A realistic ROI example with outsourcing savings, extra revenue, operator and maintenance costs.
The most frequent question when deciding on a machine investment is: "How many months will this machine take to pay for itself?" The answer becomes clear once you account for the right items. The framework below applies to routers, plasma cutters and panel machines.
Income and saving items
- Outsourcing savings: How much of the cutting and processing you pay others to do will come in-house?
- Extra revenue: New orders you could not take without the machine. Multiply by gross margin, not by revenue.
- Waste savings: Reduced material loss with nesting.
- Shorter lead time: Reduces customer loss; hard to quantify but valuable.
Cost items
- Operator cost (including social security and benefits)
- Energy, consumables and tooling
- Annual maintenance (typically 1.5% – 3% of machine cost)
- Financing cost (interest) — should be evaluated separately
The formula
Monthly net contribution = outsourcing savings + (extra revenue × gross margin) − operator − energy − maintenance
Payback period (months) = machine price / monthly net contribution
An example
Consider a 1,850,000 TRY KR-1530 ATC nesting investment. Your monthly outsourcing cost of 140,000 TRY comes in-house, extra revenue is 90,000 TRY and gross margin 35% (31,500 TRY). One operator (42,000 TRY), energy and consumables 18,000 TRY, and maintenance 1,850,000 × 2% / 12 ≈ 3,083 TRY.
Monthly net contribution = 140,000 + 31,500 − 42,000 − 18,000 − 3,083 = 108,417 TRY. Payback is 1,850,000 / 108,417 ≈ 17 months; annual return is about 70%.
Sensitivity analysis
In the same example, if extra revenue halves (45,000 TRY), monthly net contribution falls to about 92,700 TRY and payback extends to 20 months. If outsourcing savings halve instead, net contribution drops to about 38,400 TRY and payback reaches 48 months. That is why entering your outsourcing cost accurately and with documentation is the most critical step of the calculation.
Things to keep in mind
- In the first three months, efficiency may stay at 60-70% because of the learning curve.
- Estimate capacity utilization realistically; the machine may sit idle during the month.
- Consider financing cost separately: total interest on a 24-month loan lengthens the payback period.
With the payback calculator on our site you can enter your own figures and try different scenarios. You can use the results as a summary to present to your bank or board.