One of the most important aspects of evaluating a new technology and considering the cost of adoption is to determine if the merits or benefits of the innovation outweigh the risk / cost / upheaval in introducing a new technological innovation to your operations.
Assuming that the reader is aware of what TELIA, our automation and optimization solution for your material handling and storage areas of your facility, the following is a fairly comprehensive list of the tangible and intangible benefits that our customers have developed their return on investment on.
Importantly, these are the benefits which are communicated to all stakeholders involved in the transition to the new technology, as these are the compelling reasons for an automation project and therefore provides the motivation for change.
While from a cost perspective safety is not an easy benefit from which to calculate ROI, it remains the number one benefit of a TELIA automation solution. TELIA is designed to move, store and retrieve heavy materials such as steel coils, pipe and tube, steel sheets, etc. from densely packed storage fields and areas. These heavily condensed areas are far from ideal for operator access and safety.
TELIA removes the operators from these areas resulting in a significant improvement for the well-being of your employees. LTI statistics and associated costs can obviously form an essential part of your ROI calculation, but the toll of this aspect is much more than the dollars and cents.
“The best part of the TELIA installation, is that I don’t have to go in there anymore”
One of the easiest to see and most tangible ROI on any automation project is a reduction in labor costs. Although, this can be one of the most contentious issues for an automation project.
With that said, crane operators and material handling operators are typically entry level positions at materials handling facilities where TELIA is applied. Positions that experience high turnover and constantly increasing difficulty to find quality people to fill them. Ideally these positions are replaced with automation, and retraining is available to transfer existing operators to value-added positions with higher reward at a given facility, such as line operators.
Some of the more indirect impacts of a TELIA solution or automation project are around the costs of labor acquisition, specifically: recruitment, training and administration costs of finding and keeping operators.
Then there is the issue regarding maintaining sufficient operators to cover the various shifts and keep operations going under absenteeism; an issue which has been a significant problem in the last year on an account of due to COVID.
Likewise, lost operations during lunches, breaks, etc. all contribute to downtime on your value-added operations, or is covered by other operators and therefore contributes to additional staffing and cost.
Automation in your material handling and storage areas ensures that your processing lines are always full and ready to go, that trucks are turned around quickly and efficiently, consistently over and over again.
Many of our clients take advantage of swings in commodity pricing to make bulk buys, or during slow downs end up carrying more inventory. Excess inventory can create additional costs around 3rd party storage and the associated storage and logistics costs in moving it back and forth.
TELIA offers optimized storage through patented algorithms, as well as removal of the operator from the environment, minimizing the spacing requirements between rows normally required for the material handling equipment.
The opportunity to condense their storage offsets the need to utilize 3rd party storage and transportation, offering a significant reduction in day-to-day costs but still allowing participation in bulk buying.
Automation grants the ability to always keep working on the next priority task. TELIA can be configured for each facility, by site, or even by resource or bay, to know what the next priority task is.
TELIA offers jobs such as pre-digging and staging for production lines as well as shipping requirements ahead of time, allowing these tasks to be completed overnight or during the “off-shift”. In addition, all product is tracked with detailed x, y, z coordinates, so there is no reason to “search” or locate coils for line-up as there is comprehensive inventory tracking.
This combination of features results in two very important and tangible benefits: the ability to increase the overall productivity of your value-added processes, as well as move more product through your facility.
Decreased Demurrage / Truck Waiting
Are you experiencing challenges turning around trucks or getting truck drivers to pick up your orders due to poor turnaround times?
TELIA will pre-stage product right next to the truck lane prior to truck arrival, ensuring quick and efficient turnaround. The resulting improvement in throughput or processing is a clear and tangible benefit to a TELIA installation. Consistent decrease in costs associated with loading times and also reduction in associated demurrage for waiting rail, truck, or other types of shipments, will compound over the life of the TELIA installation, benefiting your bottom line.
TELIA is designed to perform the same moves over, and over again, consistently with smooth speed curves to ensure that your product is moved, stored, and placed with care and precision every time. Unlike humans, automation always comes to work, is never tired, distracted, sick, or stressed about factors outside of work.
This consistency and care results in a reduction in material damage within the automation space. TELIA has refined speed curves and PLC logic over many years of experience and with many different types and sizes of product being moved to ensure that your product, even automotive exposed product, is stored and stacked with care and precision.
Likewise, this consistency and care results in less wear and tear on the equipment resulting in a reduction in maintenance for the various cranes, transfer cars, conveyors etc. under TELIA’s control.
Typical crane installations see a reduction by approximately 50% of the maintenance costs per annum. Reporting on the number of lifts and cycles completed offers the opportunity to move towards a more predictable a cycle-based maintenance program based on need.
TELIA automation doesn’t require heating and lighting. Depending upon the location and size of the area being converted to an automation environment there is the possibility to not heat or light the area resulting in significant savings in utilities.
Minimize Material Handling Equipment and Costs
The denser the storage space is, the more clients will resort to other material handling devices to augment the crane to be able to move product into overflow areas, staging, outside etc.
These additional non-value-added moves require additional equipment, additional operators, additional fuel and maintenance costs, and introduce further safety concerns in an already unsafe area.
The introduction of TELIA optimized storage offers a 30-50% increase in storage density, all serviced by the overhead crane, reducing the need for additional equipment, moves, personnel, risk, and associated costs.
One-Time Building Cost Offsets / Repurpose Storage
One of the largest and compelling ROI drivers for some of our clients is integrating TELIA into their considerations of a Greenfield site or a building expansion.
If the building can be designed with TELIA automation in mind, there is an opportunity to significantly reduce the overall building size and therefore costs. TELIA Automation’s increase of storage density allows for future buildings to be 30-50% smaller, without reducing storage capacity targets.
Similarly, if considering a building expansion, opportunity to condense the non-value areas of your facility to increase areas which can be used for other value-added functions exists with TELIA Automation. This applies even when retrofitting an existing facility with no plans to expand.
With a 30-50% increase in space savings, consider alternatives with this space: maintain as storage, improve your ability to bulk buy during advantageous commodity cycles, or utilize the space for other value-added opportunities.
Or simply realize the ROI benefit of a 35-50% increase of storage capacity over non-TELIA automated systems in your current building, expansion, or future facility plans.
Finally, inventory audits are typically a painstaking manual process which takes up several days of key resources time in order to take a complete inventory.
TELIA inventory tracking provides complete knowledge of all inventory, and their locations, at all times.
An inventory audit can be completed by a random confirmation of a small subset of the total inventory. Once the random checks are complete and confirmed, it is surmised that the remainder of the inventory is in place, reducing the audit to mere hours.
What is the cost of not adopting new technologies?
Whether you are looking to stay ahead of your competition, or your competitors are strengthening their supply chains, introducing automation, and looking to drive down costs the question we must ask is:
What is the cost of not keeping up?
This is a hard one to answer but the implications can be significant. It is important to come back to our first point in the tangible benefits: Safety.
It cannot be understated the underpinning responsibility we all have to safety and improving the quality of the environment we ask our operators to work in. TELIA provides an opportunity to work with sophisticated systems in a safe and secure manner. We offer safety in the design, in the equipment, during installation and most importantly on-going afterwards.
While every company will tackle ROI differently, we hope this list offers several reasons and benefits to considering an automation project.
Regardless of the automation project being considered it is important to ensure that the ROI is compelling and that it is the benefits not the technology which drives the motivation to change. This is a key success factor in ensuring a successful automation project with a smooth transition and high levels of adoption.
To learn more about TELIA visit https://carego.com
CareGo uses its patented material handing technology to change the world of logistics and supply chain management in the metals and heavy goods sectors all around the globe, continuing to help usher companies into the technological world of tomorrow.
By utilizing CareGo’s TELIA Software, Companies can utilize a full state of the art suite of supply chain management application software that uses dynamic decision-making algorithms. By creating these solution services CareGo is changing the way our clients store, handle and ship their raw materials, work in process as well as their finished goods.