Technology management at Mondi
When it came to the procurement of industrial trucks, Mondi lacked a benchmark for the total costs of ownership. This made it hard for the company to work out which product was actually the most effective for their particular needs from an overall cost and efficiency perspective. The information that the manufacturers provide, for example on fuel consumption and the turning radius, isn’t enough to draw any valid conclusions that might justify one set of procurement costs over another.
But how can the different investment costs and total cost of ownership be compared?
CHG-MERIDIAN produced a fleet TCO analysis in which it used a productivity test to compare different makes of the same truck type.
At the pilot site in Poland, the test trucks were equipped with sensors designed to track their performance and operating data for subsequent analysis. “The test drivers had to complete the kind of loading and unloading jobs that they would normally be expected to do for the company – as quickly as possible and at the same frequency. During the test drives, the team collected data on loading/unloading performance, productivity, and handling for subsequent evaluation and TCO analysis.
This revealed differences between the investment costs for the different makes.
Mondi received a detailed decision-making matrix that helped it to weigh up the acquisition costs in relation to, for example, the optimum useful life, the replacement cycles, and the finance model. Thanks to the new decision-making matrix, the management team at Mondi now knows what the price differences need to be for the purchasing department to be able to justify opting for a brand that is 20 percent more expensive because it can show that the investment will pay off in terms of total cost of ownership.