Improving efficiency and making effective use of finances is a continual focus across industrial sectors from mining to automation to construction to petrochemicals.
But these sectors are also often placed under high degrees of regulation and constantly have to deal with changing global economic circumstances, making budgets inflexible and investment in equipment and new technology much more difficult.
And it is not just the upfront costs of providing workforces with gas monitoring devices or installing ventilation and dust extraction in hazardous environments, the on-going costs associated with the replaceable consumables in this equipment – like filters, batteries and gas cells – which are often the most challenging aspects of budget pressures.
This is not helped by the fact that – across industry – suppliers have often been driving the price of these gas detection consumables, meaning that some businesses are paying a 1,000% mark-up essentially.
For example, the price to replace cells in 1,000 gas detection units (with four gas cells and assuming a three-year swap-out cycle) at cost price might be in the region of £200,000 over a six-year period, depending on the exact configuration of the cells.
However, because suppliers are driving the prices up, the real cost to replace gas detection cells in these units will often be closer to £2m, a 10-fold increase.
The original cost of the equipment can actually be small fraction of the consumable costs over time – in the above scenario it may be between £400,000 to £600,000 – and it is not hard to see how businesses are struggling to keep finances under control when the cost-of-ownership is so high.
Reducing the costs of consumables is essential for the future financial viability of operations and would significantly increase the health and safety budgets for managers, allowing them to investigate and invest more in new innovative technology which can provide greater benefits.
Future proofing to meet regulations
This ability to invest in new equipment – especially protective equipment – is essential to meet the increasingly strict regulations as it relates to individual health and safety as the risks of exposure to hazardous substances, like silica dust, become clearer.
By taking into account the total price of ownership over the equipment’s lifecycle – rather than just making a decision based on the initial up-front costs – operations and safety managers would not only be able to drive down costs, but would also get a much improved oversight of the quality and value of any investment.
Given the challenging global conditions many of these managers operate in, having better transparency over costs to prepare more robust budgets and investment decisions is essential – so maybe it’s time to look beyond the initial cost and take a bigger picture approach to investing in new technology.
Big picture view
By comparing the initial costs of a purchase with the total price of ownership during the equipment’s entire lifecycle – including the price of consumables like gas replacement cells – and reviewing this against the operational life cycle of a project it will be much easier to see the differences in end to end costs, and plan budgets more effectively.
Having this holistic view of equipment usage will also allow operational managers to consider other operational costs and additional areas where savings can be made or productivity improved, like time lost to recharging devices.
Minimising downtime and costs to improve efficiency and operational viability is key to the long-term success of industrial sectors and is something leaders need to take a closer look at.
Companies in highly complex environments where workers may be at risk of exposure of up to six different gases may require up six different gas detection cells. This is why when it comes to calculating the total cost of ownership, you need to consider safety equipment and the potential implications for productivity. Download our eBook to find out more: