Requirements, Concept Selection & Early Economics

Turning the palletizing study into requirements a supplier can bid on (6 cases a minute, 44-pound cases, three pallet patterns, 15-minute changeover, works with the cardboard you actually buy), comparing four concepts from a lift table to a robot palletizer, and an early money screen: simple payback and five-year net present value worked for a $250,000 cell.

4 min
4 steps
3 questions
Lesson 68 of 78

In this lesson

Requirements with numbers
Four concepts
A first money screen
Stage the uncertainty

Requirements with numbers

The study from the last lesson becomes a requirements list: what the system must do, written so a supplier can bid on it and you can test it.

Requirement	Value	How it’s checked
Rate	6 cases/min sustained, 8/min peak	4-hour run at the end of the line
Case	20 kg, three sizes, corrugated from two suppliers	run all six combinations
Patterns	A, B, C; 8 layers max; 2 m max height	build a full pallet of each
Changeover	≤ 15 min between patterns, by an operator	timed by a trained operator
Mis-picks	≤ 1 per 2,000 cases	count over the acceptance run
Ergonomics	no manual lift over waist height or below knee	observation
Space	fits the existing 6 × 8 m area; forklift access on one side	layout check
Recovery	a jam cleared in ≤ 5 min without entering the robot’s space while it’s powered	timed test

Write what you need, not how to do it (“6 cases a minute,” not “a six-axis robot”), so suppliers can propose different solutions. And write the bad cases in: the crushed case, the late forklift, the second cardboard supplier.

Quick check

Which is a requirement a supplier can test?

Four concepts

Concept	What it is	Fits	Weak spots
Lift table and turntable	pallet rises and turns so every lift is at waist height	removes the worst lifts	person still lifts 44 lb 6 times a minute
Vacuum lift assist	an overhead hoist with a suction pad	removes the weight	slower; operator still walks and turns
Collaborative-robot palletizer	a small robot, often with area scanners instead of a fence	moderate rates, small footprint	payload and speed limits near the 20 kg case
Industrial robot palletizer	fenced cell with infeed conveyor and pallet stations	full rate with margin	cost, floor space, guarding

Score each against the requirements, not against how impressive it looks. Sometimes the lift table plus fixing the jams buys most of the benefit for a few percent of the cost, and the robot waits for the next capacity increase.

Cash flows for a $250,000 project returning $80,000 a year, with a cumulative line crossing zero at about 3.1 years and an NPV of about $69,000 at 8 percent over five years; and a sensitivity chart showing uptime, ramp-up, and volume move the answer most. — Payback, NPV, and which assumptions move the answer. Credit: StudyCorner diagram · CC BY 4.0 · Source

A first money screen

Before detailed quotes, a rough screen tells you whether to keep going. Suppose the industrial robot cell costs $250,000 installed and saves $80,000 a year in net cash (labor redeployed to other open jobs, overtime avoided, fewer injury claims, minus maintenance and power).

Simple payback: 250,000 ÷ 80,000 = 3.1 years.
Net present value at an 8 percent discount rate over 5 years: each year’s $80,000 is worth less the further out it is. The 5-year factor at 8 percent is 3.993, so NPV = 80,000 × 3.993 − 250,000 ≈ $69,000.

Positive NPV means the savings, valued in today’s dollars, beat the cost at that rate. Now vary the inputs: if the line runs fewer hours, if the ramp-up takes six months, if maintenance doubles. If one plausible bad case turns NPV negative, that’s what needs pinning down before you buy.

Quick check

A $250,000 cell saves $80,000 a year. What’s the simple payback?

Quick check

At an 8 percent discount rate over 5 years, the same cell’s NPV is about $69,000. What does a positive NPV mean?

Stage the uncertainty

Big unknowns get tested cheaply first. Will the robot’s gripper handle the soft cardboard? Send the supplier 50 real cases for a gripper test. Will operators accept it? Put a lift table in now and learn how the pallets actually get built. NIST’s robotics work exists partly so buyers and integrators can agree on measurable performance before money changes hands ¹.

Try it

Write eight requirements, with numbers and test methods, for automating the job you studied. Then do the payback and 5-year NPV at 8 percent for a concept that costs $120,000 and saves $35,000 a year.

Lesson complete

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Sources for this lesson

1
Robotic Systems for Smart Manufacturing Program. National Institute of Standards and Technology. verifiedMeasurement science, performance metrics, test methods, interoperability, planning, agility, and collaborative workcell integration. Cited at: requirements and validation.