At first, it may seem counter intuitive to suggest that you can save money by spending more of it. But it doesn’t take long to come up with several examples where upfront costs are asynchronous with total cost of ownership.
Large manufacturing plants well understand this principle because even the slightest process inefficiencies can cost them a lot of money due to factors such as downtime, poor yields, and parts failures. Paying for the right industrial wear technologies up front can make all the difference
When initial value is your priority, you will often lose in the following categories:
- Total cost of ownership
- Resale value
- Downtime
Price-shopping can be rather expensive because it carries many hidden costs that become rather expensive in the long-run. It should be rather obvious that when something is not well-made, it will suffer downtime. And depending on how critical that component is to your business, downtime can become quite costly. Here are some other hidden costs worth considering:
Long-term Maintenance
Much of your long-term maintenance expenditure will be dependent on the initial quality of materials used in your key components. AJ Weller Corporation, a provider of this tech, put it this way:
The goal of wear technology is to decrease a facilities equipment downtime and ownership costs, while increasing a facilities safety, performance, and profitability.
This can easily be seen at smaller scales. A musician knows that a cheaply made cord is going to be less reliable and in need of replacing a lot more than a quality cord. The cost of maintenance far outweighs the cost of buying a quality product in the first place.
Expand that principal to a large manufacturer of goods. Component failures eat into the bottom line very quickly. Paying a little more upfront for the small material details can save you big in maintenance costs down the road. The bigger the operation, the more savings there are to be had.
Environmental Savings
Going green is often the more expensive path in the beginning. But it is also the best path in that it is socially responsible, environmentally sound, and ultimately the most profitable. It is all about maintaining a healthy sustainability strategy.
If your business is reliant on a resource that is limited and difficult to harvest, you are going to eventually run out of that resource. And it gets harder and more expensive to replenish over time. But maintaining a sustainable resource means that resupply becomes easier and less expensive down the road.
Another reason resource management is less expensive in the long run is the piles of regulation mandating environmental friendly solutions. Running afoul of regulations is a lot more expensive than doing the right thing in the first place.
Giving Employees What They Want
Some employers seem to be allergic to ever giving employees what they want. And while it is true that catering to employee desires can be more expensive up front, there is long-term benefit that can amount to much savings.
IBM announced that every Mac they buy is making and saving them money. That goes against the grain of the constant refrain that Macs are more expensive. But IBM learned two lessons recently: When given a choice, a large percentage of employees choose Macs. Second, It doesn’t take very long at all before the total cost of ownership is a greater indicator of savings than initial cost.
Whether you are a small business entrepreneur or an enterprise moral, this is equally true for both: Sometimes, spending more up front nets big savings down the road.
Better materials lead to less downtime and lower maintenance bills. Environmental responsibility saves a whole lot more than money. Though it does that too. And giving employees what they what is not the same as giving in. It is often the shortest route to long term savings. This comes in the forms of saved money over time and employee retention.
There is seldom an advantage to being penny wise and pound foolish.
