Using Welding Automation to Improve Return on Investment (ROI)

Compared to traditional manual welding, automated welding can improve weld quality, streamline your production processes, protect the safety of your workers, and boost your long-term profitability. At Gullco International, we develop custom welding automation systems built for unique workflows and business needs. Use this guide to decide if your facility is ready for welding automation.

How to Know When It’s Time to Move to an Automated System

Weigh these factors to determine if your facility is ready to ramp up with automated welding systems.

Increased Production Demands

If your business is growing and demand is outstretching the capacity of your manual processes, automation will allow your business to continue scaling sustainably. You can produce more without having to hire additional manual welders or outsource work.

Labor Shortages

There is a severe shortage of skilled welders. There may not be enough in your area, or they may command higher salaries than you can afford. With automation, you can let your existing workforce focus on overseeing tasks or handling more critical and creative projects.

Repetitive Tasks

Automated and semi-automated welding systems can easily handle repetitive tasks. They don’t get tired or need breaks, so you can maintain continuous production and stringent quality control.

Safety Concerns

Welding always presents some risk of danger or injury, even with experienced staff. By automating welding tasks, you can protect your workers from potential injuries and exposure to toxic welding fumes.

Consistency

Human error can decrease consistency and quality control, but welding automation systems perform precision work that won’t vary over the course of a project or successive orders.

Choosing the Right Automation Equipment

Getting the highest possible return on investment (ROI) for your welding automation system relies on choosing the right setup based on your company’s current and future needs. Consider these factors when selecting your automated system:

• Application: First, determine which materials you most frequently weld. Then, consider what type of welding you need, such as arc welding or spot welding.
• Budget: Welding automation systems range in price. Determine both your upfront budget and the budget you can allocate to maintenance throughout the years.
• Floor Space: Welding automation solutions also have various footprints. You can choose compact systems or larger, multi-stage systems based on your available space and workflow.
• Scalability: If you plan to grow or adjust your operations in the future, invest in a more modular system that will be easy to change over time.

Calculating Your ROI

Follow these steps to calculate your ROI:

• Identify Costs to Automate: Calculate the cost of your manual systems, including training, equipment acquisition, installation, and maintenance.
• Estimate Labor Savings: Determine your current labor costs and how automation will offset them.
• Project Production Increase: Automation systems should also increase your ability to fulfill more orders. Forecast your increased production and anticipated revenue.
• Factor in Improved Quality: Calculate how much your company currently spends on material waste, labor to redo work, and other costs due to errors.

When Can You Expect a Return?

You can calculate your ROI as a percentage or as a break-even point. For many organizations, automated welding systems break even or demonstrate significant ROI within two years. However, every organization is different, and you might see significant savings or increased revenue more quickly. Perform the following calculations to approximate when you can expect a return.

Calculate Initial Investment

As you’re comparing potential automation solutions, calculate the initial cost of each one, as well as the cost of training, installation, and any modifications.

Estimate Labor Cost Savings

Add together the total wages, benefits, administrative costs, and overtime costs of your manual welding workforce. Compare this to the cost of operating the automated welding system.

Evaluate Increased Productivity

Automation can increase your facility’s overall productivity through faster unit completion, more uptime, and reduced errors. Create detailed forecasts for anticipated productivity based on demand.

Factor in Quality Improvements

Welding automation tools can produce more consistent and failproof welds. Along with the direct savings in material waste and time, you can see increased profits due to enhanced customer satisfaction and lower warranty costs.

Consider Material Savings

Fewer errors and more efficiency mean less material waste. As a result, the cost per unit of production will go down for both your facility and your customers.

Assess Maintenance Costs

In addition to the initial purchase cost, welding automation systems will require ongoing maintenance and repairs. Compare these maintenance costs to the cost of maintaining your current manual welding equipment.

Determine Payback Period

Once you have all of these calculations and comparisons, divide the initial investment in the automated system by the annual savings. This will determine your break-even point, or the point at which the savings and increased revenue have essentially paid for the automation system.

Gullco Case Studies: Real-World Examples of Success

At Gullco International, we help organizations across dozens of industrial niches automate their welding systems to increase safety, productivity, and profits. Examples of past success stories include:

• An agricultural manufacturing company that saw 40% more production with a 25% reduction in labor expenses after implementing an automated welding system.
• A heavy machinery fabricator that boosted weld quality and reduced errors and costly rework by implementing a robotic welding cell.

Welding Automation Solutions From Gullco International

Is an automated welding solution the right next step for your business? Contact Gullco today to learn more about our robotic welding solutions and how you can implement the right one to increase your company’s productivity. Request a quote to start calculating your potential ROI.