Maintenance Cost or Total Cost of Ownership? A TCO Perspective
Maintenance cost shows parts, labor and service spent in a certain period. The total cost of ownership (TCO) evaluates the effects of investment, operation, energy, consumables, posture, quality, maintenance and disposal until the end of the purchase of equipment.
Why does low maintenance spend look good?
When it is delayed, the budget can drop in short term; the frequency of malfunction, energy, speed loss and scrap can increase. Just look at the cost center this loss leaves in the production or quality account. TCO carries these invisible transfers between sections to the same decision table.
TCO components
The initial investment is the initial cost of installation, training and commissioning. After energy, consumables, planned maintenance, spare parts, operator time, cleaning and calibration income. Planless posture, capacity loss, reprocessing, customer risk and product life can grow economic effect. Account limit and time should be clearly written.
How to work with certainty?
Each value may not be exact. It gives you more honest results to create the best-induced-in bad scenarios and conduct sensitivity analysis for critical assumptions. For example, the saving of new nozzle depends on the grammage, clogging frequency and part price; the return of automatic lubrication depends on the downtime and maintenance time.
Application to purchase decision
Candidates solutions are compared with the same production volume, evaluation time and quality criteria. Real consumption, response time and posture data are taken from pilot test. Contract, spare parts access, technical support and training are included in the risk cost. The lowest TCO is not always the lowest price.
Application control list
- Fix account time and production volume.
- Add energy, consumables and workmanship outside purchase.
- Turn your posture and quality loss into common currency.
- Make scenario analysis for specific assumptions.
- Compare pilot data with bid assumptions.
Conclusion
TCO approach is not to grow the care budget; to see if the spending done in the right place produces lower total losses throughout the life cycle.
Manstechnic approach
Manstechnic helps assess product and equipment offerings with total process effect including grammage, maintenance, posture and technical support.