Automation is exploding across the manufacturing world, but the real differentiator isn't the robot, pallet pool, or software you buy—it's whether you know how to calculate ROI the right way. In this episode of Lights Out, we break down the financial side of automation in plain language so every shop owner, operator, and leader can make smarter investment decisions with confidence.
This is the follow-up to our baseline episode, where we had listeners identify their current spindle utilization, setup times, labor load, and cost per part. Now we take the next step: turning those numbers into an ROI model that actually reflects how automation performs on the shop floor. Instead of guesswork, gut instinct, or "we tried that once," we show you how to quantify annual savings, increased capacity, reduced scrap, payback period, and more.
We simplify the math in a way that works for high-mix job shops, multi-shift production cells, and every workflow in between. Whether you're evaluating a robotic tending system, a pallet pool, high-density workholding, or a Cobot, understanding the financial impact of your decision is the foundation for long-term, scalable automation success.
With real scenarios, honest discussion, and a few holiday-season laughs (including Nick's mysterious disappearance), this episode gives you the practical tools you need to approach automation with clarity—not confusion. If you want to make 2026 your most efficient year yet, start by calculating ROI the right way
Simple version:
ROI (%) = (Annual Savings – Annual Costs) ÷ Investment × 100
Expanded version for manufacturing:
ROI = [(Labor Savings + Increased Machine Utilization + Scrap Reduction + Overtime Avoided) – Maintenance & Depreciation] ÷ Capital Cost
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