An Automated Palletiser Example
When small and medium manufacturers think about automation, the first question is often: “Will it pay back?” The good news is that with the right framework and the right project, you can quantify the benefits and build confidence in your investment.
And if you’re looking for one of the safest bets, palletising consistently delivers strong ROI for SMEs. Why? Because the end of the line is always busy. Every product, regardless of volume, has to be packed and shipped. While an individual product or SKU might not justify automation on its own, the palletising step handles everything that flows through the factory. That makes it one of the few areas where you can capture savings across the board, even if no single product family hits the scale required for a fast payback on its own.
Define the Automation Scope
Start by mapping the process to automate. If we use palletising as a candidate and document the current costs:
- Labour hours spent stacking the pallets
- Downtime or waiting for pallets to be cleared
- Scrap from mis-stacked or damaged boxes
- Ergonomic or safety risks driving higher insurance premiums
Then outline the future state; in our case, it will be with an automated palletiser (also known as a cobot palletiser or palletising robot). This scoping is key to developing the right solution. Your throughput, floorspace, and worker interactions will all help define whether you have a fully enclosed industrial robot palletiser or a small-footprint cobot palletiser. Also, identifying the higher-value tasks which your staff will be trained on is key.
Calculate Total Automation Project Costs
Every automation project, including robotic palletisers, has several cost components:
- Capital costs: robot/cobot, end-of-arm tooling, safety systems
- Integration costs: development, programming, training, commissioning
- Ongoing costs: maintenance, consumables, software licences
- Financing costs: leasing or interest payments
Together, these make up your Total Investment.
Quantify Savings and Gains
This is often the hardest part of any ROI calculation.
Factories often use the current task time minus the new task time multiplied by the average labour rate. This is not a great way to calculate “savings” for a couple of reasons:
- Most of the time, manufacturers are not actually looking to fire anyone. This means that the business has not actually “saved” any money. If it is someone they have invested in and trained, they have redeployed that worker to increase the factory’s overall capacity.
- The robot or automation doesn’t actually get paid! So using the average labour rate as a proxy for time is a crude method.
Even though automation is not usually about “savings”, if you really want to focus on that side of the equation, it is better to look at things like:
- Reduced scrap/damage – Automation brings increased quality, which means fewer returns, less rework and less wasted material. Palletising robots bring these same benefits, with packing patterns always adhered to, fewer boxes crushed
- Health & safety improvements – Especially in end-of-line tasks, where Health and Safety issues are rampant, automated palletisers can reduce back and lifting injuries, saving the company money on insurance premiums and absenteeism.
So, if it’s not about “savings”, what is it about?
Manufacturing Capacity increase and efficiency.
If before automating you could make 10,000 widgets a week and after you can make 11,000, you’ve got a 10% increase in revenue with almost the same amount of overhead. Your “gains” can now be looked at in terms of total extra product sold instead of seconds “saved”.
Palletising projects often shine on both sides.
With an automated palletising system (like a cobot palletiser or an industrial robot palletiser), the throughput of the rest of the line can be maximised, and labour efficiently deployed
- Direct labour savings – As palletising is considered unskilled, it is often filled with new (untrained) staff or temp workers. This means it is one of the areas where labour reduction can actually occur. Also,
- Throughput gains – Even though the per-pick rate can be similar to manual palletising (at least for a palletising cobot), the overall rate is higher as the robotic palletiser doesn’t take breaks or go on holiday or attend any meetings. So when an automated palletiser shortens changeovers and keeps lines flowing, you ship more units per shift.
Together, these add up to your Annual Savings & Gains.
ROI Metric
Finally, the part you’ve been waiting for!
With the costs, the savings and (most importantly) the gains mapped out, you can calculate:
Payback period:
Payback (years) = Total Investment ÷ Annual Savings & Gains
If you want to learn other ways to calculate ROI for automation projects, please read our two-part article, which looks at this in more detail. Click here for Part 1 – Calculating Automation ROI and here for Part 2 Calculating Automation ROI.
💡 Rule of thumb: Many UK businesses are looking for a payback period of 2-3 years. If capacity gains are used, this can be feasible. Specifically for SMEs looking for even faster payback, palletising projects often achieve payback in under 2 years and sometimes within 12 months!
The Bottom Line
For SMEs, an automated palletiser is one of the clearest automation wins. Because every product must be shipped, the end of line sees volumes that justify investment even when no single product family does. By applying a structured ROI framework: defining scope, identifying savings and quantifying gains, you can confidently demonstrate that palletising automation pays for itself quickly, while freeing staff to focus on higher-value work.
Start your Cobot Palletiser Journey
As the first step to introducing cobot palletisers to your factory floor, or for more information on the ROI that you can achieve in your factory, please drop us a line. You can also learn more about our own palletising cobot product range and request a quotation.
