Robots are too expensive—or are they?

Although many companies have recognized the potential of robots and automation, unfortunately many—especially small and medium-sized businesses—are still holding back. But why? One reason may be that they still believe investing in robots would be too expensive.

The History of the Washing Machine

By comparison, it took about 100 years from the invention of the dishwasher until it became widely adopted in the 1950s. The reason for the slow adoption was, of course, that it was initially far too expensive and not particularly user-friendly. But decades of improvements increased its popularity and lowered the price, so that the machine is now close to being a household staple.

Robots are now roughly where dishwashers were in the 1950s.

It is already possible to buy a robot at a relatively low cost. This is partly due to developments in the industry, where robotics companies have challenged the status quo of heavy, inflexible, and expensive robots and developed far more flexible, user-friendly—and cheaper—alternatives.

Everything is relative

But of course, it’s not just the cost of the robot itself that needs to be taken into account when a company wants to automate its production. In fact, the process can be roughly divided into three phases:

Phase One

Clarification and analysis—the requirements are specified, and it is assumed that production has already been optimized so that, for example, the location of any bottlenecks is known.

Phase Two

Procurement - this is where various bids are solicited and reviewed.

Phase Three

Installation - The robot is installed and commissioned, and production returns to 100 percent capacity.

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If an automation solution turns out to be too expensive, it’s probably more a matter of the business case being flawed from the start. After all, there are often more benefits to automation than just saving on labor costs. These can range from improved product quality to faster delivery. At the same time, there will often be an improvement in the work environment, which in turn will lead to lower absenteeism due to illness and fewer workplace injuries

Mikkel Bjerregaard, Chief Strategy Officer at Gibotech

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Time is money

Although robots have become more affordable, the time required for implementation can still be a major obstacle for many companies. They simply struggle to see how they can find the time to implement these changes in production, as it will require temporary production stoppages and employee training.

Cheaper robots

Although robots have become more affordable, the time required for implementation can still be a major obstacle for many companies. They simply struggle to see how they can find the time to implement these changes in production, as it will require temporary production stoppages and employee training.

Increased productivity

However, according to an IDA study, companies can increase productivity by 18 percent if they implement automation measures that are profitable with a payback period of less than two years. And if the payback period is extended to five years, productivity could be increased by as much as 24 percent.

The total price

If you take all three phases of an automation process into account, the cost of the robot will actually account for less than 50 percent of the total project cost.