Guide to Determining the True Cost of Equipment and ROI

When considering the purchase of large-scale equipment, is it ever possible to determine the “true cost” of a potential purchase? Our customers have told us that sometimes the best way to find the true cost of a machine is to develop a metric picture of what the equipment will actually save in consumables and labor cost or lead to a rise in productivity.  Often times, a calculator can be utilized to develop a Return on Investment (ROI). Pictured below is a stretch wrapping calculator from Lantech. At the end of this blog, you will find the calculator for your personal use.

By changing inputs, our customers can anticipate growth and package changes to determine just when the proposed purchase will stop being a liability and become an asset (ROI).

In addition to ROI, there are a few other aspects to consider when determining the “true cost”.

Service Availability

Are parts and trained technicians readily available to keep the new machine up and running? If the technicians are supported by factory training, they are even more valuable. If needed, can a Preventative Maintenance program be implemented for the machine? Some FlexPAC customers have established a baseline for performance. As part of the Preventative Maintenance program, the baseline is observed and compared with past metrics. Finally, what is the manufacturer’s warranty on the item? Manufacturers who build good equipment usually offer good warranties.

Choosing the Correct Consumable

No matter how high quality the equipment, performance will always be subject to the consumable. A Ferrari will not run well on poor quality fuel. Care should be taken to determine the consumable that gives the lowest cost per load effectively shipped.

Advice of a Trusted Advisor

Whether it is an old friend, an industry peer, or someone else, advice from someone with prior knowledge can always be helpful. At FlexPAC, we have the advantage of seeing a lot of equipment and hearing quite a few comments about is performance. Our customers tell us that FlexPAC sharing that knowledge can be extremely helpful.

To go back to our original question, yes, it is possible to determine the true cost of equipment. Like any fine recipe, it takes a little of this and a little of that, but you can determine if the purchase makes sense or not. Click below to try our cost calculator for yourself.