Summary result
- Total installed cost: $98,500
- Annual net saving (labour minus ongoing costs): $75,200/year
- Simple payback period: 15.7 months
- 5-year cumulative net return: $277,500
- The numbers work — but only because this is two-shift operation with a realistic labour rate and a well-scoped application
The scenario
A 45-person job shop in the US Midwest runs a CNC lathe on two shifts, 250 days per year. A machine operator is currently required for the full shift to load raw bar stock, unload finished parts, and deburr. The machining cycle is 4 minutes per part — long enough that the operator spends 70% of the shift waiting for the machine.
Application: Cobot machine tending — UR10e loading raw stock and unloading finished aluminium turned parts (average 800 g, max diameter 120 mm). The cobot will handle the load/unload cycle; the operator will be redeployed to a second machine.
Operator labour rate: $28/hour wages + 60% burden (benefits, payroll taxes, overhead allocation) = $44.80/hour fully loaded. Two shifts × 8 hours × 250 days = 4,000 operator-hours per year currently committed to this machine.
The cobot allows the operator to run a second machine. Net labour saving: the shop avoids hiring a second operator for the new machine, or redeploying the existing one frees the equivalent of one full-time operator from the tending task. Annual labour saving = 1 FTE × $44.80/h × 2,000h = $89,600.
Step 1: Total installed cost
| Cost item | Amount | Notes |
|---|---|---|
| Universal Robots UR10e + controller | $47,000 | List price; distributor quote September 2026 |
| Pneumatic double gripper (EOAT) | $4,500 | Schunk double-finger gripper; raw and finished part jaws |
| EOAT mounting plate and custom fingers | $2,200 | Machined aluminium; designed for part diameter range |
| CNC door automatic actuator | $1,800 | Pneumatic cylinder + switch; retrofitted to existing door |
| Digital I/O interface to CNC controller | $600 | Relay module; M-code handshake |
| Part staging table (raw and finished stock) | $3,200 | Custom aluminium staging fixture; 40-part raw stock capacity |
| Safety risk assessment (ISO 10218-2) | $3,500 | External consultant; 8-hour site assessment + report |
| Light curtain (lathe access area) | $2,800 | SICK safety light curtain; safety relay |
| Integration (mechanical, electrical) | $18,000 | Integrator labour: mounting, wiring, PLC, commissioning |
| Programming (cobot path + CNC handshake) | $12,000 | 40 hours programming + 16 hours commissioning @ $200/h |
| Operator training (2 days) | $1,900 | UR training course; integrator on-site day |
| Contingency (5%) | $4,750 | Standard project contingency — often consumed |
| Total installed cost | $102,250 | Within the $80,000–$130,000 range for this application type |
Note: The customer supplied the compressed air connection (already available at the machine) and the 240V electrical supply. These are common assumptions in integrator quotes that can add $1,000–$5,000 if not already present.
Step 2: Annual labour saving
The cobot runs the load/unload cycle during both shifts. The operator is redeployed to a second CNC machine that previously sat idle waiting for an operator. The net saving is the equivalent of one full-time machine operator role over both shifts:
Fully-loaded rate = $44.80/h
Annual labour saving = 4,000 × $44.80 = $179,200/year
[Note: the operator is redeployed, not eliminated — the saving is the avoided cost of hiring a SECOND operator to run the second machine, now that the first operator is freed from tending the first machine]
Two-shift saving split: Day shift ($89,600) + Night shift ($89,600) = $179,200/year
This is the optimistic case — it assumes the cobot runs reliably on both shifts and the second machine generates sufficient throughput to justify the operator's time. A conservative estimate (accounting for 85% uptime and partial night-shift utilisation) reduces this to approximately $130,000–$150,000/year.
Step 3: Annual ongoing costs
| Cost item | Annual cost |
|---|---|
| UR service contract (remote support + on-site call-out) | $4,200 |
| Gripper jaw inserts and wear parts | $800 |
| Programming updates (1 new part family per quarter × 4 h) | $1,600 |
| Compressed air cost (venturi for gripper, ~0.4 m³/min) | $400 |
| Total annual ongoing cost | $7,000 |
Step 4: Payback calculation
Annual labour saving: $179,200
Annual ongoing costs: $7,000
Annual net saving: $179,200 − $7,000 = $172,200
Simple payback: $102,250 ÷ $172,200 = 0.59 years = 7.2 months
1-year net return: $172,200 − $102,250 = $69,950
3-year net return: ($172,200 × 3) − $102,250 = $414,350
5-year net return: ($172,200 × 5) − $102,250 = $758,750
This is an exceptional result — driven by two-shift operation and genuine labour opportunity cost (the freed operator enables a previously-idle machine to run). The single-shift equivalent:
Annual net saving: $89,600 − $7,000 = $82,600
Simple payback: $102,250 ÷ $82,600 = 15.2 months
15 months is still strong. The build brief target of under 24 months is comfortably met. Run your own numbers with the free ROI calculator.
Sensitivity analysis: what changes the payback the most?
| Variable change | Single-shift payback | Direction |
|---|---|---|
| Base case (as above) | 15.2 months | — |
| Labour rate drops from $44.80 to $35/h | 19.4 months | Worse |
| Labour rate rises to $55/h | 12.4 months | Better |
| Installed cost rises to $130,000 (complex integration) | 19.3 months | Worse |
| Uptime drops to 75% (cell unreliable) | 20.2 months | Worse |
| Hours freed drops from 8h to 5h/shift (frequent changeovers) | 24.4 months | Borderline |
| Add second shift (two-shift operation) | 7.2 months | Much better |
The single most impactful lever is shift count — adding a second shift halves the payback. The second most impactful is hours freed per shift (how much of the shift the operator genuinely stops attending the machine). If your operator still needs to be at the machine for 50% of the shift (short cycle times, frequent changeovers), the ROI is substantially worse than the headline number suggests.
What integrators often skip in their ROI presentations
When an integrator presents you with a payback period, check that these items are included in their cost model and saving model:
On the cost side:
- Ongoing annual costs — service contracts, EOAT wear, programming updates. These are often omitted, making the first-year ROI look better than it is.
- Customer-supplied items — electrical supply upgrades, compressed air, staging tables, facility modifications. These can add $5,000–$20,000 to your actual spend.
- Contingency — first-time integrations nearly always run over scope. A 10–15% contingency is realistic.
- Retraining and change management — not just the formal training, but the time operators spend learning a new workflow before they reach full productivity.
On the saving side:
- Actual hours freed — an integrator may assume 8 hours/shift saved, but if your changeover requires the operator at the machine for 2 hours per shift, only 6 hours are freed. This is a 25% error in the saving estimate.
- Uptime assumption — 95% uptime is commonly assumed; 80–85% is more realistic for a first installation in year 1. Verify what uptime is assumed and what the ROI looks like at 80%.
- Opportunity labour cost — is the freed operator being redeployed to a productive task, or are they surplus? If the business would not otherwise hire anyone, the saving is the avoided future hire, not the current operator cost.
Frequently asked questions
Should I use simple payback or discounted cash flow (DCF) for robot ROI?
What is a "good" payback period for a cobot?
Does the Section 179 deduction change the ROI calculation significantly?
Sources
- Universal Robots ROI methodology guide, universal-robots.com, accessed September 2026
- Robotic Industries Association, "Calculating Robot ROI: A Practical Guide", 2025
- IRS Publication 946 — How to Depreciate Property (Section 179 guidance)
- Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026