A few years ago, a slew of car companies started touting the total cost of ownership on their models. They wanted potential buyers to know that even though their cars may cost more, the total cost of ownership (TCO) actually made them less expensive in the long run.
If you run a manufacturing company, a prototype and production service or any type of multi-faceted operation with possibly millions invested in production machinery, TCO takes on a whole new level of importance. Your production, profits and long-term success depend on this machinery.
Finding accurate numbers, making wise choices
While most manufacturing companies have a solid grip on pricing and labor costs, the most successful firms expand this view into support costs, maintenance, personnel needed and much more. This is a wide-ranging, more detailed approach that can give businesses additional data to make better decisions both when buying equipment and re-shoring or outsourcing entire operations.
Too often, procurement professionals with a lot on their to-do list focus squarely on price. While this isn’t a bad approach for buying raw materials and keeping supplies flowing through on a daily basis, a really good, strategic decision involves understanding the total cost of a deal and how it relates to the total enterprise.
Take charge and move decisions from price-based to value-based, and you’ll benefit the enterprise as a whole. It’s not about how much you pay for equipment, and personnel, it’s what you get in return. While it may be faster and easier to drive forward with a cheap machine, you’ll soon find out it’ll take a small army and a stack of expensive software to make your product work.
When you discover that it’s more cost effective to outsource your ideas to a skilled prototype and production service, take a look at PDS. Download our brochure today and discover what we can do for you.