cobot welding package, triple the cost of the welding cobot that you select.  

For example, using the figures from the example above, if you choose a cobot that is $80,000, you can expect to pay $240,000 for the complete setup.

Variables to Keep in Mind

When considering the addition of a cobot to your workflow, it's important to evaluate several critical variables that will impact the return on investment. These include working shifts, labor cost savings, and training. 

1. Working Shifts

Take into account how often and for how long the robot will work. When you calculate the robot working shifts, multiply the number of hours per shift by the number of shifts in a day. Then calculate how many days in a week and how many weeks in a year the cobot will run.

With a fully functioning robotic welding cell, you’ll be able to produce weld parts lights-out without the added overtime costs!

Whether it's for a couple of hours after the working day is done or for a full night shift of production, the productivity gains will have a big impact on your ROI!

2. Labor Cost Savings

The first variable that is usually considered when calculating the ROI is the labor cost savings. You’ll see later on that there is much more to consider than just this. But in saying that, this cost-savings remains an important part of the ROI.

To get that number, you need to consider the annual labor cost for a worker that the welding cobot will supplement. This number should include the salary, insurance, and any other benefits.

3. Training

Although cobots are user-friendly, they still require some training to operate and program. The training process for cobots is designed to be straightforward so that you don’t lose too much time out of production.

Once trained, your robotic welder operators can then share their knowledge with other team members, spreading expertise throughout the workforce.

This approach accelerates the integration of cobots into production and builds a knowledgeable team capable of maintaining high operational standards.

A well-trained team can adapt more quickly to new tasks and changes. By implementing this approach, your cobot will continue to contribute to your company's outputs, maximizing your return on investment.

The Intangibles

Intangibles are benefits that you get from automation but don’t have a hard monetary value. These benefits can have a big impact on your ROI. Let’s take a look at some of them.

Production Stability

A collaborative robot delivers consistent quality with each weld. This kind of precision maximizes your raw materials, saving you costs.

Cobots don’t tire and can be easily programmed to shift from one task to another on the factory floor. So you always have a ready-to-weld system for your production needs.

Employee Safety

Manual welders can suffer from work-related problems. This can range from minor lung irritation to life-threatening lung cancer.

Automating welding processes with collaborative robots can help decrease your welders’ exposure to toxic fumes. This change leads to improved health for your workers, ultimately reducing social, medical, and insurance expenses for your company.

Improved Efficiency

Cobots can take on the monotonous manual welding tasks and free up your experienced welders for more complicated welding tasks.

This translates to better efficiency and better value for your business with the same amount of workers.

More Return Clients and New Business

Cobots contribute to faster delivery times and consistently high-quality welds, allowing your business to handle more orders efficiently. This increased capacity can attract new clients looking for reliable service providers.

For example, the Beacon App offers real-time weld times. The app gives you a precise number to calculate an accurate lead time to better quote your clients. Remember that satisfied customers come back and bring in more business.

Adopting technology like cobots can make your workplace appealing to the new generation of workers. Young professionals, especially those with technical skills, often seek out environments where they can work with advanced technology. This will attract talented welders who are eager to use innovative tools, boosting your team’s capabilities and overall productivity.

Return on Investment Calculation

By using those previous variables and intangibles, you’ll be able to calculate the payback period, the labor and productivity savings.

Payback period = Total Costs / Total Savings per year

Calculating your ROI is an important step in determining if a cobot is right for you. With this easy formula, you should be able to determine your ROI in one easy calculation. If you don’t want to calculate it manually, there are a lot of ROI calculators online that will do the job for you.

The Best Tip for Calculating ROI for Cobots

When calculating the ROI for your cobot, it's essential to consider the direct costs and savings but also the intangible benefits. These might be less obvious, but they significantly enhance the overall value of your investment.

By including both the tangible and intangible factors, you'll develop a clear and comprehensive view of the cobot's ROI, helping you understand the true impact of your investment on your operations.

Still need help figuring out the ROI on a cobot welder? Schedule a demo call with our team!