Measuring the benefits and ROI of VR

October 2, 2018

The VR Intelligence organisation recently observed in their 2018 survey report that one of the main limits for companies to adopt VR was the lack of use cases and absence of ROI statistics. Now that Gartner has officially declared VR a mature industrial technology, it is time to highlight real-life ROI numbers.

Stats on ROI can be hard to find for several reasons. First of all, a lot of companies don’t measure their ROIs. These stats can be difficult to calculate and are sometimes quite abstract. How do you evaluate the cost of not making a design error? However, every time we show companies some ways to measure ROI, they always end up concluding: “we have to find out how much time and money VR technology could save us!”. At this point, they realized that not using VR is actually costing them a lot of money. Sometimes, not doing anything is the bad solution.

Some companies with wise financial departments do measure ROIs. The interesting part is that only few of them accept to release them publicly. Indeed, the numbers are frequently very high. VR is often too much of a competitive advantage to disclose these numbers to potential competitors.

For this article, we gathered some official statistics showing how beneficial the use of VR can be to the industry. The first statistics are focused on the amount of time and money your company can directly save by adopting VR, for example during the prototyping process and ergonomic assessment. At the end, you will find our method to help you measure your ROI on your own.

VR benefits on projects duration and budget

According to Capgemini’s 2018 report on immersive technology, at least three in four companies with large-scale AR/VR implementations attest to have operational benefits of over 10%. One of the main ROI of VR is definitely the reduction of projects duration and budget.

For instance, the CNES, the French national space center, claimed to have won around 12 months on a 4 years project thanks to virtual reality. Using VR instead of their CAD software on a 2D screen helped them reduce the project duration by 25%.

In less than a year, Safran Nacelles earned a 300K€ return on investment, for a single VR system. The French company stated that VR allowed them to develop new nacelles in only 42 months (previously 60 months). Safran Nacelles was also able to end a project 8 months ahead of an 18-months schedule (56% time reduction), saving 40% of their budget.

The automotive field also greatly benefited from virtual reality. Renault saves 2M€ per year by using VR and reduced the conception time of theirs cars by 20%. The company Jaguar Land Rover also stated that VR helped them save 4M€ in only 5 weeks.

In their article, NVidia, the 3D graphics cards manufacturer, states that “projects that fully integrate VR technologies are seeing a 60-65% reduction in the number of design issues“, avoiding time and cost overruns. According to NVidia reports, virtual reality helps reduce the product’s conception time by three. VR also leads to a 25% to 40% reduction of the production global cost.

Lockheed Martin, the American aerospace, defense and security company, uses VR in their Collaborative Human Immersive Laboratory (CHIL) to evaluate designs, allowing them to save around 10 million dollars per year.

Less prototypes needed

VR has the magical ability to reduce the number of physical prototypes you need, lowering the duration of their production and increasing their quality. For example, SEAT used VR to reduce the time to produce a prototype by 30%. The company also reduced the number of physical prototypes produced by 50%.

SEAT stated that “Industrials from a broad range of sectors, including car manufacturer and the airplane industry, witnessed on average that a product development requires 4 times less physical prototypes”.

A virtual mannequin to make ergonomic assessment easier and more efficient

Thanks to the use of virtual mannequins, VR is a great tool for ergonomic assessment of work environments. We will publish another article focused on this subject later, but we can already give you an interesting number. Indeed, thanks to this technology, Ford reduced the rate of employees injuries by 70% and lowered ergonomic issues by 90%. It definitely led to a great saving on time and budget.

Methodology: how to measure the benefits of VR

VR has an impact on many different aspects of a product development. Here are some examples that can help you measure your own ROIs.

Optimize the design phase

When a design error is detected, you have to measure the time spent by your team fixing the issue, creating a new design, testing it, validating it again and doing multiple iterations. It should be quite easy to compute the cost of this error by adding up the salaries of all the engineers and the cost of potential new physical prototypes. Keep in mind that this can cause the project to fall behind schedule, potentially causing overrun fees and possibly impacting the production line and final delivery to the client.

change layout of factory with improov

Optimize your processes

Regarding manufacturing, VR can be used to simulate the installation of new equipment. The time saved by this simulation will make the factory line productive earlier. VR can also be used to train operators on production lines before they are even installed. Operators can then be efficient as soon as the lines are ready. The benefits depend on your activity, but being able to produce earlier is often critical. You can also lower the cost of installation by reducing the time needed by your team to set up the factory lines.

Better train your teams

Thanks to virtual reality, you don’t need to stop the production line for training anymore. You can practice in VR and push the limits of the real life training by simulating rare or dangerous issues. Some situations are indeed impractical or too costly to reproduce. Your financial department probably knows the cost of stopping a production line.

Save costs on sick leaves by better preventing MSDs

VR can also be used to simulate the operations on factory lines to optimize the processes. It is definitely a key point to save as much time as possible on repeating operations. Evaluating and correcting ergonomic issues for your operators will save you the cost of sick leaves due to MSDs (Musculoskeletal Disorders), like articulation and back problems.

Preserve the reputation of your company

The reputation of the company may also be affected by design errors. Indeed, delivering a product that either does not match the client expectations or that is potentially over budget and behind schedule is catastrophic for the commercial relationship. By allowing you to detect design errors earlier, VR helps you avoid losing time and money but also preserve the reputation of your company.

VR teleconferencing software are not the future: they are the present

The industry has been using VR and virtual prototypes for more than twenty years with a proven ROI. Those technologies are at the heart of the Industry 4.0 to create Smart Factories. Your competitors are probably already using those digital twins right now, giving them an incredible boost in productivity and quality.

For instance, companies like NasaGeneral ElectricL’OrealNaval Group or PlasticOmnium are using Improov, the leading VR teleconferencing software for CAD teams, everyday.

Contact us for an evaluation today!

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