Tips on ROI for vision inspection
Most businesses are aware that automated vision inspection systems are more accurate than manual inspection. But what about ROI? Here are some rock-solid ways to calculate it and some tips to think about.
Investing in an automated vision inspection system will help make your packaging process leaner and more reliable; it also helps you harness a sustainable competitive advantage.
Manufacturers use vision systems for a range of tasks, from simple to advanced, whether it’s for tracking & counting, identification, inspection, validation, measurement or guidance.
But what about the return on investment (ROI) for your automated vision inspection system?
If you’ve had to do rework or just scrap products — so effectively begin again — due to a faulty product or part (no matter how small), then you’ll no doubt wish you’d been alerted to the error before the faulty item had gone further through your production line, with the subsequent “value adding” not adding value at all, rather just costing time and resources.
Inspection near the end of the line means catching faulty products before they leave your premises. That saves the hassle and cost of retailers rejecting your products, and also prevents any potential damage to the relationship. However, sometimes there’s increased value in having automated inspection further back along the line as well, inspecting individual parts before they are assembled together. This can even be the case when inspection is not being used to specifically sort items during the production process. By avoiding costly mistakes like this, you can create some pretty tangible cost efficiencies.
Rules of thumb
There are several rules of thumb that businesses can use as a quick guide to determine ROI. One is the “1/10/100 rule”. This is if you catch a fault in the processing line, it’ll only cost once the value of the item; if you catch it before it leaves the factory it’ll cost 10 times; and if it’s caught at the customer’s, then the cost is 100 times the value of the product. The latter is a variable figure though, depending upon your industry: if the wrong label is on pharmaceuticals, that’s a big cost, same as if allergens were not identified on the label, however if it’s a tin of peas labelled as beans, while wrong, it’s not life threatening.
Studies have shown that manually checking products is about 85% efficient — but that’s on slower production lines only, certainly not high-speed ones. The rule of thumb here is that there’s a 15% false-reject rate and a 15% false-accept rate. That means that humans have about an 85% likelihood of catching bad products on the line, but when they do reject something off the line, about 15% of the time those products are actually good and should have made it to customer.
The other thing remember is that on higher-speed lines, you’re unlikely to have just one faulty product; depending upon line speed, a mistake could go for 20, 50 or 100 products. Or more. Catching those before they go further through your factory (and certainly out your doors) is imperative.
What to include in your ROI spreadsheet
In calculating the ROI on your automated vision inspection solution, make sure you take into account:
- the number of parts/items you manufacture per hour
- hours of operation per day and then per week
- the item’s cost
- the cost of your current manual (human) inspection (so that worker’s wage)
- the percentage of scrap product
- the 15% guides of false accept and false reject, and
- the percentage of defects caught in the line and then in the plant and the cost of defects at your customer’s facility (so the 1/10/100 thumb rule)
Using a spreadsheet to work this out allows you to easily manipulate figures to see the impact of different variables; even just reducing scrap from 2% to 1% will make a huge difference to your annual defect costs, so reducing it from any higher will have a massive impact.
Using your spreadsheet, it’s interesting to note that freeing up a worker from the task of manual inspection — to better use their skills and labour elsewhere in the factory rather than staring at a production line — isn’t the biggest saving from automating vision inspection. If that was solely the case, then the ROI on your inspection solution could be rather a long time coming.
No, the biggest impact an automated vision inspection system can have is in saving faulty products reaching the customer. Using your spreadsheet with the line items above will show you very clearly what the ROI is on your automated vision inspection system. And while those figures show very real cost savings, don’t forget to add the intangibles, such as brand image and customer appreciation, which are all part of the ROI on automating your vision inspection.
If you’d like some guidance on calculating the ROI on a system, the iQvision team is ready and able to help. Please contact us via email or call 1300 IQVISION (1300 478 474). We have years of experience customising applications from the simple to the complex.
You may also find this quick ROI payback calculator for checkweighers handy, along with this blog on how to calculate the ROI of your checkweigher.
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