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Automotive Industrial Robot - Total Cost of Ownership

  • Perusahaan Otomobil Nasional Sdn Bhd (Tanjung Malim)


A financial approach in evaluating & selecting industrial robot brand to be used in automotive body assembly processes
Automotive Industrial Robot - Total
Cost of Ownership
Published on August 17, 2018
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Rashidi Asari
Production Engineering - Body at PERUSAHAAN OTOMOBIL NASIONAL SDN. BHD.
In automotive manufacturing processes, industrial robots are widely used
to increase productivity while maintaining desired quality standard and design specification in
production line. The increasing trend of industrial robot's application in automotive industry
are mainly influenced by high volume production capacity's requirement, safer to use and low
operational cost. Therefore, the selection of robot's type and brand are crucial since this will
impact on total cost in operating robots in manufacturing's plant.
The typical method of selecting robot's type and brand is matching robot's
specification with product and manufacturing process requirements, then, choosing the robot's
brand base on the lowest purchase price offered by robot's makers. This method is actually not
really effective since it is not consider the operational cost, which may start right away after
robot installation till end of production (EOP) of a car's model. The average of effective and
productive period of robot's operation is only 7 years. After this period, major refurbishment
required such as servo motors, gears and servo pack replacement in order to prolong robot's
The recommended method to evaluate robots from various robot's makers
is using Total Cost of Ownership (TCO) method. TCO is a financial estimate intended to help
buyers and owners determine the direct and indirect costs of a product, for this case - robot
brand's selection. The elements of TCO are described as follows;
There are 2 elements of TCO, which are initial cost and operational cost. Initial or purchase
cost includes robot and it system cost, initial spare parts, training and extended warranty cost.
For operational cost, 3 main elements need to be considered - robot power consumption,
maintenance and downtime cost. The following chart shows 1 case study of 2 different robot's
brands, operating 1 shift a day, for 7 years;
From the chart, initial or purchase cost contributes 57.5 % to 84.9%, while
operational cost contributes 15.1% to 42.5% from total cost. For operational cost, 5.0% to 5.8%
of cost is contributed from electrical power consumption, 2.8% to 10.0% contribution comes
from maintenance cost, and 6.6% to 27.5 % comes from cost of downtime. Therefore, it is
recommended to consider robot's reliability since low robot's reliability will cause high
downtime and spare part cost (includes in maintenance cost) in total operational cost.
For robot downtime cost, it is a bit difficult to estimate without robot
downtime history record. However, from mean time between failure (MTBF) values extracted
from robot technical specification, it is possible to estimate robot availability rate. Downtime
rate is just inverse of robot availability rate.
The average MTBF of industrial robot is around 40,000 hours. It does not mean that robot will
only fail after 40,000 hours (4.6 years), but the value is used to estimate availability rate as
shown in the above graph. For example, when looking at MTBF 40,000 hours curve, for 1st
year, the estimated availability rate is 80.3%, equal to 19.7% of downtime rate. In 2nd year,
availability rate is 64.5%, and will decrease over the years of operation. When comparing with
MTBF 400,000 hours curve, the availability rate goes higher than MTBF 40,000 hours curve.
It means, higher the MTBF value, higher the robot availability rate, resulting higher robot
reliability index (more reliable). However, for first time robot's owner / user, it is highly
recommended to make survey or get feedback from other manufacturing plant that use same
robot's brand since downtime rate is also can be influenced by unmatched tool - robot payload
and working environment.
It is possible to estimate robot power consumption without actually
measuring it. 3 states of power rated capacity are required for calculation. Some of robot
makers provide the data in robot's technical specification but some robot makers are not. The
sample of calculation is as follows;
From the table, 3 robots from different robot makers are evaluated in term of robot power
consumption for 1 shift operation, in 1 month.
In conclusion, TCO's method is very helpful for the owner to evaluate
potential robot's brand to be used since the robot investment in automotive manufacturing plant
is high. Just like inverted iceberg theory, visible part is initial / purchase cost, but hidden part,
which is operational cost - may contribute about 15.1 to 42.5 % from total cost of ownership,
depending on robot's reliability index.
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