SURVEY: Training is Essential to Packaging Machinery Procurement (October 16, 2007)
PMMI Certified Trainer Program to Host Packaging Industry Roundtable at PACK EXPO Las Vegas (September 7, 2007)
PMMI Launches Certified Trainer Program for Consurmer and Industrial Goods Companies (June 11, 2007)
PMMI Announces Best Practices for Industrial Training (April 11, 2007)
PMMI Announces Technical Training Community of Practice (March 5, 2007)
friday, february 29, 2008
Total Cost of Ownership: Looking Beyond the Tip of the Iceberg
By Nancy Cobb, PMMI Certified Training Facilitator
With competition at an all time high, packagers must ensure that their lines are as efficient and cost effective as possible. Companies looking to improve or add to their capabilities through machinery acquisition must consider a wide variety of factors. At the point of sale, it’s often difficult to see past a machine’s sticker price. However, the sticker price is only the tip of the iceberg. It is important to consider that the initial cost accounts for only a fraction of the total cost of ownership. This article will discuss how total cost of ownership is calculated and ways in which it can be reduced.
Calculating Total Cost of Ownership
Total cost of ownership can be broken into three primary categories: acquisition cost, sustaining cost and maintenance cost.
The acquisition cost includes the purchase price, engineering, installation, initial training, any customization and start up costs. The majority of purchasing decisions are made at this juncture. The list price of a machine for the features offered is the easiest point of comparison when shopping for new equipment.
Sustaining costs include operational costs such as labor, utilities, consumables and equipment reliability. Although they will reflect annual increases and go into the TCO, it’s difficult to control these costs, with the exception of reliability.
Maintenance and repair costs include spare parts, maintenance labor, service, life of equipment and de-commissioning costs. Read the rest of the story...
