Keywords
Citation
(2010), "Guidelines for accurate budgeting for industrial robot systems", Industrial Robot, Vol. 37 No. 1. https://doi.org/10.1108/ir.2010.04937aaa.002
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, 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 $ ________
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
At supplier's facility $ ________
In-house $ ________
Programming
At supplier's facility $ ________
In-house $ ________
Maintenance/troubleshooting (mechanical)
At supplier's facility $ ________
In-house $ ________
Maintenance/troubleshooting (electrical)
At supplier's facility $ ________
In-house $ ________
Advanced/special training (_______________)
At supplier's facility $ ________
In-house $ ________
Subtotal $ ________
Worksheet no. 6
Safety
Fencing/rails $ ________
Anti-intrusion devices (i.e. light curtains,interlocks, pressure mates, etc.) $ ________
Subtotal $ ________
Worksheet no. 7
Supplier services
Systems engineering $ ________
Controls engineering $ ________
Software engineering $ ________
Project management $ ________
System integration $ ________
Initial acceptance testing/run off $ ________
Installation __ Installation supervision __ $ ________
Commissioning and final acceptance testing $ ________
Programming support (on-site) $ ________
Software support (on-site) $ ________
Service contracts (specify: _______________) $ ________
Subtotal $ ________
Worksheet no. 8
Installation
Site preparation (foundation) $ ________
Services (air, water, electrical) $ ________
System interconnection $ ________
Existing equipment rearrangement/relocation $ ________
Host computer interfacing $ ________
Start up/debug $ ________
Subtotal $ ________
Worksheet no. 9
Miscellaneous
Extended warranty (specify: ____________) $ ________
Spare parts:
Initial (for start up) $ ________
Routine maintenance $ ________
On going production support $ ________
Freight $ ________
Tax $ ________
Duties $ ________
Contingency (____%) $ ________
Subtotal $ ________
Budget summary worksheet
Subtotal Worksheet no. 1 $ ________
Subtotal Worksheet no. 2 $ ________
Subtotal Worksheet no. 3 $ ________
Subtotal Worksheet no. 4 $ ________
Subtotal Worksheet no. 5 $ ________
Subtotal Worksheet no. 6 $ ________
Subtotal Worksheet no. 7 $ ________
Subtotal Worksheet no. 8 $ ________
Subtotal Worksheet no. 9 $ ________
Total robot system budget $ ________
In this Viewpoint article, I hope I was able to shed some light on what it really takes for you to develop an accurate and comprehensive budget for an industrial robot system.
I know companies who actually send selected worksheets to potential suppliers to fill out and include them with their proposal and quotation. If you are involved in the competitive bidding process where lowest bid wins, the last thing you want is a lump sum quote for the system. How do you know what you a paying for various elements? Are you being overcharged for some or all of them? Are you getting exactly what you expected to get? It always pays to know what you are getting for your money. It is like the fellow who purchased London Bridge and thought he was purchasing Tower Bridge.
Geary V. Soskahas over 36 years experience in applied robotics and in teaching the subject at the college level. He has authored numerous technical papers and trade publication articles on the subject and was the 1991 recipient of the International Golden Robot Award.