Method for assessing the total cost of ownership of industrial robots

With the launch of Industry 4.0, automation has increasingly been put into focus as one of the key factors for future production. The introduction of industrial robots is widely seen as an effective strategy against rising competition and outsourcing to low-cost countries. The investment into industrial robot cells is often based on the initial offering and its pay-off time. However, procurement decisions based only on the initial price are often poor decisions since they do not consider hidden cost factors such as maintenance or energy consumption. Evaluating the total cost of ownership (TCO) of industrial robots is a far better alternative to calculate all costs involved during their company ownership. Thus far, only a few models concerning TCO or similar cost analysis techniques for industrial robots have been published and empirical studies of the economic aspects of robotic implementation are scarce. The key contribution of this paper is the development of a conceptual model for TCO calculation of industrial robots, which can be used during the decision making process. The developed model was tested in two case studies, one for material handling robots and one for arc welding. The goal was to identify the most crucial factors allowing an easily estimated calculation of the TCO based on the net present value. As most contributing factors, operators' wages, spare parts and energy consumption are identified. However, this paper also shows that retrieving necessary data from companies turned out to be complicated, because of the low awareness of these companies' expenditures for the costs generated by their automation equipment. In accordance with the results, both, a simple template was created in order to support the people involved in the decision making process with additional investment information and crucial factors are pointed out for measuring and evaluation in of future digitalized robot systems. (C) 2016 The Authors. Published by Elsevier B.V.