Lifetime Value Calculator Gives Insight into Total Cost of Ownership

Date: 10/25/2023

Previous Blog: Maintenance and Its Impact on Lifetime Value

 

Looking Beyond Direct Cost to Total Cost of Ownership: Check Out Our Lifetime Value Calculator

What is the actual cost of owning equipment? When choosing new equipment for your business, the purchase price is the first thing you consider. However, there’s much more to calculating the lifetime value or total cost of ownership (TCO) when purchasing a hoist or crane. Considering the long-term costs incurred during a hoist’s useful life up to its ultimate disposal gives you a better projection of its lifetime value. The hoist with the lower TCO can be a better value in the long run.

 

What Influences Cost of Ownership

Everyone wants the best value for their business, so it’s worth taking the time to consider what you need in a hoist and what will affect the TCO you can achieve. Getting the TCO right can help you avoid or reduce unplanned downtime and give your business a competitive advantage.

 

Safety

One factor to include when estimating TCO is the cost of safety. Accidents can cause unplanned downtime and come with a human price that can be devastating. Consider the potential costs your business would incur if equipment malfunctioned and someone is injured. These costs add up quickly. Proactive safety management will always be more cost-effective. Safer companies generally attract a higher caliber of employees, which can directly affect productivity.

 

Productivity

Planned or unplanned downtime can cost you, so ensuring you have as little downtime as possible is critical to your business’s productivity and profitability. And it has a significant effect on your TCO. Decreased utilization, inefficient resource allocation and reduced throughput and output are just a few of the adverse effects of low or lost productivity.

 

Maintenance

Protecting your investment and getting the most out of your investment with a proactive maintenance schedule closes the TCO circle. Not only does proactive maintenance reduce wear and tear that could cause unexpected breakdowns and unplanned downtime, but it can also improve productivity and overall safety.]

 

How the Lifetime Value Calculator Works

Calculating TCO can get complex quickly. You must consider all possible future events that may impact the cost of your equipment. The list of costly scenarios to consider can quickly get very long.

 

R&M’s Lifetime Value Calculator  can help determine your potential cost savings in safety, productivity and maintenance in just a few short minutes. Many factors go into determining your total cost of ownership, such as production time, your industry, cost of downtime per hour and more. Our Lifetime Value Calculator considers the following factors when determining lifetime value:

 

  1. Production Time: How many hours per week and how many lifts per hour your hoist is in use will determine overall production time. Equipment that can handle the amount of usage you need is critical TCO.
  2. Industry: Hoists have a wide range of applications, such as lifting and moving construction materials, warehouse stock and engines. Ensuring your equipment is reliable and efficient will yield maximum TCO.
  3. Average Cost of Downtime Per Hour: Following closely behind an environmental or safety event, unplanned downtime is one of the costliest events for any business.  
  4. Cost of Installation, Maintenance and Inspection: Efficient maintenance is a significant factor in unplanned downtime. Your installation type, in-house or contracted maintenance and maintenance schedule can affect your TCO.
  5. Priority Ranking for Safety, Productivity and Maintenance: These three areas, and the importance your company puts on them, are vital to minimizing TCO.
  6. About Your Facility: How many cranes, what you are moving, how long your business will be in its current building and how often production processes change can affect how much a company wants to invest in their equipment.

 

Based on your specific needs and goals, you will get an in-depth analysis of potential savings in the three TCO pillar areas – safety, productivity and maintenance.

 

Improve Your Lifetime Value with R&M Materials Handling

We build our hoists, crane components and crane packages with safety, productivity and maintenance top of mind. Our HoistMonitor®, HoistMonitor Enclave and HoistWatch devices give you real-time data on the condition of your hoist while protecting from overloads. The Overhead Lifting Information (OLI) app gives you access to information through Android or iOS devices so you can see your data in real-time displayed in an easy-to-read format. These tools give you real-time information you can use to increase uptime, improve performance and create lifetime value.

Are you interested in talking to a crane expert about optimizing your next project? Call us at 800-955-9967 or visit us online to find a local distributor to help you.