Profitable, productive work is the objective of any company that thinks in economic terms. Machinery and equipment that are efficiently utilized have a direct impact on production. However, other factors also directly impact cost-effectiveness: machinery and equipment also cause costs that are not simply incurred from the acquisition. This is what is considered in life cycle accounting: Many investments turn out to be cost traps despite low initial procurement costs.
The costs of operating a product exceed the cost of the investment many times over
To act cost-effectively over a prolonged period of time, all cost factors must be kept in mind when planning investments. In such cases, the product's entire life cycle is considered and the procurement costs often fade into the background compared to operating costs: "Several surveys have shown that the cost of operating a product tends to exceed the cost of the investment several times over. This has to do with the long service life of the products where the costs of operating and maintaining the equipment recur periodically. The LCC value is therefore of strategic importance in procurement for the production team, however it is still underused as a tool in day-to-day industrial affairs for targeted investment planning", explains Gerd Kammerer, Director of Product Line Management at Bizerba.
What lies below the surface
Just like an iceberg, many costs that arise during the service life of a product are not identified at first glance: They include maintenance and installation costs, operating costs, training costs for staff and the cost of any adjustments. During the production process, aspects such as target speed, service life, and availability or individual key figures such as OEE play a key role. Furthermore, consumables such as labels must also be considered; the more precisely they are, for example, linked to labelling and printing systems, the greater their impact is on changes in the LCC value.
Regarding life cycle costing, the topic of software is also a matter of major importance given that, for example, updates or preventative maintenance are recurring cost factors that ensure the required security and trouble-free function.
Quality is the most cost-effective feature
Although separate, high-quality equipment or components often have a higher acquisition price, this is clearly offset when considering costs over the years. Calculating life cycle costs means products can be compared with respect to cost-effectiveness. What becomes clear: quality is worth it. This does not just mean the highest possible availability of machinery, but also within the context of sustainability. The longer equipment functions reliably and can be retrofitted if required, the better the outcome in terms of saving resources. Surveys show that this oftentimes results in more environmentally friendly products, even if procurement costs are higher compared to the cheapest version.
Bizerba relies on this basic principle: life cycle costs of Bizerba products are lower on average compared to the competition. Ultimately, quality, cost-effectiveness and the availability of a product over its entire service life are of the utmost importance for our customers.
Services such as the Bizerba Life Cycle Contract ensure this at every single point of a Bizerba product's service life.
Life Cycle Agreement
Integrated service, applicable to all Bizerba technologies: usage of Bizerba hardware, software, and services
Payment terms
monthly, quarterly or annual turnkey package
Service
- Delivery and installation of new machinery
- Integration into the existing process landscape
- Repair services
- Preventative maintenance within each cycle • Replacement of worn parts as part of preventative maintenance
- Replacement of recommended spare parts as part of preventative maintenance
- Deinstallation of the unit after the contract period has expired
Your benefits
+ Transparent life cycle costs (LCC) that can be planned + increased overall efficiency as the result of efficient processes
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