Return on Investment Financial Dashboard Example Retrofit Project

Return on Investment
$1,092,655

Return by Category
Avoidance 0% Increases 2%

$150,000
Reductions 98%

Investment

Return

Financial Dashboard Summary ROI Investment: Savings from Cost Reductions: Savings from Cost Avoidance: Savings from Revenue Increases: Estimated Savings: -$150,000 Financial Dashboard Summary Metrics Return on Investment Percentage: Payback Period (Months) Factor: 7.4% Net Present Value: Internal Rate of Return: Key PAIN Indicators Reduced part cycle time: Reduced labor costs: Reduced CNC parts inventory: Reduced CNC mainenance costs: Total value estmation from KPIs:

Year 1 Year 2 Year 3 $150,000 $330,985 $370,585 $370,085 $0 $0 $0 $21,000 $0 $0 $351,985 $370,585 $370,085 728% 5 $947,746 232% Year 1 Year 2 Year 3 $158,400 $198,000 $198,000 $168,000 $168,000 $168,000 $21,000 $0 $0 $4,585 $4,585 $4,085 $351,985 $370,585 $370,085

Total $150,000 $1,071,655 $0 $21,000 $1,092,655

Total $554,400 $504,000 $21,000 $13,255 $1,092,655

Key PAIN Indicators $554,400

$504,000

$21,000

$13,255

Cycle Time

Labor

Sell Parts

Maintenance

GE Fanuc Intelligent Platforms Challottesville, Virgina 22911 Tel: 434-978-5000

CNC Retrofit Needs Analysis Questionnaire Start Screen

To use this tool press the "Clear" button. The sheets will be cleared and the cursor will be placed on the first data entry field. Enter Company information first, followed by General information. Respond to the Key PAIN Indicators (KPI) questions below and press the Dashboard button to calcuate the value potential. Date: February 13, 2014 ACME Manufacturing John Doe
Load Example Data Clear Worksheet

Company Name: Contact Name: Address: City:

1234 Somewhere Street Gotham City State: 123-456-7890 Example Retrofit Project Key PAIN Indicator (KPI) Questions for Value Estimate A. Is your cost per part to high? B. Are your CNC maintenance costs too high? C. Do you have too much CNC parts inventory? D. Are your labor costs too high? DC Zip: 12345

Phone Number: Project Name:

General Questions What is the total machine operator labor hours per day available in a normal working day? What is the maximum number of machining hours available in a normal working day? How many working days are there in the year? How many parts are produced in the typical working Day? What is the burden rate for the process per hour? Calculated current cost per part: How many hours of production are lost each year due to CNC failures? Caclulated days of production are lost each year due to CNC failures: How many days of production will be lost to complete the retrofit? What is the cost of the retrofit? 10 $88.24 200 24

20

300 34 $150.00

60

$150,000.00

Reduce part cost by decreasing part cycle time using the increased speed of motors and improved CNC acc/dec technologies What is the anticipated cycle time improvement from increased uptime, faster motors and improved acc/dec? GE Fanuc Studies have shown that cycle time improves by at least 20% after a retrofit Calculated parts production after retrofit Calculated cost per part after retrofit Calculated cost savings per part Calculated cost savings per day Calculated days of production first year Calculated cycle time cost savings first year Calculated cycle time costs savings subsequent years 41.48 $72.32 $15.91 $660.00 240 $158,400.00 $198,000.00 22%

Reduce the cost of CNC repairs by increasing control system reliability using a CNC with a high MTBF, a 2-year service contract and 24/7 technical support What are the CNC parts replacement and repair costs per calendar year? What are the CNC contracted services costs per year? What are the internal CNC services labor hours per year? What is the labor rate of the internal CNC services labor? Calculated internal services costs per year: Calculated total maintenance costs: $17,000.00 $6,285.00 $12,000.00

$6,000.00 200 $85.00

GE Fanuc Studies have shown that little of no CNC breakdowns occur several years after a retrofit with a 10,000 hr MTBF What will the CNC parts replacement and repair cost be per calendar year after the 2-year warranty expires? What will the CNC contracted services cost be per calendar year, after the 2-year warranty expires? What will the internal CNC services labor hours per year after the retrofit? Calculated internal services costs after the retrofit: Caclulated maintenance cost savings Year 1: Caclulated maintenance cost savings Year 2: Caclulated maintenance cost savings Year 3: Total maintenance cost savings over 3 years: $1,700.00 $4,585.00 $4,585.00 $4,085.00 $13,255.00 $500.00

$0.00

20

Increase revenue by selling obsolete CNC and parts inventory How much is the old CNC worth? What is the value of the obsolete CNC parts in stock? Caclulated revenue generated by sale of old CNC and parts: $21,000.00 $3,000.00 $18,000.00

Reduce labor cost by increasing process reliability and automation so one operator can manage multiple machines using a CNC with a high MTBF and with automation features. What is the hourly rate of the machine operator? How many machines does the operator currently manage? Calculated annual cost of the operator for this machine: After the retrofit, how many hours per day will the machine be able to run without an operator? Calculated number of operator hours after the retrofit: After the retrofit, how many machines will the operator be able to managet? Calculated annual cost of the operator for this machine after the retrofit: Calculated annual labor reduction cost savings: $84,000.00 16 2 $252,000.00 8 $35.00 1

$168,000.00

Version : Date: Athor:

1.0 3/13/2008 Mark Brownhill

The purpose of this calculator is to show the customer (end-user) the cost of inaction on a CNC Retrofit. There are many other factors that could be included in the customers formal ROI, but the factors included should be sufficient t The ROI Financial Dashboard is the summary data that should be presented to the customer, and included in proposals. The Start Screen includes the questions to ask and the data to enter to calculate the ROI Financial Dashboard. For more information refer to "ROI Selling" by Michael J. Nick and Kurt M. Koenig

ncluded should be sufficient to justify the retrofit.

d included in proposals.

al Dashboard.