Some manufacturers prefer to simplify the machine tool acquisition process by prioritising value – but this often comes at the cost of performance. For the highest return on investment, it is important to find a balance between performance and value. While this seems more daunting than comparing sticker prices, minimising lifetime costs makes it significantly easier to keep up with technological advances and to grow business.
Performance vs Value
The use of “performance” and “value” serves as shorthand for all of the factors that make up a given machine, it should not be treated as a spectrum with value at one end and performance at the other. Manufacturers must consider all of the different kinds of “performance,” from equipment that has been designed for extremely specialized tasks to exceptionally versatile machines that prioritise flexibility over optimisation. Likewise, “value” is more than a number on a price tag, since high-value or commodity-type machines can be more expensive in the long term.
Machine shop size can also dictate what factors are most important – and how much time can be spent on the decision-making process. Smaller machine shops often need to evaluate the external factors of a purchasing decision, such as support. A more expensive machine may be more than worth the price when it is accompanied by a service and training package that gives smaller machine shops access to world class expertise and application support.
Total Cost of Ownership
Regardless of a manufacturer’s size, another important factor that must also be considered is the total cost of ownership of a machine. The more information that can be gathered about costs associated with a machine, the easier it will be to make an informed decision. The analysis should also include projected risks, as machines that cannot provide sufficient process security will always end up costing much more as parts are scrapped in the future.
Cost Per Part
As the volume of operations grows, so too does the importance of the cost per part. High-volume manufacturing remains the norm in many industries, and for the largest of these manufacturers, shaving fractions of a second from a part’s cycle time can mean thousands of dollars in savings a year. These manufacturers allocate the resources for making informed decisions – finding the ideal balance between performance and value is much easier when a machine shop can factor in everything from energy consumption to coolant evaporation.
No matter how a manufacturer arrives at their cost per part, finding the most effective solution for optimising a given process is much easier with machine tool companies that have expansive catalogs. With machine tools at most price points and a comprehensive range of features, Mazak can help get as close to the ideal balance between value and performance as possible.
Total Lifecycle Costs
Truly maximising ROI requires considering the costs over the entire lifecycle of a machine – including its resale value. Manufacturers who purchase new machines do so with the expectation that they can help fund the next round of capital purchases by selling the old equipment. From this perspective, it’s vital to look at such things as how quickly machines wear out, or how much aftermarket support is available for these machines.
Total lifecycle costs can completely transform how manufacturers consider machine purchases. For example, a high-value machine may cost $100,000, and at the end of a five-year period the machine can be sold for only $20,000, meaning the total lifecycle cost was $80,000. A more expensive $150,000 machine from a manufacturer like Mazak, may be so well-supported and durable that it can sell for $75,000 after five years. While the initial investment is higher, over the five-year period of ownership, the total lifecycle cost is lower at $75,000. Include the faster cycle times, greater throughput and higher durability of the Mazak solution – as well as the company’s long history of business stability, technological leadership and customer support – those costs often go down even further. Read about Lowest purchase price vs. lowest life-cycle costs.
Capabilities and Capacity
Given that minimising total lifecycle costs is key to maximizing ROI, many manufacturers choose to create purchasing plans with a schedule for upgrading capital equipment. This ensures that machine shops always have equipment that meets their current technological needs and requires little more than planned maintenance for excellent reliability.
In many respects, adding capabilities tends to add to overall capacity as well. For example, some manufacturers are replacing their single-purpose mills and lathes with Multi-Tasking equipment, which provide exceptional flexibility. A Mazak machine capable of DONE IN ONE operations can significantly improve throughput and accuracy, particularly in high-mix/low-volume production environments where job changeovers occur frequently. Read about Beating the manufacturing clock with Mazak’s Multi-Tasking machines.
No matter a manufacturer’s size or the industry in which it works, capital purchases involve making numerous hard decisions – and for the highest possible ROI, machine shops cannot afford to ignore the many factors that go into the final costs of the machines they’re considering purchasing. By partnering with Mazak, manufacturers can easily find equipment that suits their needs, both in terms of effective machining today and the residual value the machine will have in the future. This approach ensures manufacturers can achieve sustainable profits at the same time they future proof their facilities through continuous improvement.