We provide a lot of pumps for many different industries in Australia. Our customers represent a diverse cross-section of different industries. But if there’s one thing they all have in common, it’s that everyone is concerned about the costs of their pumping systems.
However, many are concerned about the front end or initial costs, but don’t pay enough attention to life-cycle costs. This is the cost of operating the equipment for the duration of its effective life. Everyone pays attention to how much a pumping system costs and how much it costs to install. But they aren’t the only factors that decide whether or not a pumping system is providing a great ROI or return on investment.
Here is a short list of factors that determine the real cost of your pumping system.
- Purchase price: equipment and support system
- Commissioning and installation
- Maintenance costs: labour and materials
- Operating cost: labour
- Support system maintenance and repair
- Energy costs
- Environmental factors
- Downtime and associated loss of production
- Decommissioning and disposal
Evaluation Techniques
One of the easiest tools for assessing life-cycle costs is Simple Payback or SPB. The initial investment costs are divided by the savings per year to produce the SPB, or the time it will take you to recoup your initial investment.
If a pumping system costs you $2,000 dollars and saves you $1,000 a year, the SPB is two years. If the expected life of the pump is three years, you are running “free” for the last year. But if the expected life of the pump or system is ten years, you will be running “free” for eight years.
Internal rate of return is a number that takes the life expectancy of the pump into consideration. The longer, the life, the higher the rate of return.
Choose High Quality Pumps
At Pump Solutions Australasia, we only sell high quality pumps that are going to last a long time. This is going to provide you with the best rate of return. It is also going to reduce your downtime and the lost revenue that often goes with it.
To learn more, call us today: 08 9408 1544.