How to Measure Return on Investment in Automated Test Equipment

  • Investopedia defines ROI as a performance measure for evaluating efficiency of an investment.

    ROI = (Gain from Investment – Cost of Investment)/Cost of Investment.

    However, I must say that this might be an oversimplification.

    When it comes to automated test equipment, return on investment has multiple components.

    I remember walking through production lines of various manufacturers and watching technicians taking many measurements and capturing them onto hand-written reports to be complied and analyzed in support of quality control efforts.

    The immediate question in my mind is: “how easy are we making this data to be useful?”; are we collecting data just for the sake of having data? Or do we really want to learn something from it?

    What is often missed is that at some point you jeopardize the validity and efficacy of such tests by the fact that they are being performed manually. Additionally, there is no real-time feedback. The data often takes months to be complied and digitized.

    Other considerations are as follow:

    1. At one level, obviously, ATE free up operators to pay attention to the important issues and streamline the flow of production.
    2. Use of ATE adds to the value of the product manufactured. This is presentable data to customers that can add confidence in the product and hence to the manufacturer.
    3. Use of ATE makes it possible to have real-time feedback in manufacturing process. This allows issues to be resolved before they get out of hand and hence improves the quality of the product made.
    4. And, last but not least, use of ATE helps in creating and maintaining a vibrant workplace. Often tasks that can be done by ATE are time-consuming and error prone if done by people. When you eliminate these mundane tasks from the list of things operators need to do, you are helping them grow and be more effective team players.

    All these factors need to come into play when evaluating automating a test process. Tools such as LabVIEW can often be used in creating vibrant user interfaces and expressive reports. A multidisciplinary approach to providing an integrated mechanical, electrical and software solution can make the difference in receiving the highest return on your investment.

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