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Return on Investment for the Greentech E6

Here we discuss a topic we are regularly asked about, and are happy to share because the return on investment opportunity on our technology, especially the E6 Booth robot is quite outstanding.

Background

Gas Catalytic technology delivers significant benefits over traditional gas fired baking or electrically generated infrared in two specific areas; the speed and the quality of the cure (please see other articles about the details on this). The additional speed allows for more vehicles to be painted in a given time period, and the quality of cure (immediate hardness) also allows for paintwork to be rectified using denib and buff techniques where necessary and be reassembled straight away with less risk of damage to new paintwork. In addition to these benefits, the equipment typically consumes about 70% less gas than a traditional booth, therefore reducing running costs and enabling businesses to operate more environmentally friendly when it comes to using our planet’s resources.

So it is the speed at which we can dry vehicles, for this ROI that is most important, coupled with the energy savings that allow us to calculate an ROI specifically around this piece of equipment. It should be noted however that the return is far greater when applying the whole Production Logic process to the business as it’s not just about drying vehicles, but booth cycles, maximising constraints and buffering that give the real benefits to the business as a whole. That said, in this document we’ll just look at it for the single E6 Robot itself.

The Return on Investment

(calculated on an annual basis)

The E6 robot can easily process 2 or more vehicles every day through a booth compared to a traditional system. The equates to an additional 500 vehicles per annum.

You do not require any additional staff or have any additional overheads from processing all those additional vehicles, all you need is the robot in the booth. That means almost all the gross profit on those additional jobs goes straight into bottom line net profit.  We’ll take 20% out to cover possible increased admin charges etc though.

With a Gross Profit of $1,035 per vehicle, 80% of that is $828, multiplied by 500 vehicles per annum gives an additional $414,000 in net profit every year.

Now we add in the gas savings – assuming $20 for a traditional bake cycle and 70% savings using a robot means $14 saved for each cycle. At 5 cars a day for 50 weeks a year that gives an additional saving of $17,500 per annum in gas alone.

So total return on investment is $431,500 every year for processing 2 additional cars per day. Or, if you wanted to halve the potential gain just to be really safe, it’s still a return of $224,500 for just doing one vehicle per day extra.

Remove the initial $100,000 cost of the robot from the additional profit and and it calculates to $331,500 additional profit, or doing just one extra vehicle each day, it is $124,500 straight onto your bottom line at year end.

With a 2 car per day increase this will return your capital outlay completely in under 3 months, and go on to add about $36,000 additional net profit to your business each subsequent month!

Or, at a very conservative 1 car per day increase, you’ll return all of your outlay in under 6 months, and add $18,000 Net profit per month thereafter.

Basis of the ROI

 

Clearly on this page we’re not using your own numbers, which of course we would be happy to do (just get in touch!), but we can use industry known numbers to at least give a good indication of what’s likely. So the following figures are used for the calculations:

 

Average severity:
$2,300

 

Gross profit per repair (not net):
45% – equates to $1,035 USD

 

Average number of traditional booth cycles per day per booth:
5-6 in a good shop

 

Booth cycles from a standalone E6 per day
 

without production logic:

7-8

with production logic (not used in this ROI)

10-11

 

Gas consumption per traditional booth cycle (sealer/basecoat/clearcoat combined):
$20

 
 

Supply of vehicles:

 

It is assumed that there is an adequate supply of vehicles to meet the increased booth cycle opportunity, and that the booth is typically the primary constraint of the business (otherwise why else would you be looking at an E6 booth robot!)

 
 

Number of weeks worked per annum:
50 assuming (2 weeks lost over the year)

 

Typical cost of an E6 delivered, installed, trained and functioning:
$100,000

 

With these numbers we are able to calculate the ROI per Greentech robot.