The Cost of Doing Nothing – When Never is a Good Time to Upgrade
March 1, 2019
By : vanguard
It seems like such a big gap between wanting to do something and actually doing it!
You may ‘um and uh’ over the perceived cost and personal value when upgrading to the newest iPhone or even upgrading your car to the newest model. After some debate and a cost benefit analysis you finally decide to splash a little extra cash and upgrade. Your post buyer’s evaluation tells you that this was a fantastic decision and you’re now not sure how you used to live without facial recognition on your phone or that fancy reverse camera.
According to the business dictionary costed risk is the probability of loss due to cost overrun. This can be a risk in business and the decision to invest in a product, service or solution with the need to bear that cost risk can be a large step to make.
What does costed risk look like to us?
A lot of food & beverage processing plants still utilise plant and water treatment technology from the 1970’s and 80’s, often due to cost cutting over the years, hindering investment. This technology, while sturdy, is often cumbersome to operate, energy and water inefficient and likely close to structural failure in some cases. Over time a lot of plants have had various Band-Aid upgrades with different levels of automation and control implemented.
This kind of quick fix can lead to a hodgepodge of brands, equipment types, varying qualities and furthermore – operational instructions passed by word of mouth, with incomplete documentation. Often these problems remain hidden and the true cost of inaction is unknown. Additionally, as Australian EPA & Water Authority regulatory standards get tighter, it becomes more and more costly to upgrade to the required new equipment.
With these problems being embedded in the organisation for many, many years with no upgrades, the long term OPEX impact have been costly with overall water expenditure being through the roof. To food and beverage companies the associated costed risk is high.
So how do you convert costed risk into positive action?
The positive action comes from a proper evaluation instead of an estimated high value assessment of the upgrade cost. In some cases the costed risk isn’t as high as initially pictured.
Once processing plants hear about Waterform’s services they inquire about a site analysis. By taking an on-the-ground analysis with automation, control and treatment experts Waterform can unravel the complexities of proposed upgrades.
In our experience the ability to drill down into the reality on the ground requires more than ‘white collar consulting’, it requires in depth knowledge gained with working with such equipment. This analysis allows a proper cost to be calculated for any updates rather than paying an uptown consultant to plug an enormous figure from the air to cover all eventualities.
This in turn means the costs of inaction can be explained by this level of assessment to assist senior management in decision making, with accurate upgrade costing models. Also, companies are now taking advantage of Waterform’s new WaterBank software and nil-capex upgrades options with strict performance guarantees, this to avoids the headache of raising rare lumps of capital in the first place.
Post ground analysis processing plants implement some changes to their water treatment plants and realise the incredible reduction in fixed costs. Building a trustworthy business partnership with Waterform technologies in turn saves processers significant OPEX and future proofs organisations.
Access Case studies from leading processors such as LION and BAIADA now.
Contact the team today about taking the next step to evaluate your water plant costed risks.