The 90-Day Post-Installation Review: Did Automation Deliver?

Most automation decisions are judged once, before the purchase. The business case is approved, the machine arrives, and nobody compares the promised results with the real ones. The decision question here is whether the installation is delivering what the case assumed, and what the plant should change, in the line or in its next business case.

The short answer: hold a structured review about 90 days after the line runs, using a table that puts each business case assumption next to the measured result. Recalculate annual benefit and payback on actual figures, separate one-off problems from structural ones, and file the result with the original case.

Why 90 days

Ninety days is a convention, not a law. It is long enough to get past the first ramp-up weeks, when operators are learning and small faults are still being fixed, and long enough to see a pattern across several production runs. It is short enough that the people who wrote the business case still remember its assumptions.

A second review at 12 months is sensible. It captures seasonal volume, a full maintenance cycle and the effect of any fixes made after the first review. The 90-day review is a first checkpoint, not a final verdict.

Prepare before installation

A review is only possible if two things were recorded before the machine ran. Without them, people compare results with memory, and memory drifts toward whatever is convenient.

• Freeze the business case. Copy the assumptions into a dated document: installed cost I, each component of the annual benefit B, volumes, planned productive hours, labor rates, planned reject rate and planned staffing. Do not edit it afterward.
• Record a baseline from the old process. Measure output per hour, reject rate, changeover time, downtime and the labor actually used, for a few representative weeks. The old process is the reference for “saved”.

The formulas stay the same as in the payback, ROI and TCO article.

B = actual cash labor savings
  + other actual cash savings
  + achievable, non-duplicated new contribution
  - new annual cash operating costs

Payback (years) = I / B, only when B > 0
Payback (months) = years x 12

The review table

Use one table, one row per assumption. Columns: business case, actual (90 days, annualized), variance, and a short explanation. The explanation column matters most, because a variance with no cause cannot be acted on.

Row	What to enter
Installed cost	Planned I against the final invoices, including installation, site work and training
Productive hours	Hours the machine actually produced, annualized
Good output per hour	Good units per productive hour, measured, not the rated speed
Reject rate	Rejected units as a share of units made
Changeover time	Average minutes per product change, and the number of changes
Unplanned downtime	Hours stopped without a plan, and the main causes
Labor cash savings realized	Cash that actually stopped leaving the company, with the mechanism: attrition, ended contract or avoided overtime
New costs	Maintenance, energy, consumables and technician hours
Annual B, recalculated	Components above combined with the B formula
Payback, recalculated	I actual divided by B actual, in years and months

On the labor row, name the mechanism. Hours freed but redeployed are capacity, not cash, as explained in labor savings versus redeployment. If the case claimed a cash saving and the reviewer cannot point to a payroll or invoice line that fell, record the variance in full.

How to annualize 90-day data

Thirteen weeks of data cannot be multiplied by four without care. The first weeks usually include learning and fixes that will not repeat, so a straight multiple understates the steady state. Ignoring them completely can flatter the result.

The honest approach is to show both. Report the full 13-week figure annualized, then the figure for the steady weeks (for example weeks 5 to 13) annualized, and say which weeks were excluded and why. Treat ramp-up as a one-off cost, not as part of the annual run rate, but do not hide it. If a metric is seasonal, say so and wait for the 12-month review.

Worked example

Illustrative numbers, not a quote, benchmark or customer result.

The example uses the same case as the rest of this site: I = $60,000, labor cash savings of $24,000 per year, maintenance and energy of $6,000 per year, so B = $18,000 and payback is 60,000 / 18,000 = 3.33 years, or 40 months. The plan assumed 2,000 productive hours per year. Assume 800 labor hours were to be freed, which is 0.4 labor hours per productive hour (800 / 2,000), at $30 per hour.

For productive hours, the first four weeks were ramp-up. The machine produced 340 hours in 13 weeks, of which 294 were in weeks 5 to 13. Annualized, the full period gives 340 / 13 x 52 = 1,360 hours. The steady weeks give 294 / 9 x 52 = 1,699, rounded to 1,700 hours. This example uses 1,700, and shows the 1,360 figure as the pessimistic reading.

Row	Business case	Actual (annualized)	Variance	Explanation
Installed cost	$60,000	$66,000	+$6,000 (+10%)	Added site work and a delayed start; one-off
Productive hours	2,000	1,700	-300 (-15%)	Slow changeovers and more stoppages than planned
Labor cash savings	$24,000	$20,000	-$4,000	One role redeployed, so its wages still count
New costs (maintenance, energy, consumables, technician)	$6,000	$6,500	+$500	Higher technician hours during early months
Overtime covering lost machine hours	$0	$3,600	+$3,600	300 shortfall hours x 0.4 x $30
Annual B	$18,000	$9,900	-$8,100 (-45%)	Sum of the lines above
Payback	40 months	80 months	+40 months	See arithmetic below

The overtime line is the cost of covering the machine’s missing hours by hand: (2,000 - 1,700) = 300 hours, times 0.4 labor hours per productive hour, gives 120 labor hours, times $30, gives $3,600. The $20,000 labor line already reflects the redeployed role, so the two items are separate.

First recalculation, on actual figures:

B = 20,000 - 6,500 - 3,600 = $9,900 per year
Payback = 66,000 / 9,900 = 6.67 years
Payback in months = 6.67 x 12 = 80 months

The B gap checks out: -4,000 (labor) - 500 (new costs) - 3,600 (overtime) = -$8,100, and 18,000 - 8,100 = 9,900.

Second recalculation, assuming the productive hours problem is fixed and the machine reaches 2,000 hours. The overtime line drops to zero. Everything else stays at actual values.

B = 20,000 - 6,500 - 0 = $13,500 per year
Payback = 66,000 / 13,500 = 4.89 years
Payback in months = 4.89 x 12 = 59 months

Fixing the hours shortens the payback from 80 to 59 months, but it does not return it to 40. The remaining gap comes from the higher installed cost, the redeployed role and the higher running costs. If the full 13-week reading (1,360 hours) were used instead, the shortfall would be 640 hours and the overtime line would be 640 x 0.4 x $30 = $7,680, so B would be 20,000 - 6,500 - 7,680 = $5,820 and payback 66,000 / 5,820 = 11.34 years, about 136 months. That is why the choice of annualization must be stated.

Reading the variances

Sort each variance into one of two groups.

• One-off. Installation delays, a late spare part, a start-up fault that has been repaired. These belong in installed cost or in the ramp-up allowance, and should not be projected forward.
• Structural. A volume assumption that was wrong, rated speed used in place of measured speed, a labor saving that depends on a role that will not be cut. These persist unless something changes.

For each structural variance, record an action and an owner with a date. Typical actions are operator training, a maintenance schedule, a production schedule that groups similar products, or a process change upstream. See why faster machines do not always increase line output when the machine is waiting on another station, and measuring the cost of unplanned production downtime when stoppages are the cause.

Lessons for the next business case

The review is also the best input to the next proposal. Write down what the next case should do differently:

• Add a ramp-up allowance, in weeks and in cost.
• Use measured speed from your own line, not rated speed.
• Budget installed cost with site work and training, as in the true installed cost of packaging automation.
• Name the labor saving mechanism, or count the hours as capacity.
• Test the productive hours assumption against order volume, as shown in how equipment utilization changes automation payback.

Who attends, and how to keep it factual

Invite the person who wrote the business case, the finance reviewer, the production or line supervisor, maintenance, and someone who ran the old process. People closest to the line often know why a number moved.

Keep the meeting blameless. The aim is to explain variances, not to assign fault, and a poor result is useful information. Bring data, not opinions, and ask what the record shows before asking why. File the completed table with the original business case, so anyone who reads one finds the other.

Results from your own reviews

Results from your own installations are the best data you will have for future decisions, because they reflect your plant, your products and your people. Any worked example on this site, including this one, is illustrative unless it is explicitly marked as an authorized real case. Calculators are in preparation and will be published only after testing.

Keep reading

• How Equipment Utilization Changes Automation Payback: shows how productive hours move payback, which helps when the review finds a shortfall.
• Why Faster Machines Do Not Always Increase Line Output: explains how to check measured speed against line bottlenecks.
• The True Installed Cost of Packaging Automation: lists the cost items that often explain an installed cost variance.

Assumptions and limits

• The example is invented for illustration. It is not a case study and does not describe any real installation or customer.
• Annual benefit is treated as steady, so taxes, financing, depreciation and the time value of money are ignored.
• The 90-day window and the choice of ramp-up weeks are conventions, and seasonal products need the 12-month review.
• Reject rate, changeover time and good output per hour are reported but not priced separately in the example, since they act through productive hours here.
• Residual value, useful life and wage growth are left out.
• The review supports comparison and does not replace financial, legal, safety or engineering review. For how this site handles its analysis, see the editorial policy.