PU M P IN D U STRY
President’s welcome We all want our pumping systems to be reliable and energy efficient. Total cost of ownership (TCOO) is a concept that is bandied about by many pump purchasers.
Pump Industry Australia Incorporated Kevin Wilson – Secretary PO Box 55, Stuarts Point NSW 2441 Australia Ph/Fax: (02) 6569 0160 pumpsaustralia@bigpond.com Ron Astall – President United Pumps Australia & Astech Consulting Services John Inkster – Vice President Brown Brothers Engineers Mike Bauer - Councillor Dynapumps Geoff Harvey - Councillor Davey Products Pty Ltd Tony Kersten - Councillor Grundfos Pumps Pty Ltd John Link – Councillor Link Pumps Martin O’Connor – Councillor KSB Australia Alan Rowan – Councillor Life Member Keith Sanders – Councillor Australian Industrial Marketing & Life Member
Over the projected lifetime of a piece of equipment, TCOO aims to gather all the costs such as purchase cost, running cost, down-time cost and maintenance cost. How often is this concept really applied properly? I suspect rarely, if ever. Sure, running cost information, spare parts usage, and overhaul cost estimates may be included in some bid evaluations but this stuff is only part of the picture. Where there is a large installed equipment base, some purchasers may also have developed comparative data on equipment mean time between failure rankings between vendors; but this is a difficult thing to substantiate, particularly during bid evaluations. During recent discussions with a senior engineer in the resources sector we agreed that a major project management cost issue is that of equipment commissioning delays. A major compounding factor is poor supplier support and response times. This is also a major problem for ongoing maintenance. The grizzle was that they were likely going to end up with the lowest cost bidder and they really wanted a local supplier for the best support. One or two days lost due to a slow supplier response would often eclipse the purchase price savings. They were tired of waiting for answers from different time zones and from overseas
factories where the small size of the Australian market meant that they were regularly a low priority. They knew which vendors they preferred but were at a loss as to how to quantify this into a purchase specification. “How can I put this into a spread sheet?” I have heard this grizzle so many times. Australian manufacturers should have a unique advantage in the local market because our engineers and technical people are right here and, if we let them, they can talk directly with customers to solve their problems and provide assistance. Also, I have found that in Australia, because our organisational structures are smaller, our engineers typically need to be more multi-skilled and they are better at troubleshooting than often more narrowly focussed experts from overseas. I have found that Australian manufacturers historically have a better success rate on projects where the end user’s engineers have a strong influence on equipment selection. I also believe that when this occurs, the benefit of using local suppliers is normally demonstrated through better product support and consequently faster commissioning, better ongoing reliability and better product knowledge transfer. The challenge for pump users is to find a way to ensure that the concept of TCOO is implemented in full. The challenge for the suppliers is to ensure that we do indeed provide the best possible customer support. Ron Astall President, Pump Industry Australia 1