How to optimize the TCO of a centrifugal pump
The purchase price is only one component of the Total Cost of Ownership (TCO). How much does a centrifugal pump cost? The purchase price is not what you should consider, but rather the sum of the costs incurred throughout its entire lifecycle, which is the pump's TCO (Total Cost of Ownership).
TCO is a fundamental metric in the system design phase, when careful measurement and analysis of total costs must be performed in order to then make the best equipment purchasing decisions. TCO optimization is a process that is difficult for companies to plan and sustain, but it is worthwhile precisely because it contributes to making better decisions and returning value in terms of competitiveness. Cost optimization involves multiple company functions, from operations, to maintenance, to procurement. The common goal is to reduce total costs.
How to calculate the TCO of a centrifugal pump
To perform the TCO analysis, all direct and indirect costs of acquiring, commissioning, operating, maintaining, and disposing of a pump must be estimated over a specified period. The analysis can be used to effectively compare alternative approaches (e.g., purchase or lease?). These costs can be understood using the following formula for pumping systems. This formula can be extended to almost all classes of production equipment:
TCO = Ca + Cc + Co + Cm + Cp + Cd
| Ca | Acquisition cost | includes engineering, procurement, equipment cost, auxiliary equipment cost, inspections, and documentation |
| This is a common abbreviation used in emails and other correspondence. It stands for "carbon copy." When you carbon copy someone on an email, you are sending them a copy of the message, but they are not the primary recipient. They are essentially being kept in the loop. | Commissioning cost | Include construction, testing, training, and technical support costs |
| Co | Operating cost | include energy, operational staff, structural costs, support, and raw material management |
| in | Maintenance cost | includes maintenance personnel, maintenance plant cost, test equipment, maintenance support and operating costs, spare parts for maintenance, and repair parts |
| Cp | Production cost | include production losses, quality costs, environmental costs, and redundancy costs |
| CD | Cost of removal and disposal | less any salvage value |
It is interesting to note that the initial cost typically accounts for less than 10% of the TCO. Energy and maintenance costs have at least five times more relevance, but they are rarely considered during the selection process.
Optimizing TCO from the design stage
Optimizing TCO begins in the design phase. Choosing the right equipment for the right application is crucial for operating efficiently and reducing energy, operational, and maintenance costs, which represent over 60 percent of the TCO. Often, oversized centrifugal pumps are chosen to cover most services and applications with the same machine. However, if the system flow from the pump is too high, energy costs for its operation increase, the equipment's operating life is reduced, and downtime likely increases as well.
When a pump operates optimally, or at its Best Efficiency Point (BEP), the liquid flow is constant, and the radial forces acting on the impeller are balanced. This allows the pump to experience maximum efficiency and minimum vibration, extending the pump's lifespan. If the pump operates too far at the beginning or end of its curve, the pumped fluid is unable to circulate correctly within the pump and lubricate all internal components, increasing the likelihood of malfunctions.
The impact on the warehouse
In recent years, CDR Pompe has decided to invest significant resources in after-sales support in order to ensure ever-improving service for its customers, both in terms of spare parts supply and pump maintenance and repair services. Our primary goal is to accurately resolve any issues customers may encounter during the use and maintenance of their pumps as quickly as possible. To this end, CDR Pompe has established a dedicated warehouse of spare parts ready for immediate shipment, enabling us to deliver parts within 3 business days to quickly resolve any system emergencies and prevent unwelcome system downtime for our customers.
The ready-to-ship spare parts warehouse is joined by the brand-new ready-to-ship repair warehouse; an important innovation that once again allows us to guarantee excellent assistance and support to our customers. Pumps being repaired at our in-house workshop are indeed repaired in a particularly short time thanks to this new ready-to-ship warehouse.
CDR Pompe also guarantees the authenticity of its replacement parts. Original replacement parts are manufactured with the same tolerances and clearances, thus ensuring a correct, reliable, and interchangeable replacement.
Using non-original spare parts or parts not produced by the centrifugal pump supplier can cause efficiency and performance problems. Choosing equipment and components solely based on purchase price can lead to undesirable consequences that increase the TCO.
Purchasing spare parts from different suppliers requires operators and maintenance personnel to be trained on the guidelines and operating procedures of each one. Additionally, it will be necessary to procure and store different components and spare parts for each supplier, leading to an increase in the value of inventory for maintenance and repairs.
How much do quality repairs matter
Pumps repaired in companies’ in-house workshops usually fail prematurely, either because workers rarely follow standards and guidelines correctly or because operators are not properly trained. In contrast, one of CDR Pompe’s main objectives is to make its in-house workshop increasingly efficient through ongoing training of workers specialized in the assembly and disassembly of centrifugal pumps.
A proactive maintenance culture
It is often believed that the maintenance department alone can provide a sufficient level of reliability and significantly contribute to the improvement of TCO. While maintenance is a necessary component, TCO optimization must be an organization-wide initiative, established through the implementation of disciplined and integrated processes and practices. To create a proactive maintenance culture and achieve reliability, it is essential that operational parameters are well-defined and documented through standard procedures, and that operators are adequately trained to follow them.
The TCO value
Efforts made to analyze and optimize TCO, rather than just acquisition costs, can yield a positive return on investment.
TCO isn't just a number: it's important data, not fixed (just think of the progressive decrease in depreciation of an asset). It can unlock value if used with equipment usage data and help make better, more cost-effective long-term decisions.