How to Calculate Your Saving Power with AR-Optimized Upstream Processes in the Automotive Industry

May 8, 2023
Empower Frontline Workers

Just how much could your company potentially save by introducing AR-powered workflow  support in your logistic, 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 get a ballpark number for 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 carry with them jotting down relevant info. What if that same worker got hands-free, voice-controlled support that didn’t interrupt them in their workflow? Would it be fair to assume they could then handle 5% more units per day? What if that number was 10%?

Boxings being packaged and reviewed my workers with smart glasses

To get a good ballpark number for the type of savings you would be looking at here, do a calculation that factors in:

  • The overall cost point of your frontline team(s)
  • Efficiency of your current setup (number of units handled, e. g. average per worker per day)
  • Average monetary value per unit
  • Efficiency potential of an AR-powered workflow

The savings you experience through higher efficiency are mainly centered around a lower cost per unit handled because the same number of workers handle each unit faster.
One example: TeamViewer Frontline customer DB Schenker increased the speed of their automotive module assembly and line feed processes by 20% and while lowering their error rate to zero after introducing AR at their Wolfsburg plant. What would a 20% process speed increase mean for your company?

#2: Saving by reducing training costs with AR

How much time does it currently take you and your team to get a new hire up and running? Do you have an in-person trainer on-site for the entire onboarding and what does that cost you?

AR-powered workflow support is particularly effective when it comes to getting new hires onboarded fast. The instructions you would normally need a supervisor to give face to face can partially be automized and given directly via smart glasses – with the added option of providing suitable language options, demo videos, and the option for new hires to pause or repeat a step of the instructions to take it all in at their own pace.

Multiple workers connecting to a single expert via smart glasses

This is a major advantage to any type of industry that has a limited (and oftentimes shrinking) number of supervisors available because you don’t depend on the physical availability of an experienced worker to be able to start / continue the training of a new hire.

Here, your savings potential is centered around factors such as:

  • Average number of supervised training hours per new employee
  • Hourly supervisor wage
  • Cost per training hour per new employee
  • Expert’s travel costs, and possibly accommodation costs, for in-person onboarding

With a TeamViewer Frontline-based solution running on smart glasses, the training costs for frontline workers at NSF were reduced by 65%, while employee satisfaction with the training increased 83%.

What AR solution will suit my needs?

TeamViewer’s Frontline platform includes AR capabilities spanning both augmented and mixed reality devices, while supporting upstream and downstream use cases. AR-specific offerings include four main solutions within the Frontline platform:

xPick for inventory and picking

xMake for assembly instructions, QA, and training

xInspect for guided maintenance, service, diagnosis, and troubleshooting

xAssist for remote support, after-sales support, and live knowledge transfer

#3: Savings by boosting employee retention with AR

What is your current frontline worker churn rate? Another area where AR has demonstrated itself to be impactful in lowering costs is employee retention. Frontline workers can do their jobs with more ease when they don’t need to switch to and from a task in order to read instructions on a paper board or handheld device. They are empowered to switch from one type of workflow to another and to document issues or steps in a workflow with much greater ease. In short: they have better job support and because of that they are happier to stay in that position.

Workforce in a garage wearing smart glasses

To calculate the types of savings you’d be looking at here, factor in:

  • Administrative costs per new hire
  • Attrition rate per year
  • Attrition rate reduction with AR solution

TeamViewer Frontline customers from various industries report a very high level of user satisfaction for AR-powered workflows. For example, user satisfaction at Schnellecke Logistics hit 100%.

 

#4: Saving by reducing errors with AR

The more complex the environment, the more that can go wrong. Being in the automotive sector, you inevitably run up high costs, but this can be offset by high returns, positioning 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 close to zero?

Worker making a report that shows reduced manufacturing errors

If 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 no longer have to manually cross off items nor stop their workflow to handle devices. And it is a major gamechanger for them. So, it is worth looking into the savings potential of a significant error rate reduction when considering an AR investment. To estimate your saving potential, factor in:

  • Errors per 1000 units handled
  • Cost per error
  • Error per 1000 units handled with AR solution

TeamViewer Frontline customers in logistics report powerful results after implementing AR in their workflows. When fulfilling JIS and JIT orders, the top priority for Schenker Deutschland AG is high-speed accuracy. They managed to lower their error rate to zero with the combination of smart glasses running an industry-tailored AR solution.

 

Calculate your overall return on investment (ROI) for AR

Of course, you cannot realize any of the savings described above without an upfront investment in the hard- and software you would like to use to boost either up- or downstream workflows in your company. To get a rough idea of the costs you can expect, factor in the following:

  • Hardware costs
  • Software licenses
  • Service costs
  • Customer’s service costs

If you’d like a more specific idea of what the type of AR solution you have in mind would cost 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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