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Steve Hansen
The manufacturing industry across every sector is adopting the use of robotics and automation equipment at a never-before-seen pace. Driven by the need to increase productivity, reduce overhead and personnel expenses, compete with competitors that are also upgrading their own manufacturing processes with the latest in automation equipment to perform tasks like assembly, material handling, welding, packing, packaging and palletizing.
The high upfront costs of automation equipment have resulted in a significant increase in the number of established operations, which are turning to equipment leasing and finance companies to mitigate the initial upfront cost of upgrading production lines. This article will detail the many reasons why every manufacturing operation should be actively engaged in upgrading its own facility with the use of robotics and automation processes.
Why Robotics & Automation Are Essential for Modern Businesses
- Increased efficiency and productivity. Any business’s production landscape changes entirely when it upgrades with robotics, which increases speed and precision at every step of the production line and doubles or triples capacity by shifting to 24/7 operations.
- Reduction in labor costs and human error. Robots can perform much faster than any employee and do not require breaks, lunches, or vacations. They don’t get sick or need a vacation or health benefits. You ensure they are powered up and maintained correctly, and they will provide years of faithful service without any HR-related matters to comply with. It is estimated that adopting robotics reduces overhead by 15%-20% and increases productivity by 390% to 40%.
- Scalability for manufacturers, logistics, healthcare, and other industries. Robotics adoption allows any high-capacity production facility to scale operations quickly to adjust production, processes, and capacity to meet fluctuating demands.
The Financial Challenges of Purchasing Robotics & Automation Equipment
- High capital investment requirements. Adopting robotics requires a significant upfront capital investment, like any major business overhaul. In the current economic environment, most companies are protecting cash reserves and turning to flexible lease financing to tailor any significant expense to the company’s current cash flow needs and expected cost savings in the future.
- Rapid technological advancements lead to equipment obsolescence. Innovation in the robotics industry has been nothing short of stunning. This perpetual upgrade cycle means that your system may be obsolete sooner than later. Lease financing becomes the perfect solution as arrangements can be made to terminate one lease and then, at the end of the term, upgrade all the equipment to the latest and most efficient and initiate a new lease, all without any cash out-of-pocket.
- Hidden costs such as maintenance, software updates, and integration. A robot doesn’t need time off, never talk back or get sick. They are machinery that needs to be maintained, serviced, and cared for to see the extended life expectation realized
How Leasing & Financing Solve These Challenges
- Lower Upfront Costs: Access cutting-edge technology without significant capital outlays. We pride ourselves on ensuring that 100% of the equipment and all soft costs for installation warranties, delivery, or training can be included in the lease. Hence, the business truly pays nothing to upgrade its facility and production capabilities. You can also check out our manufacturer’s Guide to Equipment Leasing.
- Flexible Payment Plans: We offer customizable terms to match cash flow needs. We tailor each lease to the customer’s tax situation, cash flow needs, and end-of-term requirements. We have a full complement of leasing products to solve virtually any issue a CFO is wrestling with.
- Preserving Credit & Cash Flow: Keep lines of credit open for other business needs. An equipment lease to acquire robotics and automation equipment is always far better than dipping into a line of credit where there could be bank covenants to tend with, scrutiny on the purchase, or oversight from your banker. Leaving the open lines of a business designed to grow the business.
- Technology Upgrades: Stay competitive with options to upgrade to newer models. Design your lease to terminate at a pre-determined period, with the ability to upgrade all equipment to the latest versions and continue with a new lease. In these cases, the leasing company will take the lead in removing and disposing of the old equipment while you pick up the latest and most efficient systems.
Types of Robotics & Automation Equipment Available for Leasing
- Industrial Robots: Robotic arms, assembly line automation, and welding robots. We have been impressed by the quality and innovation of robotics equipment manufacturing. We are willing to finance any industrial robot or automation system. There are no limits or restrictions on the type of robotic or automation equipment we are eager to invest.
- Logistics & Warehousing: We will finance 100% of automated guided vehicles (AGVs), autonomous forklifts, and robotic sorting systems, as well as many other types of automation equipment, including conveyor systems, collaborative robots, warehouse management systems, automated sortation systems, autonomous mobile robots, packaging automation, picking automation, palletizers and depalletizers, warehouse drones, and even AI.
- Medical & Healthcare Robotics: Robotic-assisted surgery tools, automated lab processors, and AI-driven diagnostic equipment are a big part of our investment portfolio, and we are interested in expanding our investment in this category of medical robots.
- Retail and service Industry: Self-checkout systems, robotic kitchen assistants, Customer service bots, surveillance for unmanaged facilities, controlled access, facial recognition systems, and more.
Case Studies
Case Study: Automotive Manufacturer Increases Productivity by 40%
A mid-sized automotive parts supplier struggled with meeting growing demand due to labor shortages. By leasing robotic assembly arms, they increased production efficiency by 40% while reducing labor costs by 25%. Leasing allowed them to upgrade their robots as technology evolved without major capital investment.
Case Study: Logistics Company Optimizes Warehouse with AGVs
A large distribution center was experiencing inefficiencies in its warehouse operations. Instead of purchasing Automated Guided Vehicles (AGVs) for $2 million upfront, they financed the purchase over five years. The result? 30% faster order fulfillment and a quick return on investment due to increased efficiency.
Case Study: Healthcare Provider Invests in Robotic Surgery
A regional hospital wanted to implement robotic-assisted surgery technology but couldn’t afford a $1.5M upfront investment. Through a structured lease agreement, they acquired the technology immediately and spread costs over seven years, enhancing patient care while maintaining financial stability.
Case Study: Retail Chain Reduces Costs with Automated Checkout Systems
A national retail chain leased self-checkout kiosks instead of purchasing them outright. The FMV lease agreement allowed them to upgrade to new models every four years, keeping their stores ahead of competitors while maintaining lower costs.
Case Study: AI-Driven Customer Service Bots in Banking
A regional bank introduced AI-driven customer service robots but wanted flexibility as technology evolved. A five-year lease enabled them to upgrade every two years, keeping pace with AI advancements without unnecessary costs.
Case Study: Startup Gains Competitive Edge with Robotics Leasing
A startup in e-commerce fulfillment lacked the capital to invest in robotic packaging solutions. By securing custom financing, they leased robots to streamline operations and cut fulfillment time by 50%, allowing them to compete with larger firms.
Case Study: Aerospace Firm Uses Leasing to Adopt Next-Gen Robotics
A leading aerospace manufacturer needed precision robotics but faced budget constraints. A structured lease program enabled them to acquire the latest automation tools without compromising cash flow, improving production quality and reducing costs.
Interested in leasing robotics? Request a Free Quote today for a tailored financing solution!
