The Case for Financing Automation Investments
 
 
The primary reason for the financing of automation investments is the highly profitable labor savings created by the automation itself.  These savings are dividing the CM industry into two separate camps.  The automated plants are saving on labor costs every month, permitting them to reduce prices while increasing margins.  The plants who have not yet automated are finding it harder to compete.
 
The funds invested in automation are paid back through substantial labor savings and increased productivity.  The length of this payback period depends on individual equipment and operations, but a typical period ranges from 10 months to 3 years.  MiTek reps can help component manufacturers to calculate their own payback scenarios.  After the investment has been paid back, the subsequent savings accumulate as ongoing profits for the component manufacturer.
 
By financing the automation investment, the component manufacturer retains control of important capital reserves which may be needed for contingencies in an uncertain housing market.  Since repayments are simple and predictable, their effect on the company‚Äôs balance sheet can be calculated in advance, allowing for easier planning.
 
 
 
 
 
 
 
 

 This page last modified on 1/4/2008