Lifecycle costing is so important for manufacturing businesses, yet so many companies overlook the process. When manufacturers weigh up surface treatment options, in doing so the most effective options can be all too easily dismissed.

In this Alphatek blog, we outline how lifecycle costing is achieved and how this helps drive a more cost-effective, efficient, and well-rounded approach to surface treatment for manufacturing components.

What Is The Importance Of Life Cycle Costing?

The lifecycle costing process is used by businesses when they’re planning for the long term future of their components. Companies follow this strategic planning to achieve and maximise their long-term profits.

Businesses who ignore life cycle costing and don’t account for it as being an important process, are more often than not left with costly outgoings. An example could be purchasing an asset or component at a lower cost because they think it is the cheaper and more viable option.

Ignoring the costs can potentially be the best thing you can do. Costs may occur if purchasing fewer quality components, and in the long run, end up costing your company more money.

What Are The Stages Of Lifecycle Costing?

There are four key production phases, each of which has its own associated costs. These are design, manufacture, operation, and end of life.

  • Design: Starting off the costs is design. These costs are associated with the research and development of the product to be created, including designing the product.
  • Manufacture: The manufacturing phase involves the costs of the material and labour associated with the product, as well as overhead costs.
  • Operation: The operation stage includes costs related to bringing the product to market. During this phase, there are distribution costs as well as advertising costs.
  • End of life: This phase is the disposal costs associated with the removal of the product.

What Are The Benefits Of Lifecycle Costing?

  • Lifecycle costing results in early action to generate revenue or lower costs in the long run. Several factors need to be managed to maximise return in a product.
  • The better decision should follow from a more accurate and realistic analysis of revenues and costs within a particular life cycle stage.
  • It can promote long term rewards in contrast to short term rewards.
  • It provides an overall framework for considering total incremental costs over the entire span of a product.

What Are The Advantages Of Life Cycle Costing Over Simple Payback?

The lifecycle costing strategy provides a clearer picture of the value of the investment over a longer period. Considering the cost savings over five years, ten years, fifth teen years or even twenty years provides a more legitimate assessment of the project’s value over time than a simple payback period method.

Alphatek: Spray Coating Specialists

At Alphatek, we aim to help our customers make the most informed decision when weighing up their spray coating options. For certain applications, the lowest cost option makes business sense at the time, but for many, especially those thinking about manufacturing components lifecycle costs it is worth investing in a higher quality coating to reduce costly downtime, maintenance, reliability, and quality issues further down the line. 

Get In Touch

There’s no real shortcut to experience. Here at Alphatek, we have a combined over 100 years of cumulative coating expertise.

Working closely with our customers over the years, we have developed our products and services to deliver the best value, most effective thermal spray coatings solution, first time, every time and with a stress-free service that suits everyone.

For Metal Spraying and Thermal Spray Coating specialists, look no further than us, Alphatek. You can call us directly on 01706 821021, or you can email us at postbox@alphatek.co.uk.

Alternatively, if you would like to visit us, we are located 20 miles north of Manchester. Just be wary of our opening times.