The true cost of low cost

Neil Webster,  General Manager at ABB UK instrumentation, questions the longterm value of bargain manufacturing equipment

Everyone loves a bargain, especially when money is tight. Despite the encouraging upturn in the manufacturing sector, the recovery is still fragile at best and there is still the pressure on to control costs as tightly as possible.

So no one could really blame manufacturing companies for responding with a bit of bargain hunting. Even so, we’ve all experienced the flipside of bagging a bargain at one time or another, which is that you get what you pay for. And this is as true for hard-pressed companies as it is for the rest of us.

The trouble is that the hunt for a bargain too often focuses exclusively on the upfront cost of new kit and that can be an expensive mistake in the long run.

Saving the pounds

First there’s the equipment itself. Suppliers work hard to include all the latest innovations and features in their top-of-the-range equipment. Standardised hardware platforms can cut down on the requirement to stock spares, for example, while self-diagnostics can help optimise maintenance programmes. Of course, that’s all in addition to the fact that better quality instrumentation can boost performance in core areas such as improved process control, more precise chemical dosing or improved energy efficiency, to name but a few.

But the differences don’t end with the quality of the actual equipment. Suppliers who are being screwed to the wall over pricing are far less likely to throw in additional service and support. Whether you find yourself on the end of a premium-price technical helpline, or simply find that you have to wait longer for an engineer to come and fix a problem, there will ultimately be a price to pay.

Before you all start muttering that “he would say that, wouldn’t he”, I admit it’s in my best interest as a supplier to promote sensible equipment pricing. But the point is that reputable suppliers deliver a lot more to the industry than cheap equipment. We’ve all become used to including innovation, technical know-how and service support as part of the deal, and it’s these added benefits that will be eroded if it comes to an all-out price war.

Moreover, firms that invest during times of recession are often those that are best geared for success when recovery comes. With encouraging signs of growing demand now upon us, companies should surely start preparing themselves to capitalise on this recovery by investing in technologies that are proven to bring improved levels of efficiency, rather than relying on existing plant resources.   

Tough times mean that purchasing departments may feel that they can’t afford to do anything other than look for the cheapest unit cost. The irony is that taking that approach, rather than looking to the future and investing in the latest innovations, may well leave them paying a much higher price in the end.

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