Inkjet printing: What does total cost of ownership mean for manufacturers?

  • By Chris Thorpe
  • March 04, 2016
  • Industry
  • General
  • Beverage
  • Food

What is total cost of ownership (TCO)?

Total cost of ownership (TCO) is a way to calculate the true cost of your assets. It encompasses the initial purchase price of an item, plus the costs of operation. It forces you to think about how much a product will cost you across its lifespan - and that’s important. Because, for any item, the initial purchase cost is only part of the equation.

What are the ongoing costs of coding and labelling?

Different products have different running costs. Cars, for example, require fuel, insurance, road tax and so on. The inkjet printers you use for your coding, marking and labelling operations have their own specific set of running costs too.

Servicing

Production line machinery requires regular servicing. That means engineer callouts, which costs.

Replacement parts

Sometimes mechanical parts need replacing. Unless your printer is under warranty, you will need to pay for them.

Downtime (scheduled)

When your printing technology is being serviced, it cannot be used. Downtime costs money through lost production and lost profits.

Downtime (unscheduled)

Sometimes downtime is unscheduled - such as when your printing technology breaks down. This can be extremely costly, halting operations until an engineer can get you back up and running.

Consumables

The more you use your printers, the more you will spend on consumables like ink, makeup and ribbon.

Energy

Of course it also costs money to actually power your printers. Energy efficiency is key.

The hidden costs of aging equipment

If it isn’t broken, don’t fix it. That’s the approach taken by many manufacturers when it comes to their coding technology. Upgrading to new printers is perceived to be an unnecessary hassle - especially in the absence of capital funds. Yet persevering with old equipment can be a costly mistake.

The cost of using older technology increases with time, creating a false economy.

  • Services are needed more frequently, meaning more engineer callouts
  • Downtime (both scheduled and unscheduled) increases, meaning more disruption to production
  • Replacement parts become more expensive as technology manufacturers phase out support for older equipment

Slashing service costs from £600 to £3

We recently studied production at a major beverage manufacturer, comparing the cost of running legacy coding technology against the latest Domino A-Series inkjet printing on a high-speed canning line. The projected annual cost of servicing alone was reduced from £600 to £3 per printer, while scheduled downtime was slashed from four hours to ten minutes.

You could realise similar savings.

Coding and labelling technology has evolved dramatically in the last two years, let alone the last twenty. The latest printers are faster, more efficient, more reliable and cheaper to run - with huge improvements on TCO. So while some manufacturers may be daunted by initial purchase prices, paradoxically, buying new equipment could actually save you money.

And now you may not have to pay any upfront costs at all.

Say goodbye to upfront costs with operational leasing

Some processing and packaging machinery manufacturers - like us - offer operational leasing programmes. That means you can access brand new technology with no upfront costs, driving manufacturing improvements as well as cost savings. Equipment, servicing, training and multi-year warranties are bundled into fixed monthly payments. Alternatively you can pay per code, which is perfect if you have large seasonal fluctuations in your throughput.

It means the money you are spending to keep legacy technology running could be used to lease brand new technology instead.

To wrap up...

Manufacturers face a number of conflicting pressures. There’s a constant dichotomy between improving the quality and speed of production, while keeping operational costs as low as possible. Upfront costs dissuade cost-sensitive manufacturers from upgrading their coding and labelling technology. Yet it can be even more expensive to persevere with outdated equipment. And for businesses where capital budgets simply won’t stretch to new technology, leasing offers a viable way to transform efficiency and improve bottom line without any of the upfront costs.

Find out more in our short guide to leasing printing technology.

 

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