Strip away the vendor decks and every automation business case is the same model: cost divided by annual savings equals payback in years. The entire audit skill is knowing which lines get optimistic thumbs pressed on them.
The six lines
- Loaded labor baseline. The honest denominator: wage + benefits + turnover cost + absenteeism + overtime premium, per hour, times the hours the operation actually runs. Vendors like to use your peak wage; you should use your blended reality.
- Labor displaced (not eliminated). A 40% productivity gain does not remove 40% of headcount; it removes the marginal hours at the constraint, and only if volume holds. The model should book avoided hiring and overtime first — those are real cash.
- Throughput uplift (vendor-stated). The picks/hr claim. Treat it as the ceiling achieved in the reference site, then haircut for your SKU profile, your congestion, and your first-year learning curve. 70-85% of spec in year one is a defensible planning figure.
- All-in capex. Equipment is the visible number. Integration, software, WMS work, electrical, floor repair, network, spares, and contingency routinely add 25-40%. A quote without integration is not a price.
- Opex reality. Maintenance contracts (8-12% of equipment per year), software subscriptions, and the headcount you ADD (a robot wrangler is a real role).
- Utilization. Payback at one shift is double payback at two shifts. The single biggest lever in the whole model is hours-per-week the system actually runs.
The thumb spots
Optimism hides in lines 2, 3, and 6: headcount treated as fully eliminated, spec throughput treated as day-one reality, and utilization modeled at the shift pattern you aspire to rather than the one you run. A model that survives a 20% haircut on all three and still pays back inside your window is a real project. One that doesn't was a brochure.
The operator's list
Demand the vendor's model in a spreadsheet, not a PDF. Re-run it with your blended labor rate, 75% of claimed throughput, and your current shift pattern. If the vendor resists the haircut, that is data.
Independent automation industry analysis — not investment or procurement advice. Capex decisions warrant site-specific engineering diligence.