Another day, another call from a foundry that “saved money” buying low-value vibratory equipment from our competition.

Total Cost

 

This time the call was in reference to a group of machines engineered and manufactured by a company that used erroneous engineering calculations. As a result, from day one of operation, the equipment cracked and broke. This was an unfortunate error in design, but not as unfortunate as their response to the customer. Blaming them for the breakage, the manufacturer took no responsibility for the poor design of the machines, which was evident just by looking at the equipment.

 

Knowing the scope of expertise GK is capable of, the facility reached out to us for a solution. We happily accepted the challenge and went to work on a solution.

These calls make me think about the short-sightedness of buying based solely on price. I get it, we all have budgetary constraints. However, what happens when the price of saving in the purchasing stage turns into costly maintenance and equipment modifications?

In the budget-driven world in which we operate, total cost of ownership is often not considered. If it is, it is a depreciated concern of the purchaser, as they are living in the “now” and are not planning for the long-term.

In this case, proper due diligence would have revealed that the company they bought this equipment from has consistent quality issues with this type of equipment. In fact, most of the machines they have supplied have failed within a short period of time. The failure, to date, has cost them nearly as much as the equipment, much more than the initial premium they would have paid for purchasing from General Kinematics. Even worse, the constant repairs needed to keep their machines operational creates large periods of downtime, lost opportunity cost, and lost profits.

Price and total cost of ownership are two different dollar amounts in the long run. With each purchase you make, be sure to do your due diligence, knowing not only what each company is offering in their proposals, but what this will truly cost you over the life of having that machine in your facility.

 

Keep your money in your wallet

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Tom Musschoot joined General Kinematics full time in 1999 holding the titles of Director of Marketing and VP of North American Sales & Marketing to name a few before assuming the office of the President. Tom received a BA in Music from Bradley University before completing his MBA at Webster University. Tom has 5 patents in his name, spearheading the rotary product line for GK. When Tom is not in the office he can be found watching hockey, working on cars, or driving his kids to their sporting events and cheering them on.
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