Just how much could your company save by introducing AR-powered workflow support in your logistics, inspection, or assembly processes? What would happen if your teams went from workflows supported by error-prone paper lists or unwieldy handheld scanners to hands-free, voice controlled step-by-step guidance? Here’s how to estimate your saving potential and ROI for an AR investment [by Stinne Mattle].
#1: Savings through AR efficiency gains
Are you managing a team of frontline workers that package and ship car components, perform car inspections, or assemble essential car parts? Is one of your goals to save money by increasing the overall efficiency of your team?
Start by looking at how many units an average frontline worker can package, inspect, or assemble per day in your current setup. Maybe you work with a paper-based list that describes a workflow or maybe your workers have a tablet that they use to jot down relevant info. What if that same worker got hands-free, voice-controlled support that didn’t interrupt their workflow? Would it be fair to assume they could handle 5% more units per day? Or even 10%?
To estimate your potential savings, make sure to factor in:
- The overall cost point of your frontline team(s)
- The efficiency of your current setup (number of units handled, e.g., on average per worker per day)
- The average monetary value per unit
- The efficiency potential of an AR-powered workflow
TeamViewer Frontline customer DB Schenker increased the speed of their automotive module assembly and line feed processes by 20% and lowered their error rate to zero after introducing AR at their Wolfsburg plant. What would a 20% process speed increase mean for your company?
AR enables your workers to process a larger number of units within the same amount of time, lowering the average cost per unit handled and ultimately improving your bottom line.
#2: Saving by reducing training costs with AR
How much time does it take to get a new hire up and running? Do you have a trainer on-site for the entire onboarding process and what does that cost you?
AR-powered workflow support is particularly effective when it comes to onboarding new hires fast. Automize instructions that would normally be given face-to-face by an instructor and transmit them directly via smart glasses – with the additional advantage of providing suitable language options, demo videos, and the possibility for new hires to hit pause or repeat and take it all in at their own pace.
This is a major advantage if you have a limited (or even shrinking) number of supervisors available because the training of a new hire is no longer dependent on the physical availability of an experienced worker.
Here, your savings potential is linked to:
- The average number of supervised training hours per new employee
- The hourly supervisor wage
- The cost per training hour per new employee
- Travel costs, and possibly accommodation costs, for in-person onboarding
With a TeamViewer Frontline-based solution running on smart glasses, NSF was able to reduce training costs for frontline workers by 65%, while at the same time improving employee training satisfaction by 83%.
#3: Savings through improved employee retention
What is your current frontline worker churn rate? Another area where AR has demonstrated itself to be impactful in lowering costs is employee retention.
Carrying out operational tasks can be cumbersome if workers are required to go back and forth between their tasks and instructions displayed on clipboards or handheld devices. AR lets frontline workers do their jobs with ease, executing and documenting different types of workflows with no interruption. In short: workers with tools that help them work efficiently are more likely to be happy at their jobs.
To calculate these savings, factor in:
- Administrative costs per new hire
- The attrition rate per year
- The attrition rate reduction with an AR solution
TeamViewer Frontline customers from various industries report a very high level of employee satisfaction with AR-powered workflows. For example, user satisfaction at Schnellecke Logistics hit 100%.
#4: Savings through reduced error rates
The more complex the environment is, the more that can go wrong. Being in the automotive sector, high costs are inevitable. But this can be offset by high returns which positions you in a complex value chain. What is your current error rate and average cost per error? And what would happen if you could lower that rate to almost zero?
When workers switch from paper-based checklists or handheld devices to AR-powered workflow support on smart glasses, one of the most immediate effects reported is a lower error rate. Workers must no longer interrupt their workflow to manually cross off items or handle additional devices. This enables them to carry out their tasks with more concentration and thus more precision. As a result, the savings potential of an error rate reduction when investing in AR is significant.
To estimate your saving potential, factor in:
- The number of errors per 1000 units handled
- The cost per error
- The number of errors per 1000 units handled with AR solution
TeamViewer Frontline customers in logistics report powerful results after incorporating AR in their workflows. When handling JIS and JIT orders, the top priority for Schenker Deutschland AG is high-speed accuracy. They managed to lower their error rate to zero by introducing smart glasses running an industry-tailored AR solution.
Calculate your overall return on investment (ROI) for AR
To achieve the savings described above, an upfront investment in AR technology is necessary. To estimate the cost of this investment, factor in the following:
- Hardware costs
- Software licenses
- Service costs
- Customer’s service costs
If you’d like more specific information on the cost of the type of AR solution you have in mind and when you can expect to see a return on investment (ROI), get in touch with one of our AR experts via this form.
Based on your unique business case, we can help you crunch the numbers and share tips on suitable hardware to go with your AR solution.
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