ROI Boost: Save Money with Automated Parcel Operations

What is ROI and How Does it apply to Parcel Automation?

Parcel automation is a key strategy for 3PL, distribution, and fulfillment centers to increase efficiency and reduce costs. Calculating parcel automation ROI is a quick and useful tool to check the efficacy of your efforts and see where to best spend your time and resources.

How to Calculate Parcel Automation ROI?

Calculating parcel automation ROI is similar to calculating ROI for any investment. You need to divide the net profit of an investment by its cost and then multiply the result by 100 to get a percentage. The formula for calculating parcel automation ROI is:

ROI = (Net Profit / Cost of Investment) x 100

There are many free online tools to help.

Parcel Automation Example

One of the most significant advantages of parcel automation is that it can increase ROI by reducing costs and increasing efficiency over time. For instance, let’s say a distribution center spent $100,000 implementing an automated parcel processing solution. They were able to increase their throughput and earn a net profit of $300,000. Using the formula, we get (300,000/100,000) x 100= 200%

When Parcel Automation ROI is Telling You It’s Time to Grow or Cut Back

Parcel automation ROI can be an indicator that it’s time to invest in growth. If the ROI for a particular investment is high, it may be a sign that the investment is paying off and that it’s time to expand. On the other hand, if the ROI is low or negative, it may be a sign that it’s time to cut back or reevaluate the investment.

Drawbacks to Parcel Automation ROI

While parcel automation ROI is a useful metric, it does have its limitations. For instance, it doesn’t take into account factors such as risk, opportunity cost, or the time value of money. In addition, parcel automation ROI can be difficult to measure accurately, particularly for investments that have long-term or intangible benefits.

Conclusion

In conclusion, parcel automation ROI is an essential tool for any 3PL, distribution, or fulfillment center looking to measure the profitability of its investments in automated warehouse solutions, material handling automation, automated conveyor systems, robotics in parcel automation, high-speed parcel sorting, automated labeling and scanning, parcel tracking technology, and automated packing solutions. By calculating parcel automation ROI, businesses can make informed decisions about where to invest their time and resources, reduce costs, and increase efficiency.

Learn more about Eii’s parcel automation solutions here.

Ready to take your 3PL, distribution, or fulfillment center to the next level with our industry-leading parcel automation solutions? Schedule a consultation with one of our experienced technicians today to learn more about how our fully automated and highly scalable solutions can help you reduce costs, increase efficiency, and streamline your operations.