Cost of Ownership

In today’s melt shops, cost of ownership is tracked more than ever. Tracking these costs and knowing how a piece of equipment is affecting the bottom line is important.

There are several items to consider when purchasing replacement equipment and capital upgrades:

  • Knowing the equipment manufacture as well as their suppliers.
  • Cost of installing the equipment.
  • The value of improvements to the equipment for longer equipment life.
  • When choosing an equipment supplier knowing the equipment suppliers suppliers is important.
  • Most equipment suppliers can easily provide documents of their quality program, what is needed is to have information on the source of where their materials came from.
  • Request material certification from the manufacture; along with the quality of the materials, the fabrication process is critical.
  • Periodic manufacturing site inspection of your equipment is important. These are large investments and visiting the shop making them assures that you are getting the best quality; not only fabrication, but engineering, shipping and finished product testing.

One cost that is often over looked is the labor side of a piece of equipment. Using an EAF roof as an example, the cost of parts is only one part of total cost of ownership. The cost to disassemble, do inspections of the old frame and the labor to reassemble are all part of the cost.

In some cases it could cost $60,000 to $70,000 in labor for this; Plus the cost of hoses, valves and hangers, making simple changes to equipment design can reduce these cost. This will also free up resources for other shop projects.

Upgrades in design and materials can help with long term performance and cost savings; It’s easy to just replace the existing design, but to step out of the box and make changes and improvements have long term benefits. If equipment has a short life span it needs evaluated to increase its life; either by design, material, or how the process is utilizing the equipment. Another area to evaluate is the means of installing the equipment; if it takes multiple shifts or days to install the equipment, making changes to improve the change out has big pay backs by getting the process back up and running. Simple changes to improve access or to pick points will make the replacing take less time but also make it a safer process for those doing it.

When purchasing equipment consider all these items. Work with your Technical Sales representative to find improvement solution to increase you equipment life and lower the total cost of ownership.

Bill Bennett

Sales Manager

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