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Holste's "Sorting it Out" Blog

Growing Economy Drives Investment In Automation Projects


Success Depends on Project Planning

 
Holste

When planning a highly mechanized/automated material handling project, companies expect that the new system will be capability of handling future growth in a more efficient and productive manner. The new system capacity may be 2X or 3X current volume. The savings generated by the project will fluctuate based on actual sales volume, usually beginning small in the first year, and then gradually increasing as the number of customer orders and volume of goods shipped increases. This should be reflected in the payback calculations showing a gradually increasing ROI as volume grows over the forecasted period. However, if business conditions change such that the projected volume levels never materialize, then the company’s investment in automation may not be fully realized.

Does this mean that companies should shy away from investing in projects that are tied to growth? Not at all! If you don't invest in the future, it will surely be bleak. Instead, observe the following important project planning principles when working through the financials of your project...

 
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Cliff Holste is SCDigest's Material Handling Editor,
and author of our Sorting it Out Column/Blog
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Logistics News : Growing Economy Drives Investment In Automation Projects
Success Depends on Project Planning
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Why the Time is Right for Labor Management Systems in Distribution




 

 
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New Materials Handling Tech Notes
 

The first analytic reports for the materials handling and distribution industry.

This report: Advances in Conveyor Technology increasing System Flexibility

 
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Labor Management System
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Present by SCDigest Editor Dan Gilmore

View our Complete Labor Management System Resources Page

 
 
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