Hidden costs of up to 75% of the price of owning equipment are costing UK industry dear. As British industry strives to equal the profitability of its European counterparts, cost of ownership is set to become an increasingly burning issue.
Most decisions about new plant or equipment are taken on the basis of capital cost alone. Although time and effort are put into comparing product details and obtaining the best possible deals, the hidden costs are rarely counted.
Cost of ownership directly influences a company’s bottom line, but is rarely taken into account. As well as capital cost, fit for purpose, energy efficiency, and the product’s life cycle should also be considered. This issue will be particularly important for OEM manufacturers as end users demand that the machines they buy have the lowest cost of ownership possible.
Looking just at the pneumatics on an average machine, it is astonishing how much can be saved from these three factors.
A simple way to save money on a piece of equipment over its life cycle is by considering in detail the job you need it to do, and matching the equipment to the job.
A prime example is using equipment that requires compressed air to be filtered to a very high degree for applications where this is not vital. Although some applications – like breathing air apparatus or spray painting – require extremely pure air, most do not.
Imagine a standard machine using six regular pneumatic cylinders. Then compare the running costs of using compressed air filtered to 5 micro m with that of air filtered to 40 micro m. Amazingly, the air filtered to 5 micro m would cost £300 more each year than air filtered to 40 micro m. Working on the basis of a 10 year lifespan, that over-filtered air will cost £3,000. And that is just six cylinders on one machine. Just consider the number of valves, filters and actuators in a whole factory and count the hidden costs.
Fitting equipment which requires air to be over-filtered comes with a huge hidden price tag. This is because more pressure is required to cope with the pressure drop caused by filtration, more energy is required to provide the extra, wasted pressure, maintenance costs rise because filters need changing more often, valves need replacing regularly, because they cannot cope with even the smallest piece of dirt, and actuators suffer the same problem
Norgren’s equipment, in general, is designed to operate efficiently with air filtered to 40 micro m. This makes for robust, reliable equipment that does not require excessive maintenance. Less pressure needs to be generated as the pressure drop across the filter is small.
Designers can save a lot of money, either at no cost or by fitting simple, low-cost, pieces of equipment. Over a ten year period, 75% of the cost of owning a compressor is found in its energy bills. Capital outlay only makes up 15% while maintenance, at 10%, makes up almost as much as the initial cost.
When considering the cost of ownership, it makes sense to choose energy efficient equipment because it offers a clear cost saving. When the Government’s energy tax is introduced in 2001, manufacturers will save twice – once on a lower energy bill and again by paying less tax.
One tip is to ensure that once equipment starts to lose efficiency it is replaced in good time. Although equipment can sometimes seem to last forever it may well be costing you over the odds in fuel bills.
Maintenance can cost more than the equipment itself, so reliable equipment requiring low maintenance provides the best value for money. The rise in diagnostic capability will help to meet this need. If you know exactly what the problem is, maintenance time can be kept to a minimum and losses due to unscheduled down-time reduced proportionally.
`Intelligent products’ not only have diagnostic capability but can also predict failure. This means that maintenance can be carried out during scheduled down-time, eliminating unscheduled servicing.
Intelligent valves, for example, which feed data back via a fieldbus, allow operators to predict failure and loss of efficiency before product quality is affected. An intelligent FRL tells its operator exactly which element of the system needs attention before the performance of equipment downstream is affected.
It is hard to break the habit of a lifetime, but it pays to check out the cost of ownership before you buy new equipment. Sometimes it may mean a higher capital investment but you will always save in the end.
Norgren Tel: 01543 254000