Purchasing power: How to optimize total cost of ownership on inspection equipment
By Pierre DiGirolamo, Director, Fortress Technology
The success of any food processor lies directly in the performance and the efficiency of their production equipment. The sticker price is just a small part of the story. In some instances, analysts cite the price to be 10-15% of the TCO.
Looking beyond these explicit costs and weighing in all the likely expenses you may incur across the lifespan of equipment is front-of-mind for many in today’s highly competitive food manufacturing environment.
Breaking down the various direct and indirect costs associated with inspection machinery across its lifespan warrants more than just a cursory glance suggests Pierre DiGirolamo, Director, Fortress Technology. Operational and energy costs, ongoing support, sourcing replacement parts, maintenance and repair fees, lost production time when machines are out of action, productivity and product lifecycle should all form part of the TCO equation.
Value not cost
It’s human instinct to look at the price tag of an item. There’s a psychological thrill attached to securing a bargain, being frugal or buying on impulse. Yet, what looks like a great deal on the surface can turn out to be a false economy.
As Warren Buffet famously said - “Price is what you pay; value is what you get.” Although he was talking about stock investments, in the case of food safety, the same statement rings true. Inspecting for contaminants, including metal, is a prerequisite for brand protection. Implementing a robust food safety program is something you can’t put a price on when quality underpins commercial success.
Short-term thrift with inspection equipment is not always worth it. Instead, try to base your inspection machine decision on the most prevalent food safety risks, and be sure that any technical advantage will actually add value.
When making an investment in a new food metal detector and evaluating TCO, always factor in the cost of replacement parts and keep in mind how quickly technology evolves.
Machines made for the long haul
TCO is lower when maintaining backwards compatibility. It requires a stable platform at the outset. But providing the structural inspection machine is sound and systems are designed with modularity and scalability in mind, the process of rolling out upgrades requires minimal time, investment and business disruption versus commissioning a new build and installation.
Reassuringly, with the right maintenance, a Fortress food metal detector can run for 20+ years. Just last year, one of the first machines ever sold by the company was upgraded from an analog metal detector with no digital controls to the current Stealth hardware platform. This legacy metal detector continues to run as efficiently as the day it was installed in 1996. However, it now has the latest hardware and software features of the Fortress Stealth.
All Fortress machines are designed to be backward compatible. The electronic boards are interchangeable, which means customers can hold just one spare in stock. Alternatively, they can swap a board out from another machine while waiting for a replacement to be delivered.
Pulling the plug on parts
For some inspection machines, part obsolescence is when the real drain on finances can start to bite. Each time a new model launches, the prices of spares increases incrementally. Food manufacturers subsequently find themselves at a money pit tipping point. Modernize or stick with legacy equipment?
Ask your supplier to be upfront about replacement part costs. If they’re not prepared to divulge these, that’s a red flag. Realistically, a Fortress metal detector will probably require two replacement boards at most in its lifetime - most only one, costing around $950.
Also, ask to see data on machine failure rates. If these aren’t available, word of mouth business recommendations are also reliable.
Avoiding the dollar downtime drain
For most manufacturers, downtime is the single largest source of lost production time. Every product that comes off the line after processing and inspection has a value attached to it.
Unplanned downtime is the biggest drain. When unplanned downtime occurs, no value is being produced. Yet, operational overhead costs continue to grow - directly impacting the bottom line.
Equipment failure is one of the leading causes of downtime. Research compiled by the American Productivity and Quality Centre estimates that unplanned machine downtime in a business within the median performance category can account for four percent of Scheduled Run Time. For industrial plants in the bottom category, it’s closer to six percent. Putting this into a revenue context, between $0.40 and $1.20 in every $20 can be lost. For mass food manufacturers of all sizes, losses of this scale can rapidly make or break a business.
Equipment that’s poorly maintained will likely breakdown more frequently. This impacts quality, as well as productivity and Overall Equipment Effectiveness (OEE). Adopting a ‘run to failure’ method is risky.
Rather than reacting to emergency tasks, Fortress recommends customers perform an annual preventative maintenance check, and many of our global customers sign up to this service check. Additionally, carrying out relatively straightforward maintenance – such as regular visual checks on the conveyor and monitoring the lubrication levels – can make a big difference to a system’s running costs.
In the event of a breakdown, remote assistance and access to a 24/7 hotline can help to troubleshoot issues faster. Where a call-out is required, having access to local support teams means a Fortress engineer can be on-site within 24-hours
Averting human errors
After equipment failure, operator mistakes are the second largest cause of unplanned machine downtime. Stepping up training protocols doesn’t just teach production operators to diagnose and repair their own equipment but also how to properly operate and calibrate the machinery, thus minimizing issues occurring in the first place. Quick learning features, multi-lingual control panels with short cut keys and automatic calibration saves time and costs by avoiding false production starts.
Regardless of how up-to-date food inspection systems are, human error and misuse can never be eliminated by machines. It’s critical that company procedures and practices are robust and that operatives clearly understand their role and responsibilities. Utilize any training suppliers offer to build awareness of food safety risks and improve understanding of equipment among operatives.
Another notable benefit of a Fortress upgrade is no additional operative training is required - the menu and functional set up look and feel the same.
Automatic test technology - such as Halo - can also save significant time and labor resources. Rather than just performing manual checks, for a relatively modest investment, Halo can narrow the time window during which a problem with a metal detector can go undetected. This can reduce the number of suspect products that must be discarded or recalled in case of an incident, saving more money.
Debunking the legacy TCO myths
While some may argue that legacy equipment has had its day, Fortress believes that providing the base unit is in good working order, they can be updated with the very latest technology to optimize TCO.
As testament to how robust these metal detectors are, one Fortress metal detector continued to live another day after being engulfed in a fire at a Canadian lumber unit. Another in Brazil was in good working order after being fully submerged in water.
Fortress lives by the ethos If it ain’t broke, don’t fix it. Given that the company is fast approaching its 25th anniversary with many of the original machines still in good working condition today, this TCO business formula certainly continues to stand the test of time.