The Hidden Costs: Why TCO Reduction Fails in Manufacturing
Achieving true Total Cost of Ownership (TCO) savings is critical, yet many manufacturing businesses struggle to look past the unit price. At Howcroft Group, we recognise that the biggest hurdles to reducing TCO are rarely technical—they are cultural and organisational.
Here are the key challenges our partners face, and how we help turn them into opportunities for efficiency:
Challenge 1: Overcoming the "Status Quo Bias"
The most expensive phrase in manufacturing is, "That's just the way it is." This resistance to change blinds teams to obvious inefficiencies.
The Problem:
Teams often drown out the sound of a noisy conveyor with a loud radio, instead of addressing the root cause. This is more than noise - it's a massive energy drain caused by inefficient bearings forcing the motor to work harder, wasting electricity and incurring unnecessary wear.
The Howcroft Solution:
We go beyond supplying parts. We conduct Operational Audits to identify hidden inefficiencies like this. By providing the right quality bearings and offering predictive maintenance insight, we turn chronic issues into immediate energy and cost savings.
Challenge 2: The Data Disconnect & Misaligned Goals
Calculating TCO requires accurate data and aligned goals, which is often difficult due to organisational silos.
The Problem:
Teams struggle to identify and access the right data held by different business functions. The disparity between how procurement teams purchase supplies and how the shop floor needs to operate creates unnecessary conflict and hidden costs.
The Howcroft Solution:
We help bridge the gap between Procurement and the Shop Floor. By providing detailed historic MRO data and collaborating on integrated supply models, we help you build a compelling business case that demonstrates the tangible financial impact of TCO reduction.
Challenge 3: The Fear of Change & Staff Utilisation
People are naturally reluctant to change, especially when the financial benefits are not immediately obvious or tangible.
The Problem:
Streamlining processes often saves staff hours, but this doesn't immediately cut salary costs. This perceived "hassle" of implementation can stop valuable improvements before they even start.
The Howcroft Solution:
Our solutions, like Vending and Vendor-Managed Inventory (VMI), are designed to free up staff time from routine tasks. We partner with you to ensure those personnel are then re-deployed to perform jobs they are most skilled for—elevating your team's overall value instead of reducing headcount.
Partner with Howcroft Group to shift the conversation from price to long-term profitability and unlock the substantial savings TCO was designed to deliver.
Focusing on Collaboration and TCO
" We know procurement is pressed for price cuts, but the future of MRO success lies in collaboration. By working with Maintenance, Engineering, and Finance on a TCO model, we move procurement from a cost center to a strategic value-add for the entire business. "
Ready to Eliminate The Hidden Costs of MRO?
You've identified the challenges: the costly status quo, the internal data silos, and the hidden process expenses. Now, it's time to build the customized Total Cost of Ownership (TCO) strategy that your manufacturing business needs.
By partnering with Howcroft Group, you gain a dedicated MRO expert focused on sustainable savings, not just low unit prices.
Connect with our TCO Strategy Team to discuss solutions that will:
Bridge the Gap between Procurement, Maintenance, and Finance.
Eliminate Process Waste by quantifying the true cost of ad-hoc purchasing.
Re-deploy Staff to high-value, skilled tasks through inventory automation.
Stop managing symptoms and start solving the real problem.