Inventory Drone ROI Calculator
Why you should forecast your inventory drone project ROI
When investing in automation and innovation projects, forecasting your financial returns is a crucial ingredient in the business case submission. Whether you’re already planning a new drone system implementation, or exploring future opportunities, our Inventory Drone Project ROI Calculator is the tool you need. It helps you quickly calculate not only the overall cost savings, but also returns the Annualised Return on Investment (ROI) and Internal Rate of Return (IRR), giving you a comprehensive view of your project’s financial potential over the course of its anticipated lifespan.
How it works
Our Project ROI Calculator is designed for accuracy and ease of use. Simply enter your project details—including costs associated with the current process and project lifespan—and get instant insights. Here’s what it gives you:
Comprehensive ROI Analysis - Get both annualised ROI and IRR to fully understand your project’s profitability.
Customisable Project Length - Tailor the results to reflect the specific timeline of your project.
Data-Driven Decisions - Use the insights to plan and prioritise your innovation project roadmap effectively.
What do I need for the ROI Calculator?
To use the calculator effectively, you simply need to provide details about your current manual perpetual inventory process, including:
Current Costs: Input the resources and costs associated with your current manual inventory management process.
Productivity Uplift: The calculator will estimate the total number of hours that can be relieved from your current labour and MHE resources. This is time that can be redeployed to revenue-generating tasks. You will find a section that allows you to account for this productivity uplift.
Added Revenue: If relevant, input any additional revenue you anticipate as a result of increased workforce productivity.
The calculator then automatically compares these manual costs with the projected costs of automating the process, providing you with clear insights into the potential ROI.
ROI Calculator FAQs
Our Project ROI Calculator is ideal for a wide range of logistics professionals looking to assess the financial impact of automating their perpetual inventory processes with a drone project, including:
- Warehouse Managers: Evaluate the financial benefits of shifting from manual to automated inventory management.
- Business Owners: Determine the cost savings and ROI of investing in automated inventory drone technology.
- Operations Managers: Understand the potential revenue gains and cost savings from automating manual perpetual inventory tasks.
- Supply Chain Analysts: Assess the impact of automation on the overall efficiency and cost-effectiveness of supply chain operations.
- Financial Controllers: Justify investments in automation by demonstrating potential returns and efficiency gains.
- Logistics Coordinators: Identify the financial benefits of streamlining inventory processes through automation.
- Project Managers: Plan and manage the transition to automated systems by understanding the ROI and potential productivity improvements.
- IT Managers: Evaluate the financial and operational impact of implementing new automation technologies within the organisation.
- CFOs (Chief Financial Officers): Make data-driven decisions on capital investments in automation, ensuring they align with the company’s financial goals.
- Procurement Officers: Assess the long-term cost benefits of adopting automated inventory solutions.
We request details about gross salary, overtime, pension contributions, and paid holiday to calculate the true cost per hour of labour to your business:
- Gross Salary: This is the base amount paid to the warehouse operative before any deductions.
- Overtime: The calculator includes overtime to ensure that any additional hours worked are factored into the cost of labour.
- Pension Contribution %: Pension contributions are a significant part of the total cost to the employer, so they are included to give a more accurate figure.
- Paid Holiday: Paid holidays are accounted for because they represent a cost to the business even when the employee is not working.
- National Insurance Contribution: We use all of these data points to calculate the employer’s annual National Insurance contribution for an average warehouse operative. This is an essential cost that needs to be factored into the net hourly labour cost, ensuring that all aspects of employment expenses are included.
- True Cost Calculation: By combining these elements, the calculator determines the actual cost per hour of employing a warehouse operative. This comprehensive approach ensures that your labour costs are fully accounted for when calculating the financial impact of automating the inventory process
The calculator requests the remuneration costs of a single warehouse operative because it uses this data—calculated as explained in the previous FAQ—to determine the average cost per hour of labour, which is then applied across the entire task. Here’s how it works:
- Calculation method: The calculator takes the total number of hours invested in the task per year—including any intended increase in stocktake frequency (e.g., moving from quarterly to monthly routines)—and multiplies it by the net hourly labour cost. This approach ensures that the full scope of labour costs is captured, even if you plan to increase the frequency of stocktakes.
- Why it’s effective: By focusing on the per-hour labour cost, as calculated in the previous FAQ, the calculator can accurately scale the total cost based on the cumulative hours worked, regardless of how many staff members are employed. This method provides a comprehensive picture of your overall labour expenses without needing to input each individual employee’s details.
The calculator simplifies the ROI calculation by comparing the costs of doing the task manually with the costs of automating with the inventAIRy XL inventory drone solution:
- ROI = (Savings + Additional Revenue – Current Manual Costs) / Current Manual Costs x 100
- The calculator uses your inputs to estimate potential savings, productivity gains, and additional revenue, automatically generating the ROI for transitioning to an automated process.
- The calculator includes tax benefits specific to the United Kingdom, such as capital expenditure allowances and deductible operating expenses, to accurately calculate the net cost of the automation project and ensure that the ROI calculation reflects the true financial benefits of the investment within the context of applicable tax laws. For users outside the UK, please note that these tax benefits may not apply in your jurisdiction.