ROI of Tool Intelligence — a worksheet for plant managers

Download the worksheet

• Download the ROI worksheet (.xlsx)

The worksheet template itself lands with the launch batch. Until then, the text below explains what the worksheet does and walks through the calculation manually so you can run the numbers on a notepad.

What the worksheet does

You type five numbers in. It returns a saving range and a payback period. No consulting call required to produce a directional number.

The five inputs:

1. Annual tool spend ($NZD). Invoices from your cutting-tool vendors over the last twelve months. Any tool that touches a workpiece counts — end-mills, drills, inserts, taps, reamers.
2. Machine count. Active CNC machines on your floor. Idle or decommissioned machines don't count.
3. Scrap rate (%). Your best estimate of rejected parts as a percentage of total parts produced. If you don't track this, use 4% (the typical NZ precision-shop average) as a placeholder.
4. Average part value ($NZD). What your median part sells for. Lets the worksheet convert scrap rate into dollar terms.
5. Toolroom headcount. Full-time equivalent people whose primary job is the crib. Includes supervisors and clerks.

The worksheet spits out:

• Low / mid / high annual saving estimate.
• Estimated payback period against Niyamis TMS's typical engagement cost.
• The specific line items driving each estimate — so you can cross- reference against your own financial model.

The math, explained

We're not trying to impress anyone. The model is a sum of four addressable savings, each applied conservatively to your inputs.

1. Brand-switching savings

Niyamis TMS's Brand Scorecard typically surfaces 8–15% savings on tool spend within six months of full deployment, by shifting PO volume from cheaper-on-paper brands to cheaper-per-part brands. The mid-case applies 10% against your annual tool spend.

Example: annual tool spend $420,000 → mid-case saving $42,000.

2. Scrap reduction from anomaly detection

Shops running TMS typically see a 0.5–1.5 percentage-point reduction in scrap rate within three months, once machine-specific and operator- specific patterns surface and get addressed. Multiply that delta against your part count and average part value to get the scrap saving.

Example: 50,000 parts/year at $120 average value, scrap rate 4% → 3% saves 500 parts × $120 = $60,000.

3. Stockout cost avoidance

Each stockout that halts a machine costs roughly the machine's loaded hour rate × the hours halted × the number of stockouts per year. TMS shops typically reduce stockouts by 60–80%. The worksheet uses a loaded rate of $180/hour NZD per CNC (you can override).

Example: 12 stockouts/year × 2.5 halt hours × $180 × 0.7 reduction = $3,780/machine × your machine count.

4. Toolroom productivity recovery

TMS's alert inbox and automated PO workflow typically recover 3–5 hours per week per toolroom FTE in reactive time. At an NZ loaded rate of roughly $55/hr, that's $7,150–$11,900 per toolroom FTE per year.

Example: 2 toolroom FTE × 4 hours × 46 weeks × $55 = $20,240.

Add them up, apply a 25% confidence haircut, and you get the mid-case saving. Low-case is 60% of mid. High-case is 140% of mid.

What the worksheet is — and isn't

Is: a fast sanity check for a plant manager who's been asked to find tool-spend savings this quarter.

Isn't: a guarantee. Every number above is derived from the shops we've worked with, who all had enough transaction hygiene to measure before and after. If your shop's crib is on paper and your SCRAP notes live in a manila folder, the savings are there but the measurement won't be clean until six weeks into the Deploy phase.

If the worksheet says Niyamis TMS makes sense — what next?

1. Book a thirty-minute discovery call. Philippe walks through the worksheet's output on your real numbers.
2. If the numbers still make sense after that call, Niyamis quotes an engagement. We shape the cost around your fleet size and the engagement we're deploying — so the proposal you get is specific to your shop.
3. The Diagnose phase is two weeks. At the end of it, you have a baseline measurement and a go/no-go decision on deploying. If TMS isn't the right fit, we tell you — and the Diagnose work still leaves you with a scorecard of your current toolroom state.

— Philippe, Niyamis