ROI – more than just cost savings

Return on investment (ROI) is about more than cost savings. It includes flexibility, reliability and the ability to maintain operations during labor shortages or seasonal peaks. “In some industries, you simply can’t hire enough people anymore,” says Riku Puska, warehouse and distribution industry sales manager at Cimcorp Group. “So the question isn’t ‘can we afford automation?’, it’s ‘can we afford not to?’ In these cases, automation becomes essential not only to maintain efficiency but to protect business continuity and customer loyalty.”

More than a price tag: the bigger picture of ROI

The cost of automation depends on many factors such as warehouse size, processes, level of automation and existing infrastructure. While the initial capital expenditure (CAPEX) can appear high, it’s only part of the equation. A clear understanding of ROI reveals a broader value: automation increases output, reduces labor dependency, improves picking accuracy and enhances product quality through advanced checks.

Beyond these operational gains, many businesses also experience fewer order errors, lower return rates and higher customer satisfaction: factors that are harder to quantify but just as critical to business growth. These benefits directly impact the bottom line but also support brand strength and market share over time.
 
“Reducing costs matters, but the real value lies in building more intelligent, resilient and future-ready operations,” says Mikko Kumpulainen, fellow warehouse and distribution industry sales Manager at Cimcorp. “Automation lets you plan ahead with confidence and reduce the daily firefighting that comes with manual work.”

A strategic investment

As stated, automation can be a necessity rather than a choice. Labor shortages, especially during peak demand periods, can lead to empty shelves, lost sales and frustrated customers. If stores can’t stock key products, shoppers quickly turn to competitors. For many companies, reducing costs is only one part of the goal. Equally important are ensuring business continuity, protecting customer relationships and enabling future growth.

“If you can’t staff your peak days, you’re not just losing sales, you’re handing your customers to the competition,” emphasises Puska. “In that light, automation isn’t about ROI alone. It’s about survival and smart growth. Automation helps businesses stay ready and relevant.”

While ROI varies, companies typically see returns within 4 to 14 years, depending on project scope and strategic priorities. Larger systems often yield stronger efficiencies but require more upfront investment, while smaller setups are easier to start with but may take longer to pay back.

Moreover, automation shouldn’t be viewed as an all-or-nothing investment. Modular solutions allow businesses to begin with a smaller scope, such as two automation modules, and expand over time. This phased approach offers early wins, cost efficiency and a scalable roadmap.
 
“A smaller system can be a smart starting point,” says Kumpulainen, “especially if it’s designed to scale. You get early results and a long-term plan in one.”

Building a strong business case

A strong business case is the starting point for any successful automation project. The process begins by understanding the current situation: where is time, labor or accuracy being lost? By establishing a clear baseline and identifying pain points, companies can better estimate the potential benefits. These might include faster order processing, fewer picking mistakes or improved productivity. Translating these improvements into measurable outcomes helps justify the investment both financially and strategically.

Operational costs (OPEX) also play a key role in ROI. These include ongoing expenses such as system maintenance, support staff and service needs. While automated systems may require a higher upfront investment, they offer substantial OPEX savings compared to manual systems, particularly in areas critical to freshness, labor efficiency and energy management. They don’t slow down during peak times, require less supervision and eliminate the cycle of constant hiring and training.

For example, in fresh food warehousing, automation offers significant OPEX savings by reducing labor costs, optimising cold storage usage, increasing throughput, improving accuracy and minimising product waste. It also supports efficient inventory management, enhances traceability and reduces downtime. These benefits translate into scalable ROI, making automation a compelling investment for businesses aiming to improve efficiency and profitability.

A business case does not need to be perfect. It just needs to show how automation supports the company’s goals, whether that means scaling, improving supply chains or staying competitive. The right partner can help analyse operations, estimate ROI and develop flexible solutions that align with long-term business needs.
 
“Customers don’t just need automation, they need a roadmap that fits their business,” explains Kumpulainen. “At Cimcorp, we work closely with customers to define what success looks like and how to reach it, step by step.”

Investing in the future

When guided by clear goals and the right expertise, automation becomes a long-term strategic advantage. It is a forward-looking decision that strengthens operations, supports growth and secures business continuity. Companies that look beyond short-term returns and align automation with their broader objectives are the ones most likely to thrive.

“For those who start in a smart way, build a strong business case and partner with the right experts, automation lays the foundation for a more resilient and competitive future,” concludes Puska. 

cimcorp.com