Determining a product’s Total Cost of Ownership (TCO) is an easy way to realize how a product will give you the fastest return on investment (ROI).
TCO examines the true cost of something over its entire lifespan, not just the initial purchase price. It considers all costs and factors to gain a more complete understanding of how much something really costs. Caster Concepts’ ROI Calculator can help you do that.
This is extremely helpful when comparing different products or services to see which one is actually the most economical and gives the best long-term ROI.
Even though Caster Concepts Casters are more expensive initially, they are designed and manufactured to last longer. This long-term value is illustrated in the case study below.
A top-three automotive manufacturer was having issues with the hard-plastic wheels used on their material handling carts. The wheels constantly picked up floor debris and wore quickly, requiring replacements every three months. These replacement costs added up to $90,000 per year.
The company switched to Maintenance-free TWERGO® 6”×3” and 8”×3” ergonomic wheels. TWERGO wheels feature a tapered twin-wheel design that spins independently, minimizing friction and wear when turning. Their special polyurethane formula is also designed to pick up less floor debris.
Return On Investment Cost Breakdown
|
Caster cost $70 x 4 for a cart |
Total = $280 per cart |
|
20 carts at $280 |
Total = $5,600 cost for replacing wheels each time. |
|
Replacement every 3 months = $5,600 |
Total for year = $22,400 |
By switching to TWERGO® wheels, the company was able to expand the casters’ life span to over a year (and they are still going strong). Using the ROI calculator, the total cost of the new TWERGO Casters was recouped in less than three months.
With the ability of TWERGO casters to reduce push force by more than 50%, TWERGO can deliver more parts to an assembly line with fewer carts and trips. Here’s another example of how better ergonomics generate a better ROI:
Example: A loaded cart used to deliver engine parts in an auto plant weighs 1,200 lbs. The cart cannot weigh anymore because it needs to stay below the company standard for push force requirements of 40 lbs. Initial push force is the pounds of force it takes to get a cart moving.
Using this information, let’s say the auto plant would typically order 200 carts, with each cart holding 50 parts. Let’s assume each cart costs $2,500, which puts their spend at $500,000 to outfit the assembly line. Now, because Twergo reduces push force by >50%, the automaker can put 100 parts (twice as many parts) on each cart. Twergo can carry 2,400 lbs. and still not exced the 40 lbs. maximum start force. You’ve effectively cut the cart fleet needed in half and have an upfront savings of $250,000.
A caster with a too small or inconsistent swivel section progressively becomes more difficult to push, raising the potential for back injuries. This situation also shortens a caster’s lifespan while increasing the frequency of caster replacement.
A good example of this happened to a large food processor. Frequent caster and wheel failure due to moisture was causing significant downtime and frequent repair costs.
The solution? A moisture-resistant polyurethane wheel with a sealed swivel bearing (maintenance-free) from Caster Concepts. The sealed, maintenance-free casters eliminate the need for regular lubrication, cleaning, and other maintenance tasks. This saves time and reduces labor costs associated with ongoing maintenance activities. They are also more durable for a longer service life.
In this instance, by installing a maintenance-free caster from Caster Concepts, downtime due to caster failure and replacement costs was reduced by more than 50%. Maintenance labor costs also decreased by 75%. The additional cost upfront more than paid for itself over a longer-lasting and maintenance-free life cycle.
Questions? Contact us or call 888-380-1855. You can also Try our ROI Calculator here. Let’s calculate some savings!
