In sectors under high degrees of regulation or operating within ever changing and chaotic political or economic circumstances the ability to maintain flexible budgets, invest in new and better equipment and remain viable is essential – especially within tight margins.
Those companies operating within industrial sectors like mining, manufacturing and petrochemicals understand this better than anyone and the challenge of providing effective equipment – both in terms of life cycle, productivity and health and safety is of the upmost importance.
Suppliers similarly face the challenge of competing for the business of these companies, and many are competing on the initial price when it comes to offering low costs up-front for monitoring devices, or ventilation and dust extraction.
But when it comes to consumables – filters, batteries and gas cells for instance – there are some suppliers which are banking on buyers not having the time to consider the complete cost of ownership – taking into account replacing these consumables.
This is leading to some suppliers charging up to 1,000% mark up, and it is happening right now.
For businesses replacing cells in 1,000 gas detection units – with four gas cells and assuming a three-year swap-out cycle – it should cost about £200,000 over a six-year period depending on the configuration of the cells being used.
However, some suppliers, perhaps taking advantage of the time to properly research costs are driving up costs closer to £2m, a 10-fold increase for buying the exact same consumables being sold by suppliers without a mark-up.
In the end the original cost of the equipment, which businesses think they are making a saving on due to the low costs, ends up being just a fraction of the overall cost of ownership overtime.
For the future financial viability of these industries more needs to be done to drive down the cost of consumables, and buyers perhaps need to do more research into the full costs they can expect to pay during a project’s or equipment’s life cycle to ensure those suppliers charging such high amounts are no longer able to.
Mining and other industrial operations are now under much more pressure than they have been before when it comes to dealing with health and safety issues. This is in part because many of the long-term health consequences of exposure to some substances, like silica dust, are only just becoming known.
But balancing budgets when juggling the need for personal, mobile, gas detection, static monitors, wireless gas detection, as well as the need to also monitor for multiple other environmental factors like temperature, airflow, ground movement and vibrations can be an expensive proposition considering the cost of additional cells for the monitoring equipment.
As a result, operators could find themselves in the situation where they are being asked, or making the decision themselves, to use equipment until the absolute last moment before the cells need to be replaced in order to save money.
While the cells will continue to provide some protection until the end of their lifecycle, the degrading of the cells over time means they might not function as efficiently as they did earlier on and could potentially end up providing less accurate measurements – putting operatives at some risk.
More needs to be done to educate buyers within these industries about the real cost of ownership of the equipment they rely on or too many could be forced to compromise on either productivity or safety – or both – when they find their budgets being stretched to the limit.
Then there is the advancement and investment in technology to consider and the fact that suppliers are charging up to 1,000% extra on top of the cost of cells means buyers and operations manager have less money to invest in other areas of their projects – like bringing in the latest technology or investing in emerging products.
Again much more needs to be done to ensure that suppliers are not taking advantage of buyers when it comes to the cost of these consumables. Operations managers and those responsible for decisions on equipment are looking at hundreds, if not thousands of moving parts at once, so having the time to work out the entire cost of ownership over six years isn’t a luxury they have.
And some suppliers are definitely taking advantage of this.
This is both potentially dangerous on the health and safety front, but also hugely short sighted when it comes to the development of new and better technological equipment down the road.
To find out more about how a single, multi-environment solution can provide significant cost reductions whilst driving up productivity and safety in the workplace, download our free eBook today: