TCO in Intralogistics: Operating Costs Determine ROI

Investments in automated intralogistics systems – from automated guided vehicles (AGVs/AMRs) to automated storage and retrieval systems (AS/RS) to stationary robots and conveyor lines – are often judged based on acquisition costs. But the business case for such technical assets depends critically on ongoing operating costs over the entire lifecycle. Maintenance, servicing, service contracts, software updates and energy consumption can add up to considerable sums over the years and drive up Total Cost of Ownership (TCO). Neglecting these factors easily leads to overly optimistic payback calculations. Studies therefore emphasize that lifecycle costs – i.e. all costs from installation to decommissioning – must be considered early on. In practice, decision-makers increasingly rely on such holistic assessments: In an international survey, 86% of companies cited system reliability and TCO including maintenance costs as "very important" for automation decisions.

In the following sections, we attempt to analyze in detail how maintenance, service, updates and lifecycle measures influence the business case for intralogistics systems. Different asset types – mobile robots (AMR/AGV), automatic storage systems, stationary robotics and conveyor technology – are compared over their entire lifecycle. Concrete metrics, tables and case studies illustrate the cost structure and should help with evaluation.

Lifecycle Perspective: Cost Factors and Phases

An intralogistics system goes through several lifecycle phases – from planning and acquisition through operation and maintenance to potential modernization or decommissioning. Each phase brings specific cost categories that must be factored into the business case:

• Acquisition and Implementation (CapEx): One-time investments for hardware, software, installation and integration into the existing warehouse. These initial costs can vary greatly depending on the technology (from five-figure amounts for individual robots to million-euro investments for complex systems).

Example: A simple automated guided vehicle (AGV) costs approximately €35,000–45,000 per vehicle to acquire, while an automated high-bay warehouse quickly reaches >€1 million. In addition, integration efforts amount to about 20–30% of the system costs to integrate the system into processes and IT.

• Ongoing Operations (OpEx): This includes maintenance and servicing, energy consumption, personnel and service costs, software licenses and updates/upgrades:
• Maintenance & Servicing: Regular inspections, preventive maintenance, lubrication, spare parts and repairs for failures. Annually, approximately 5–15% of the original investment value is required here, depending on the system type. Automated systems usually require more intensive maintenance than manual ones. Maintenance contracts with manufacturers or service providers (for e.g. 24/7 service and defined service intervals) can support and even cover these tasks, but also come with ongoing fees.
• Energy Costs: Automated systems require electricity for drives, controls, sensors and IT infrastructure. A fully automated warehouse typically consumes 15–25% more energy than a manual one – partly because conveyors, shuttles or robots are continuously in operation. Electricity costs (including charging power for battery-operated robots) have a significant impact on annual operating costs, especially in regions with high electricity prices.
• Software, IT and Updates: Every automated system includes software (WMS/WCS, fleet management, control systems). License fees and support contracts are usually annual. Depending on the size and complexity of the warehouse, €10,000 to €50,000 per year can be budgeted for software licenses and updates alone. Additionally, regular updates (for performance improvements or security updates) are necessary; major upgrades to control software or firmware may also be chargeable during the lifecycle.
• Personnel and Training: Even automated systems require personnel – albeit in changed roles. Instead of many warehouse workers, technicians for maintenance and system administrators are needed. Personnel costs thus shift partially from operational handling to technical support. Either in-house maintenance personnel are trained (costs for training, knowledge building) or external specialists are contracted (service agreements). These indirect personnel costs are part of operating costs and should be considered in the business case.
• Unplanned Downtime: Despite preventive maintenance, system shutdowns can occur – due to technical failure or software errors. Downtime causes high indirect costs: production or shipping delays, penalties for late delivery, inefficient emergency processes and possibly overtime to catch up. Studies estimate the costs of unplanned downtime in industry at an average of €260,000 per hour. While such extreme values are industry-specific (automotive manufacturing vs. warehouse), even short failures in distribution centers can be expensive. The business case should therefore include a risk assessment of these costs – and investments in high system availability (e.g. redundancies, maintenance strategies) should be viewed as insurance-like benefits.
• Service Life, Modernization and End-of-Life: Intralogistics assets have limited technical service lives. Typical usage periods are e.g. ~10–15 years for conveyor technology and robots and 15+ years for racking systems, while mobile robots may be replaced or upgraded after only 5–7 years (particularly due to battery aging or technological advances). Towards the end of their service life, failure frequency and maintenance costs usually increase further. Companies then face the decision: replacement investment (new purchase) or retrofit. Retrofit measures – i.e. modernization of existing systems (such as replacement of controls, motors or software updates) – can extend the service life by several more years. This allows investment costs to be stretched and the ROI of the original system to be improved. However, a retrofit itself involves significant costs. The business case should therefore include early provisions or planning for possible lifecycle measures (retrofit/replacement).

In summary, total costs over the lifecycle consist of a combination of initial expenditure and ongoing operating costs. Depending on the cost structure of the system, ongoing expenses can exceed initial costs.

Example: With maintenance costs of 10% of the investment sum per year, they add up