Industrial Pumps Blog

The total cost of ownership (TCO) of an industrial pumping solution has attracted renewed focus and interest amongst designers and operators in recent years.  The recent global economic crisis has invigorated debate and developments within the industrial pump community as the need to increase efficiency and reduce costs has been thrown into stark relief against highly pressured, bottom line results.

The initial project cost is now largely considered to be an irrelevant cost in terms of the decision to proceed with one solution or a competing system.  The lifecycle costs associated with an industrial pumping solution must be taken into account, including an assessment of opportunity cost, in order to arrive at the most effective engineering solution which translates into financial performance for the client.

It is imperative that lifecycle costs include the expense associated with scheduled and unscheduled downtime; maintenance cycles and operating costs, particularly with respect to energy consumption.  There is also the need to take into account the environmental impact of the proposed solution with the growing demands of governments around the world and at home, looking for business and industry to reduce the environmental impact created by their operations.

Specifically, engineers and financial decision makers will consider the various factors which contribute to optimization of the pumping process including:

• Optimization of the industrial pumps in respect of the liquid being pumped as well as the viscosity level of the pumped liquid;
• Ensuring the requirements of the solution are themselves relevant and optimized so only those necessary are included in the list of solution requirements;
• The pump drive is itself efficient and optimized for the task;
• Installation and implementation are carried out effectively and deliver an optimal result; and
• The dimensions of the pumping solution are optimal for the requirements and operational considerations.

It is a very difficult decision to make when dealing with customized engineering solutions as to whether the design and construction should be kept in-house or whether to buy the industrial pumping solution externally.  In practice, it is usually a collaborative effort which yields the optimal solution but there are factors which should be considered when dealing with a make-or-buy decision.

Modern engineering solutions frequently call on specialist expertise, which may not be available within the host organization and can only be found with third-party contractors, who have the experience and capabilities to deliver the solution required.

The question is how to choose a third-party partner to deliver the skills and techniques needed to produce an optimal result for industrial pumping requirements.

Cost is obviously a factor in the decision to self-build or buy-in; it is not simply the initial design and implementation costs which should be considered but, as with any project, the total cost of ownership (TCO) which will include assessment of solution efficiency, maintenance and operational parameters.  There is one factor which is usually overlooked even when taking a TCO approach – the skills hand over from experienced third-party specialists to internal staff which helps develop their abilities and fosters the internal adoption of cutting edge techniques and skills for the host company.

Operational requirements of the solution may also demand the use of advanced design and construction methods, or the use of proprietary materials which are not generally available.  A third-party partner may have access or hold proprietary information and materials which the design calls for and which the client company is unable to replicate internally or elsewhere, so mandating a collaboration.

Reliability of the solution can be enhanced by using a third-party partner where they have the experience and track-record of delivering engineering solutions using advanced techniques, designs and materials in the operational environment being considered.  Downtime, failure rates and mean time between scheduled and non-scheduled maintenance will all impact upon reliability as well as the TCO; in many instances, these may all be reduced by using specialist contractors who have the necessary experience of working within the same environment with other clients facing the same problems.