In today’s manufacturing landscape, where skilled labor is scarce and productivity pressures are high, many business leaders recognize the value of automation… but hesitate to take the first step.
A question often comes up:
“Is now really the right time to invest?”
What most companies fail to consider is the opportunity cost of not automating.
In other words: how much money and efficiency are you losing every month by maintaining the status quo?
What Does “Opportunity Cost” Mean in Robotics?
Opportunity cost represents the value of the benefits you give up when you choose not to take action.
In manufacturing terms, this translates into:
- Lost productivity (fewer units produced)
- Unrealized labor savings
- Delayed quality improvements
- And sometimes even missed market opportunities
Waiting to automate doesn’t just postpone a project—it means losing measurable profitability every day.
A Concrete Example: Robotic Welding Cell
Let’s take a common situation seen in many manufacturing plants: a manual welding station that could easily be automated.
Current scenario (manual)
- 2 full-time welders
- Loaded wage: $35/hour ≈ $70,000/year per employee
- Total labor cost: $140,000/year
- Productivity: 100 units per week
- Scrap rate: 5%
- Production time limited to 40 hours/week (human shifts)
Automated scenario
- Investment: $250,000
- Depreciation or financing: approx. $50,000/year over 5 years
- Labor: 1 welder becomes operator-supervisor ≈ $70,000/year
- Productivity: 180 units/week
- Taux de rebut : 1 %
- Scrap rate: 1%
- Can run extended or overnight shifts
Calculating the Opportunity Cost: Waiting 3 Years to Automate
| Category | Annual gain | 3-year total |
|---|---|---|
| Labor |
$70,000 | $210,000 |
| Productivity |
$200,000 | $600,000 |
| Quality (scrap) |
$8,000 | $24,000 |
| Total opportunity cost |
$834,000 |
Waiting three years to automate costs $834,000 in missed gains. That’s more than three times the robot’s initial price tag.
Why This Perspective Changes Everything
When companies view automation as an expense, they tend to hesitate. But when they start seeing it as a delayed investment, the logic flips: Every month of waiting becomes a measurable financial loss.
Evaluating the opportunity cost helps:- Make investment decisions based on hard data;
- Build a solid business case for automation projects;
- Prioritize initiatives with the highest ROI.
In today’s competitive market, waiting is no longer neutral. The status quo has a cost, and in many cases, it’s much higher than the automation project itself. At Revtech Systems, we help Quebec manufacturers quantify the potential gains of robotic projects and build a clear, profitable roadmap toward automation.
FAQs
- How can I estimate the opportunity cost for my business?
Compare your current productivity, labor costs, and scrap rates with a realistic automated scenario. Our experts can help you create a personalized analysis. - Does opportunity cost apply to smaller automation projects too?
Absolutely. Even a simple CNC tending robot can generate significant savings by freeing an operator and eliminating downtime between cycles. - What if I’m not ready to invest right now?
Start planning. A robotic audit or feasibility study can help identify your highest-impact projects and prepare your business to take advantage of funding programs when you’re ready.