Abstract
Purpose - To present theories for total cost of ownership (TCO)
methodology in assembly system trade-off analysis and to show benefits of the
methodology as a decision support in system selection.
Design/methodology/approach - The developed TCO methodology is a combination
of factory simulation, system performance and loss factor evaluation using
overall equipment efficiency, system life cycle costing, and assembled unit
cost analysis including cost of bad quality and rework. Findings - The
purchase price of equipment is just one costelement in the comparison. TCO
shows how important it is to analyse all the cost, direct and indirect,
incurred throughout the life cycle of an equipment, including acquisition and
installation, operations and maintenance, and end-of-life management. TCO
methodology pinpoints costs that could be easily underestimated, such as
quality and rework as well as all the costs of running the system. Research
limitations/implications - The methodology is partially based on semiconductor
industry standards and other asset comparison methodology, which are now
integrated and applied also for electromechanical final assembly. Development
continues. Practical implications - The methodology is useful in system
integrator and end-user collaboration, where both can use similar formulae in
system evaluation and trade-off analysis. Integration to component-based
simulation adds system visualisation and simulation analysis and combines
system configuration with cost analysis into a tool for the sales engineer.
Originality/value - Integration of different analysis methods improves the
quality of decisions. The TCO methodology is a systematic way to analyse
system cost and performance issues. With proper use of the TCO methodology it
is possible to justify investments to automation and modular re-configurable
hardware. (19 refs.)
Original language | English |
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Pages (from-to) | 44-54 |
Journal | Assembly Automation |
Volume | 27 |
Issue number | 1 |
DOIs | |
Publication status | Published - 2007 |
MoE publication type | A1 Journal article-refereed |
Keywords
- Assembly, Cost effectiveness, Life cycle costs