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Finding Real Value

Posted July 25, 2015 12:00 AM by Engineering360 eNewsletter

Too many plant managers fail to get the full value of capital expenditures, using investments to replicate the function of outdated technology with new technology. In so doing, they miss the opportunity to leverage the full capability of the new equipment. The root cause of this failure lies in the tendency to measure cost instead of taking into account the benefit of the new equipment over its entire lifecycle. Automation World looks at these misperceptions and explains how plant managers and engineers can correct these crippling practices with real-time measurements, modeling, and a process called front-end loading.


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Join Date: Apr 2005
Location: St. Louis, MO. USA
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Re: Finding Real Value

07/25/2015 6:28 PM

So true, evaluating estimated life-cycle cost is one the most overlooked up-front decision making elements now days. I believe in part, quarterly capitalism helped bring about this less effective mentality of focusing on lowest upfront cost instead of long term life-cycle cost. When I first started out in the industry (20+yrs ago), it was all about "how can we reduce life-cycle cost?", now days I often see in young engineers and management, eyes glazing over when I try to emphasize they focus on life-cycle cost instead of initial cost so much.

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