CROSS-INDUSTRY – Considering the Total Cost of Ownership (TCO) in industrial contexts is becoming increasingly important due to growing global competition. In large projects, customers demand TCO calculations from machine suppliers as part of their proposals. Even smaller manufacturers use internal TCO analyses to improve operational efficiency. Using a micro dispensing system as an example, this article outlines various cost factors that must be considered to analyse the total operating costs over the system’s lifecycle.

Traditionally in mechanical engineering, purchasing decisions for individual components have been based mainly on the features and initial cost of the components. However, this approach overlooks other important factors that affect the total cost of acquiring and operating a product. A vendor with a lower initial cost may offer an attractive purchase price, but their devices may require more maintenance or have shorter service lives. These direct or indirect post-purchase costs—though potentially significant—are often not on the radar of procurement departments due to a lack of technical detail knowledge. As a result, the potentially higher long-term costs are often not transparently presented and do not provide a meaningful reference for future purchases.

1. Acquisition Costs
2. Operating Costs
3. Productivity and Efficiency
4. Downtime and Maintenance
5. Training and Support
6. Flexibility and Upgrades

An insightful article by Julian Greiner — stay tuned for more! We’ll be covering each aspect in detail soon.