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What the Heck Is Total Cost Of Ownership of A Rubber Machinery?

“What the heck is total cost of ownership of a rubber machinery?”. If this question has popped up in your heads after reading  Prof. Dr.-Ing Andreas Limper’s interview, you are not alone.

Neither is this concept new.

Dr. Limper explains, in his interview, that the inability of a customer to see the ‘holistic perspective’ and evaluate machinery on ‘ownership cost’ basis is frustrating. This is because, most buyers select a rubber machinery on the ‘initial cost’.

“So what?” you may ask me.

And at this stage of our conversation, if I add that your ‘initial cost’ (basis which you made the strategic capital purchase) represents not more than 13-15% of your ownership cost!

TCO - Iceberg

Reference Image Only

Well, do I have your attention now?

Let me explain.

Simply put, the Total Cost of Ownership (TCO) is the total cost of your rubber machinery over the whole of its life. You can also complexly word it as ‘sum total of your purchase, ownership and post-ownership costs of your rubber machinery in a quantitative and qualitative manner’. (jargons?)

This means in your TCO calculations, all your obvious and hidden costs of ownership across the full life cycle of the rubber machinery has to be considered. There is often room for judgement and sometimes different opinions, in deciding what is the appropriate lifespan for you to analyse.

This is because some of your costs will be one-off, others will be recurring – so you need to know how many years you intend to use this machinery. For example, you could consider Depreciable Life (i.e the number of years in which the machinery is depreciated) or Economic Life (i.e the number of years in which the machinery returns more value to you than it costs to own, operate, and maintain) or Service Life (i.e. the number of years the machinery will actually be in service).

In some cases there may be some residual value in the machinery or parts. However, you will also have costs associated with its disposal.

Here’s a typical compilation of all costs associated with the purchase of your rubber machinery.

Purchasing Costs (includes but not limited to)

  • Market Research including business directory purchase
  • Consulting or specialist advice for machinery assessment and its appropriateness for your use
  • Supplier identification costs like administration costs, telephone calls to discuss, travel, accommodation costs for factory visit and negotiations, etc.
  • Purchase Price of the Machinery & its required accessories
  • Delivery Costs (freight) and insurance
  • Warranties
  • Installation, erection and commissioning costs
  • Trial run and Training
  • Licences for software and automation
  • Insurance costs

Operating Costs (includes but not limited to)

  • Consumables, ‘Wear & Tear’ Components
  • Regular Maintenance or Servicing (Self or Outsourced)
  • Spare Parts
  • Energy/Electricity Consumption Costs
  • Breakdowns & Repair Costs
  • Extended Warranties
  • Operator Costs
  • Cost of replacement service during a breakdown such as hiring (another) machinery or outsourcing the work.
  • Licence renewal/ software upgradation costs
  • Insurance renewal costs

Disposal Costs (includes but not limited to)

  • Decommissioning costs, involving technical specialists.
  • Transportation of the machinery away from the Plant
  • Disposal Fees of machinery and/or its parts as per your country laws
  • Data migration costs from existing control instrumentation and records
  • Other related cost of change of machinery after its life
  • Site clean-up costs

Resale Value: You should remember to add back any money received on the resale of your rubber machinery and its accessories.

Your formula for calculating the TCO thus becomes

TCO = Purchase Price + Regular Recurring Costs + Irregular One-off Costs + Disposal Costs – Income Generated – Revenue on Disposal/Resale Value. 

Do you get the ‘drift’ now?  

Do you agree with me that your decision to buy a rubber machinery only on the basis of initial purchase price could be a flawed strategy and need a rethink (…..if you are doing this, like the majority of other rubber machinery buyers!!).

Having outlined these thoughts, let me also caution you that the success of your evaluation depends on the type of the machinery you buy.

For example, you would not want to get into the same evaluation techniques when you buy a relatively simplistic (or one-off) machinery like bale cutter or sheet feeder as compared to a project investment of a mixing line or rubber mixing room.

Do let me know!

Summing up, the Total Cost of Ownership (TCO) is the total cost of your rubber machinery over the whole of its life and, I think, should be the most important criterion when you invest in projects and/or strategic capital purchases.


Contact me if you seek more details on this topic. Or if  you are looking for New or Used Rubber Machinery?

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Why Hydraulic Ram in an Internal Mixer?

In internal mixers, hydraulic ram assembly is an apt replacement (over pneumatic ram) because they improve rubber compounding quality.

In pneumatic rams, pressure may vary while the hydraulic version ensures constant, reproducible ram pressure. When you cut compressed air, operating costs reduce because you remove the central compressed air requirement in your plant. You also remove the maintenance issues associated with these air systems in the process. This leads to energy savings in your operations.

A constant pressure from hydraulically actuated rams eliminates variations in ram pressure caused by varying compressed air-supply to the mixers’ pneumatic cylinders. Hence, these are more efficient than air compressors for application of sustained batch-mixing pressure. This in turn, provides consistent mixing process conditions that enhances product uniformity – all of which leads to improved mix quality.

The hydraulic rams can be fine controlled with the hydraulic power. The result is shorter mixing cycles, higher productivity and improved batch-to-batch consistency. Further, the hydraulic ram reduces the noise level within the vicinity of the mixer. So, apart from improving the work environment they use less energy and are quieter in operation.

Representative Image of A Rebuild Internal Mixer

Representative Image of A Rebuild Internal Mixer

In intermeshing type of mixers, cooling water passed through ram provides extra cooling. This control feature is critical when processing heat-sensitive compounds.

Please remember, this is a technology upgrade. Hence, when you choose your tangential and intermeshing mixer, you need to ask for this option. Else, you may continue to receive manufacturer’s standard pneumatic ram only.

Existing pneumatic ram on your internal mixers can be converted to hydraulic ram. Internal mixer manufacturers like HF Mixing Group, Kobelco, Bainite Machines, etc can guide you with energy-saving data for your mixer and offer conversion at an optimized investment.

Let us know if you found this post useful to shortlist energy-efficient features for your next internal mixer purchase.


If you liked this article, please do not forget to share with your colleagues and friends. And If you would like to be informed of our articles regularly, please register with us for free updates today.