Investing in Tech Is a Strategy, Figuring ROI Is a Strategic Tool
This short article by Jeff Reinert, president of Index Corp., outlines the multi-step process for justifying an investment in the latest CNC machining technology. Calculating the return on investment (ROI) is a useful step in this process, but only one of the factors a manufacturer must consider in the decision to buy a new machine. Read the article here.
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Why invest in new CNC technology that seems unfamiliar, even a little scary? Jeff Reinert says that a bold approach to justification can show shops that they need to jump in if they want to compete.
This short article by Jeff Reinert, president of Index Corp., outlines the multi-step process for justifying an investment in the latest CNC machining technology. Calculating the return on investment (ROI) is a useful tool, but only one of the factors a manufacturer must consider in the decision to buy a new machine.
Reinert identifies three main steps:
- Understand your machining costs and evaluate impact of a faster, more capable process.
- Understand potential benefits of the latest CNC technology (Reinert lists eight measurable ones as a start).
- Understand the costs of older equipment (including operator skills that may vanish).
After taking these steps, calculating ROI can be a concise and useful analysis to back up a decision. However, as Reinert explains, ROI is not the same as profitability and competitiveness. His advice puts the ROI calculation in perspective.
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