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The period after which an investment has paid for itself from the costs saved. In handling technology it comes from three sources: shorter cycle and changeover times, less handling scrap and fewer absences from musculoskeletal disorders. The calculation only becomes robust once all three are backed by figures from the plant itself.
The payback period is the investment divided by the annual net return. The net return is the annual saving less the running costs of the unit. The result states after how many years the money invested has been earned back.
An example with assumed figures that are not market prices: investment including installation 30,000 euros, annual saving 14,000 euros, running costs 2,000 euros. The net return is 12,000 euros, the payback period two and a half years.
The price of the unit is only one part. Leaving out the other items makes the purchase look better than it is, and the deviation shows up in the project.
Three sources can be backed with figures from your own plant. First, time: shorter cycle or changeover times, or one person instead of two for the same operation. Second, quality: fewer damaged parts because loads are set down under guidance rather than dropped into place. Third, absence: fewer days lost and fewer restrictions where heavy loads were previously moved by hand.
The third source is the hardest to quantify. What holds up are your own absence figures and reassignments at the workstation concerned, not averages from studies. Where those figures are missing, the calculation should stand without them – with health protection alongside as a duty arising from the risk assessment.
A handling unit incurs costs every year: the periodic inspection, servicing, wear parts such as chains, suction pads and seals, and energy. On pneumatic units air consumption counts, including during breaks if leaks are not fixed. These items reduce the net return and belong in the calculation.
The payback period is a measure of risk, not of profit. It asks how quickly the money is back and ignores what comes afterwards. A structure that stands for twenty years keeps earning after payback – the figure does not show that. Nor does it take interest into account.
For choosing between two solutions it is often sufficient all the same. A larger investment calls for an assessment over the service life as well.
What Entracon offers here is on the matching page.
See what we offer| Item | Direction | Source of the figure |
|---|---|---|
| Unit, installation, foundation, connection | Investment | Quotation and own building costs |
| Working and changeover time saved | Saving | Time study, hourly rates |
| Less scrap and rework | Saving | Quality data of the workstation |
| Fewer days of absence | Saving | Own absence figures at the workstation |
| Inspection, servicing, energy | Running costs | Maintenance plan, consumption data |
Investment divided by annual net return. The net return is the annual saving less the running costs for inspection, servicing and energy.
Each company sets that for itself. The figure is above all a means of comparing alternatives. Bear in mind that handling equipment is used far beyond its payback period.
Only to a limited extent. If the risk assessment shows that a physical load has to be reduced, there is a duty to act regardless of the return. The calculation then helps to choose between the suitable solutions.
One short conversation usually settles more than three quotations. Call or write — you will reach an engineer directly.
Start typing – for example “balancer”, “SAP” or “pipe stress”.
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