A Suggested approach to model picking bots implementation costs in your warehouse

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The Bots are coming

And sooner or later, you WILL have them in your warehouse. Now when exactly you should make the leap is a question that is not as straightforward as many want you to believe. The Technology is evolving so rapidly that if you are in certain industries, making a move too early may mean that within a couple of years, you may be stuck with a fleet of bots that are half as competent as those your competitor has. There is a methodological way to analyze what is the right time, that incorporates internal and external factors but that is not within the scope of this article. In this article, I will share my insights on how you can approach building a cost model for Warehouse picking bots implementation.

The Cost categories

As you can see in the illustration below, the costs pertaining to implementation of picking bots can be categorized into the three categories shown:

  1. Subscription related costs

2. Deployment & Integration Costs

3. Employee training costs

As indicated in the illustration above, there are parameters that you will need to incorporate into your model for each category.

Subscription based costs

  • Number of regular Operations bots
  • Number of additional bots for peak season
  • Subscription cost/bot/month
  • One time deployment fees

Deployment & Integration costs

  • Initial deployment & Integration time
  • Salaried supervisors involved
  • Supervisor salaries
  • % of time supervisors will spend on integration
  • IT resources involved
  • % of time these IT resources will spend on integration
  • Fully loaded IT salary
  • Layout modifications costs

Employee Training costs

  • Number of permanent full time employees involved
  • Hrs of training/employee
  • Full loaded hourly wage-Full time
  • Number of part time employees involved
  • Hrs of training/employee
  • Full loaded hourly wage-Part time
  • Trainer Costs

Note that these buckets and parameters are indicative so that you can think about structuring your model accordingly. This suggested approach is not cast in stone and hence can be modified as per requirements.


Views expressed are my own.

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