PowerbyProxi > Industrial Applications > The hidden price of fruit

The hidden price of fruit

September 26, 2012 / 0 Comments / 200 / Industrial Applications
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In our consumerist, open market economy, we have been taught to shop for the best price.  You’ve heard the statement, “nobody pays list retail price anymore.”  At the same time people will tell you to be careful when looking at two items to make sure you are truly getting an “apples to apples” comparison.

Today, the majority of industrial companies have professional buying organizations whose job it is to make sure they get the best price on components they buy. However, many times when they go shopping they get lost in the fruit aisle and come home with a lemon instead of an apple.

So why does this happen.  These are very conscientious people working hard to save money for their company and get what the production team needs to optimize the business.  The problem is that sometimes the price tag covers up the fruit and they don’t realize how good or bad it is until they get it home.  To make better decisions it is necessary to look behind the price tag.  This is called Product Lifecycle analysis.

Here’ a basic example, you buy a mechanical connector for $30 and it takes an electrician to install it that costs you $45.  From the simple price tag view this connector cost you $75.  However, this connector experiences a failure once a year due to corrosion or frictional wear. So the next year you have to buy another connector for $30, it takes an electrician to replace the old one, only this time it is at night and you have to pay call time, so it costs you $100 to replace.  Also, while that connector was failed, the production line was down for 1 hour that cost you $160.  So that $75 connector in a 12 month period has actually cost you $365.  And guess what – that keeps occurring each year, so after 48 months you have spent $1,235 on that connector choice.

Compare that with a Proxi-Point non-contacting connector.  Let’s say you buy the unit for $300, 10 times more than the other connector. You then pay $45 to install it.  The non-contacting connector, with all of the traditional causes of connector failure eliminated, lasts for 48 months with no maintenance.  When you look at your fruit bill over the four years, the traditional, less expensive connector has cost you $1,235 while the non-contacting one has cost you $345.  That’s a lot more fruit you could have purchased.

So, next time your purchasing team is looking to help you buy connectors, steer them down the aisle to true savings.  Go contactless, go Proxi-Point.

David Terkosky is VP of Business Development – Industrial Technologies

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