There are two obvious scenarios that represent your current set up.
#1: You use your own aging system probably 10 years or older.
#2: You currently outsource your testing needs
Scenario 1 – Replacing Your Old System
The problem with an existing older system is that you can get it to perform the tests you need sometimes with great effort and requiring a third party software program! So why would you justify changing something that works?
It’s really a question of efficiency and cost. Something that works could be causing painful consequences in the production process:
The time to complete a test is significantly slower than a new system equipped with today’s materials testing software and controllers.
The ability to properly and accurately perform measurements according to a new test requirement is marginal at best on your existing testing system.
The capacity to perform the increased volume of tests that you now require is no longer met by your older system. It hasn’t scaled with your business.
The total cost including operator time on a per test basis has crept up each year and now sits at an unacceptable level.
The volume of shipments in your business has grown significantly over the last 10 years. Therefore production processes that delay shipments now cause huge opportunity costs in lost sales.
The ability to extract metrics and analyze them is cumbersome, inconsistent and unreliable.
Your assumptions surrounding an investment in new technology can change quite dramatically as the years roll by. Over a 10 year period you need to really audit the costs of your set up. Ask yourself , what am I trying to achieve in 2013 from my testing system?
Once you conduct a review on this basis it becomes relatively easy to determine the operational efficiencies that a new system delivers. Our previous post, ROI Calculator for Material Testing Systems will neatly generate the relevant ROI% for your unique situation using input from your review.
Scenario 2 – Bringing Testing In-house
In this scenario , you currently outsource your material testing needs to a 3rd party. So why would you consider investing in your own system. In our experience the following issues over time become unacceptable:
The turnaround time is getting worse creating production bottlenecks
The annual cost as a % of shipped value of goods is rising
The value of stock tied up at the outsourcer
Penalties incurred due to missed deadlines are rising
Necessary metrics to influence the design of the finished product are not available
The ability to innovate with different materials, the ability to iterate is limited
The complexity of testing especially in say biomedical is beyond the scope of the outsourcer
Outsourcing any activity can be a great choice for many companies. It could be because of payroll, IT, HR, PR, legal services etc. However, it is important to recognize that the functionality of a new material testing system relative to cost has improved dramatically over the last 10 years. It may well be worth taking a second look at your decision to outsource. Our ROI Calculator post will help wrap your head around the key financial issues to generate a measured ROI%. This will also help support the non-financial reasons such as having more control over your own destiny.
At ADMET, we try to make diagnosing these scenarios with our prospects a standard part of our conversation so that we can help them make better decisions.