The business case is engineering. You build it from confirmed inputs, the same standard you would hold for a belt speed. Model annual savings from labor, chargebacks, and throughput, then measure it against the customer's own payback threshold, not an industry number that does not exist.
This implements Lesson 29, The Business Case. Open it side by side: Lesson 29. Simple payback is total investment over annual savings. Every dollar that feeds it should be confirmed with the customer in writing before it goes in the model.
Labor is usually the primary savings driver. Value the positions the system removes or redeploys at the fully loaded cost per position, across the hours that actually run. Fully loaded means wages plus the burden on top of them, not the offer-letter number.
Annual savings is not one number the customer hands you. You model it from three sources and confirm every one. Count throughput only where the added capacity converts to revenue or avoided overtime. If the extra cartons per minute do not turn into money, they do not belong in the savings number.
Simple payback is total investment divided by annual savings. ROI here is the simple annual return, the reciprocal of payback. Measure both against the customer's threshold, a number they set from their own cost of capital.
Tom Ruiz, Riverside's VP of Finance, approves capital on a three-year payback. That three years is Riverside's own capital hurdle. It is not an industry law, and treating it like one is how you get caught by the one person in the room whose job is knowing better. Use it here as Riverside's example, and find each customer's own number the same way.
Riverside's throughput headroom, the room between 18 cartons per minute today and the 20 CPM design target, only counts as savings if the customer can tell you it converts to revenue or avoided overtime. The headcount, the fully loaded rate, and the chargeback cost per incident are all confirm-with-the-customer-in-writing items, never numbers you assume.
An unusual product at a small fraction of volume can drive the size, speed, and cost of the whole system. Name it in discovery, price it both ways, and let the customer make the call. That decision is theirs, not yours.
| Include the outlier | Exclude the outlier |
|---|---|
| System handles everything the customer ships today. | System is optimized for the core volume that carries the operation. |
| No manual exceptions for the customer to manage. | System may be smaller, faster, or less expensive. |
| Cost reflects the full product range. | The outlier gets a documented manual exception path, which someone has to design and run. |
When the design is not yet drawn both ways, an early estimate is enough. A per-foot price difference between two conveyor widths starts the conversation and saves you from drawing the system twice. Raise it in discovery, not for the first time at the proposal review. The proposal is a confirmation document. It should never spring a new cost driver on the customer.