Automation ROI and payback: a business case operations can verify
Separate installed cost, cash savings, released capacity and recurring expenses, then test a conservative scenario before approving automation.
Simple payback
Installed investment divided by positive annual net benefit in an undiscounted constant-benefit model.
Annual net benefit is gross realizable benefit less incremental recurring cost. Zero or negative net benefit has no finite simple payback. The model excludes discounting, taxes, financing, ramp-up and residual value, so it is a screening measure rather than complete investment approval. Try the automation ROI tool.
See also: Contribution per unit
Use the concept: Automation ROI & payback calculator · Cp, Cpk, Pp & Ppk calculator · Downtime cost calculator
In depth
Takt time vs cycle time vs lead time: calculate the right clock
A worked shift example separates customer pace, observed process speed and end-to-end delivery time, with practical checks before changing the line.
SMED changeover study: measure last good to first good
Use a time observation sheet to separate internal and external work, preserve safe setup steps, and verify a repeatable changeover improvement.