Effectively applying the total cost of ownership equation to the process automation industries

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Overview:
Acronyms abound in the manufacturing industries. These common three-letter symbols are everywhere from process equations, to annual reports, to vendor product names. Many industry professionals know them by reference, but how many of these acronyms are actually well defined and understood?

This document will decode the background behind one of the manufacturing industries' most-commonly used, yet rarely fully understood, acronyms: TCO. Otherwise known as total cost of ownership.

TCO has been likened to other acronyms such as ROI (return on investment), TBO (total benefits of ownership), TCA (total cost of acquisition) and in some cases, TVO (total value of ownership). With all of these interpretations abounding, it's easy to see why many don't fully grasp the concept of TCO. All indications, however, point to TCO becoming a greater factor in the future of the process industries as manufacturers are constantly tasked with producing higher-quality products using fewer resources. Maximizing monetary resources will go a long way towards achieving this — which means it would behoove most companies to have as tight a grasp on the concept of TCO as possible.

The most critical truth to realize is that a longer product lifecycle means a lower TCO that a company can expect to pay each year.