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TCO (Total Cost of Ownership) refers to total cost of ownership, including the costs of product procurement as well as later usage and maintenance.
Just because a packaging machine has a low purchase price doesn't mean it's actually cheap. A cheap automated packaging machine might cost you more. Let's assume you just purchased a low-cost packaging machine, and that's where the problems begin. You bought this machine to replace one that was failing, so your facility's productivity decreased significantly while you waited for the new machine. And the manufacturer you purchased may have poor after-sales issues: offering shorter warranties, repair services, or parts and accessories that don't keep up. Since the manufacturer may not provide repair services, you must hire others to inspect and troubleshoot machine problems. That's when you lose more money. Finally, the machine is started and running. Everything is normal for a few days. But suddenly, the machine breaks again. Due to its poor quality, it runs slower than higher-quality machines and experiences accelerated wear. From then on, your machine occasionally continues to malfunction. You must go through the same process repeatedly—hiring technicians, dealing with downtime while waiting for replacement parts to arrive, and installing these parts. Just a few years later, your machine becomes completely obsolete and needs replacement.
TCO includes the direct and indirect costs of operating a machine. Here's what you need to know about the lowest cost versus total cost of ownership for packaging machinery, including some key factors affecting TCO.
The purchase price of the machine is one thing that affects TCO. In most cases, purchasing quality machines keeps other costs at lower levels. Compared to old machines and second-hand machines, new machines have lower failure frequencies, replacement parts are easier to fix, have more features that improve productivity and return on investment, and have longer lifespans.
Maintenance costs also affect TCO. Since newer machines fail less frequently, their maintenance costs are typically lower. And because parts and technicians are easier to source, getting them back up and running after failures rarely takes more than a few days. But other factors affect maintenance frequency and costs.
One of these factors is the manufacturer you purchase. Do they offer warranties covering partial repair costs? Do they provide real-time technical support and same-day repairs to minimize downtime? How long does it take them to source and ship replacement parts? Manufacturers providing excellent service can make it easier and cheaper to keep your machines in optimal condition.
How much power does it take to run the machine? How much space does the machine occupy? Do you need to purchase additional software for the machine? How many people does it take to operate the machine? These are all questions that help determine the machine's operating costs. To maintain lower operating costs, look for machines that are automatic (don't require operators and have minimal human-machine interface) and have modular designs (compact and don't take up too much space).
Ideally, you want to achieve return on investment (ROI) as quickly as possible. The faster you earn your money back, the sooner you can start profiting from your new machine. Newer machines with more advanced technology tend to improve productivity more than outdated machines.
The older and lower quality the machine, the higher the maintenance costs. Eventually, all machine components will become obsolete and need replacement. The newer and higher quality your machine, the cheaper it is to operate and the longer it can be used.
Speed packaging equipment's automatic box openers and automatic box sealers have reasonable upfront costs and lower TCO. They are manufactured with excellent technology to ensure the fastest return on your investment. Contact us immediately to learn more about our products and services!
