Frequently when a capital investment or other large modification project is proposed in a manufacturing plant, discussions focus on how to minimize the cost of a capital project. This makes a lot of sense - why spend more than we have to? The typical tension is the plant wants to "gold plate" everything, install redundancy, capitalize spare parts and so on - the project managers only worry about "on time and on budget" and they walk away after start up - the financial types think about time value of money DCF-ROI and see any lower cost option as a better project based on the financials.
We agree with all of these perspectives, but believe the best solution is to take a step back and look beyond the cost of the project. I have frequently said that I don't care how much a capital project costs! After people recover, and assuming they have not thrown me out of the room; I make the point that what I think is important is the total life cycle cost of a project vs just the initial capital outlay. Which would you prefer - a project that costs $200 with an annual operating cost of $20, or a project that costs $150 with an annual operating cost of $75? Hmm... The initial cost of a capital project is only one part of the overall evaluation.
Synchronous LLC has discontinued on site consultations, and we regret that we are currently unable to accept new clients. We are however, strongly committed to maintaining a dialogue on operational excellence for the process industry - so check this space! Please send us an information request at Sales@SynchronousLLC or send us a note to our web site www.SynchronousLLC.com and we will be happy to recommend a highly competent practitioner to assist you. We do not recommend or refer anyone that we do not know well, and any referral of ours meets our standards for excellence.
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