Guidelines for accurate budgeting for industrial robot systems

ISSN: 0143-991x

Article publication date: 12 January 2010

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(2010), "Guidelines for accurate budgeting for industrial robot systems", Industrial Robot, Vol. 37 No. 1. https://doi.org/10.1108/ir.2010.04937aaa.002

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Emerald Group Publishing Limited

Guidelines for accurate budgeting for industrial robot systems

Article Type: Viewpoint From: Industrial Robot: An International Journal, Volume 37, Issue 1

Keywords: Robotics, Budgetary control

In my last Viewpoint article, I briefly touched on the importance of preparing an accurate and comprehensive budget that goes beyond just the cost of the robot. Your budget must consider a total systems approach and must be all-inclusive. Remember that once you get your budget approved by upper management, the chances of requesting additional funds for something you overlooked is remote, if not impossible. That is why my guidelines for accurate budgeting can be a very valuable tool you can use “right out of the box.”

While a stand-alone six-axes industrial robot might cost somewhere in the neighborhood of $80,000 and can probably be justified on a two-year or less payback, the real “sticker shock” sets in when companies discover that it will cost them perhaps an additional $200,000 for fully implement it in production. Why the additional costs? Very simple, a stand-alone is just that, a stand-alone piece of equipment. However, to realize the cost effective benefits of that robot in the real world of production, you must look at it in terms of total system cost to implement.

Over the years, various studies have concluded that an industrial robot represents around 25 percent of the total cost of implementation. Figure 1 shows where all the costs can be attributed.

Each and every one of these elements have a specific cost associated with them depending on the complexity of the particular application and should be looked upon as general “rules of thumb” keeping in mind that for every robotic application some of these cost element can and will vary. The key word to keep in mind is complexity. The more complex your application the greater the costs will be.

Over the years, I have seen many companies develop systems that were so complex that they were forced to design machine intelligence into them. Later, they discovered that the investment never justified the payback leaving them with a very expensive “white elephant” on their factory floor. If you ever find yourself in a situation where your potential application requires so much machine and system intelligence that you need to go it debt for it, consider delegating that application to human beings with built-in intelligence and real-time brain functions.

Both in the past and today, people do an excellent job when manufacturing processes experience variations. People can adapt to them in real time. Industrial robots do not come with those capabilities. They perform extremely well in those applications where parts are consistently oriented and where process variations do not occur. Remember, a robot will only do what is it is been programmed to do. Sure, you can build intelligence into your system, but at what cost?

Table I provides a real-world example from a major aerospace company showing how a $100,000 robot can end up costing $400,000.

Sticker shock, you bet. However, this aerospace company who builds military aircraft knew up front what they were attempting to do with a robot would be expense. They actually were awarded $600,000 by the government for the project. By working together, we were able to reduce the system cost to $400,000. This was done through concurrent engineering and cost sharing in the areas of systems engineers, tooling design and development, and application software development. In the end, the company was credited with a $200,000 cost avoidance for the project by the government.

Not all complex robot applications have happy endings like this one. Many end up with significant project cost overruns or not working at all. I might point out that there are government programs where they want someone to take a chance on trying something that has never been tried before. If the project fails, there was still the benefit of all the knowledge gained from the effort. Just take a look at space programs. How many costly failed rocket launches did it take until space agencies around the world finally got it right? The same holds true with pharmaceutical companies who spend billions of dollars trying to develop new breakthroughs with drugs. Not all efforts are successful, but the knowledge gained is priceless.

Whether your potential robot application is fairly straightforward or highly complex, there is a way to ensure that you adequately budget for it.

The guidelines I am about to present will give you a very helpful tool to ensure you covered all the bases in preparing your budget. On Worksheet no. 1, I purposely broke out various elements of the robot itself for a very good reason. There are many companies, especially government agencies that are required to solicit multiple bids and award the contract to the lowest bidder. Many companies and agencies use the robot itself as the baseline for cost. To ensure they stand a chance of being the low bidder, many robot companies will quote the robot itself at one price and quote the rest of the elements it takes to operate and program the robot as optional accessories. In some instances, this has included the robot's wrist being quoted as optional tooling. You need to be aware of these things. That is why I am providing the following guidelines for accurate budgeting.

Worksheet no. 1

Equipment

Robot supplier ______ Model no. ______ $________

Is robot power unit included in robot price? Yes ___ No ___

If no: robot power unit $ ________

Is robot controller included in robot price? Yes ___ No ___

If no: robot controller $________

Is teach pendant included in robot price? Yes ___ No ___

If no: teach pendant $ ________

Is the wrist included in robot price? Yes ___ No ___

If no: robot wrist $ ________

Are I/O ports included in robot price? Yes ___ No ___

If no: (no. of inputs ___ no. of outputs ___ $ ________

Subtotal $ ________

Figure 1 Total robot system cost elements

Table I

Worksheet no. 2

Controls

Additional memory capacity $ ________

(specific type of memory capacity: ___________

Off-line programming capability $ ________

Are software, keyboard, CRT and printer included? Yes ___ No ___

If no: software $ ________

Keyboard $ ________

CRT $ ________

Printer $ ________

Additional I/O ports

(no. of inputs ___ no. of outputs ___ $ ________

Custom application software $ ________

Host computer interface (RS232 __ RS422 __) $ ________

Additional axes $ ________

(servo-controlled/programmable)

PLC for system interfacing (type _____) $ ________

Subtotal $ ________

Worksheet no. 3

Accessories

Is battery backup included in robot price? Yes ___ No ___

If no: battery backup $ ________

Is uninterruptable power supply included

in robot price? Yes ___ No ___

If no: uninterruptable power supply $ ________

Is special transformer required for

robot controller (50 Hz vs 60 Hz)? Yes ___ No ___

If yes: special transformer $ ________

Robot calibration fixture (if desired) $ ________

End-of-arm tooling (design and build) $ ________

Robot transport axis

(Indexing __ Programmable __) $ ________

Non-standard interconnecting cables $ ________

Miscellaneous/other _____________________ $ ________

Subtotal $ ________

Worksheet no. 4

Documentation

Layout drawings $ ________

Installation drawings $ ________

End-of-arm tooling drawings $ ________

Operating manual $ ________

Programming manual $ ________

Maintenance manual $ ________

Troubleshooting manual $ ________

Electrical/electronic drawings (robot system) $ ________

Mechanical drawings (robot system) $ ________

Software $ ________

Spare parts list(s) $ ________

Subtotal $ ________

Worksheet no. 5

Training

Operator