How Can Manufacturers Calculate ROI?

How to calculate a ROI will vary greatly depending on each business. We must consider the fact that every manufacturer is unique and has different goals. This can make determining ROI a bit tricky sometimes. From an organizational perspective, it may seem complicated. First, it is helpful to figure out what issues may be impacting operations and then determine what goals can fix those issues. First and foremost, be sure to secure manufacturing insurance, as this industry has such a wide range of serious risk exposures. You may be told that you can improve one problem by a certain percentage. However, the reality is that each manufacturing environment is so different that the percentage might be lower than the true potential. To determine ROI for your manufacturing business, you will need to attain the value from your analytics based on your specific problems and goals.

The Importance of Visibility

You can use a ROI calculator to help you get an idea, however that cannot offer precise numbers. Your key focus should be visibility. This goes for every manufacturer. It is crucial that you have a clear mission. Once you understand that having thorough data and visibility is helpful, you are on the right track. It is beneficial to monitor the machines for real-time data analysis for true insight on what is happening. So, what do you do with this information? With access to this kind of data you can solve the issues that are standing in the way of your goals. There are tracking software systems you can implement to connect the whole organization from top to bottom, directing data to the right hands. How you intend to use the software will directly impact its value to the business. The goal should be to tackle the issues that truly need to be dealt with. Consider investing in manufacturing analytics to calculate and continue tracking your ROI.

The Ins and Outs

Is calculating your ROI really needed? Who doesn't want a good return on investment? Again, manufacturing analytics will not look the same for each business and sometimes with what you originally may have been looking to accomplish, you may find many more answers. While some companies are focusing on cost reduction, others are looking to increase revenue. Manufacturers can begin their ROI calculation journey by considering their machine availability, scrap and throughput. Just keep in mind that just because one manufacturer can increase their throughput by 30%, doesn’t mean the next can. How does ROI relate to your company specifically? You may find it helpful to determine your soft costs, reduce downtime, reduce changeover time, increase throughput and performance and make overall quality improvements. Manufacturing analytics may just be the answer to improving your plant floor’s operations and helping you to realize your ROI.

About David G. Sayles Insurance Services

At David G. Sayles Insurance Services, we help our clients decide which of these options is best for them based on their current situation and risk factors.  Contact us at 1-855-977-1842 or insureme@dsayles.mysites.io for a consultation!