How ROI and Payback Analysis Accelerates Additive Manufacturing Capital Expense Approvals

Additive Manufacturing ROIOften in business, the question isn’t what you should be doing, but rather what you can get approval to do. Your rich study of new technology and advancements in your chosen discipline is often out of alignment with corporate expense objectives. Nowhere is this truer than when it comes to capital expenditure for equipment purchases – like in your additive lab or factory.

Too often we see forward-thinking engineers and technicians, eager to introduce technology that achieves key business objectives, stymied by capital approvals. This is even truer when introducing progressive technology for which there is no existing line item in the budget. The automation of additive post-printing falls squarely into this camp.

Technicians and engineers want the solution for the unparalleled consistency of the results. With overall innovation in additive accelerating, there is increasing complexity in part geometries, print materials and 3D printer technologies. And, it comes hand in glove with higher expectations for quality, including fine detail protection, internal channels finishing, and processing of large-scale parts. But somehow, those expectations don’t translate to the expense line of the budget held by the CFO.

What to do? Speak in their language. Don’t talk to your finance team about your challenges (or even the solution) – speak in terms of ROI and Investment Payback Period. (Hint: we can help.)

The good news: you’re not the first one to run into this. The better news: we’ve now worked with dozens of companies to help frame the opportunity to their finance teams. A word on both Payback Period and ROI, and how to proceed:

Regarding Payback Period calculations, all other things being equal, finance types consider investments that pay for themselves in a shorter time period as preferable. The key to a payback analysis is the measure of time. Payback period is the time it takes for the “cumulative returns” to equal the “cumulative costs” – in other words, payback period the break-even point in time. Once you cross the break-even point, all subsequent operations (e.g., of an automated post printing solution) actually adds to the value of the company. PostProcess has an automated system that can help you evaluate data like this for your company – and help you package it for internal presentation.

Note, while “time” is the classic measure of payback period, some analysts also look at break-even (or payback) in terms of unit production. We’ve got your back: our tools can calculate that too.

Return on Investment (or ROI) is a measurement of the consequence of the investment (in this case, the investment into an automated post printing solution). The ROI is a ratio, or percentage, comparing net gains to net costs. It provides a direct, easily understood measure of the investment’s profitability – and lets the finance (or purchasing) team quickly compare the magnitude and timing of expected gains with the scale and timing of costs.

The PostProcess ROI Calculator provides a comprehensive view of your system that goes well beyond the cost of purchasing an automated post print solution. It considers your average labor cost, material usage, part breakage in your manual and traditional finishing approaches and more. In other words, it’s a comprehensive view of expense – which suddenly has you speaking “their” language when talking to finance.

Most of our customers have a payback period of weeks (so months, not years). Let us show you your ROI and payback perod. Contact us today.

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