Glyn Jones, Group Chairman and CEO Trolex, a global supplier of gas and dust detection, connector solutions, strata monitoring and infotainment systems to the mining, hazardous industry and transportation markets, explores how the cost of ownership is stifling innovation and safety in industry.
From petrochemicals to mining, automotive to construction, organisations are continually focused on improving efficiency and making effective use of financial resources.
However, these industries are also highly regulated and face inflexible budgets, as well as high demands and significant challenges to remain productive and safe, while financially viable.
Protecting the workforce has been one of the biggest challenges facing mining and industrial operations in the past, and from utilising individual gas monitoring devices, to ventilation and dust extraction, the cost of using more technologically advanced equipment can quickly add up.
And it is not just the initial up-front cost of this equipment which is placing a financial burden on budgets, in many cases it is the cost of the replaceable consumables, such as filters and gas cells, that dominate annual expenditure.
The true cost of consumables
But are these costs for consumables actually justified? Or are suppliers trying to take advantage of the fact that many buyers are not properly educated about the full cost of ownership over a life-cycle, and so end up paying up to a 1,000% mark-up on these consumables.
Unfortunately, the latter is more often true.
As an example, at cost, the price to replace cells in 1,000 gas detection units (with four gas cells and assuming a three-year swap-out cycle) would be in the region of £200,000 over a six-year period, depending on the exact configuration and manufacturer of the cells.
However, with suppliers driving up the cost of ownership over this cycle, the cost to the customer often ends up being closer to £2m – a 10-fold increase.
This results in the original cost of the equipment – anything between £400,000 to £600,000 typically – actually ending up a small fraction of the overall cost of ownership over time.
With operations incurring these costs it is not hard to see how businesses are struggling to keep finances under control.
For the future financial viability of industrial operations, it is essential that these costs of consumables are reduced.
Freeing up finances to meet compliance needs
Reducing the cost of consumables would also free up budgets for further health and safety improvements across an operation, allowing managers to investigate innovative technologies which will be more beneficial and help to meet strict safety regulations.
Typically, an operation’s safety equipment portfolio will be reviewed on a four to five year rolling period. This is not only to ensure new regulations are abided by, but to ensure workers are benefitting from the latest technology to improve safety and drive costs down.
With such tight existing regulations, and a more stringent overview when it comes to employee safety, of course any product comparison needs a robust assessment of performance and quality, ensuring that equipment can actually stand up to the challenge of operating in hazardous environments.
But, when the consumables such as gas detection cells are exactly the same product, often from exactly the same manufacturer, the comparison can only be made on price.
And the implications for safety of such remarkable reductions in cost are certainly worth considering.
Operatives who routinely handle gas detectors will be aware of the recommended life-cycle for any particular cell – and many units will raise an alert if the cell is due to be replaced – reducing the likelihood that a unit will become completely dysfunctional.
However, knowing that budgets are tight and replacing a cell will be a costly commitment, it could become a temptation to push the replacement cycle as far as possible, resulting in a reduction in safety as cells degrade over time and become less sensitive and accurate.
Multi-parameter Environmental Monitoring
Environmental monitoring is a much more complex process than in previous years, with the need to connect multiple disparate environmental control systems, both static and mobile, throughout the working area.
Juggling personal gas detection with fixed gas detection, wireless gas detection, as well as dust, temperature, vibration and airflow monitoring, often means the cost and complexity of environmental control continue to rise.
The modern industrial arena is one dominated by the need for real-time information to support immediate remediation and deep, continuous insight into the quality of the environment. The challenge however, is in hooking together diverse systems to provide that essential overview.
Implementing a single environmental solution across the entire operation can not only transform cost of acquisition but also drive down the costs associated with managing multiple supplier relationships and creating different maintenance cycles.
Future Proofing the Business
Reducing the cost of ownership, specifically through reducing the cost of consumables, is essential for the future of industrial operations, and especially for the continuing implementation of better technology to improve health and safety.
Freeing up budgets for safety managers to explore new and innovative safeguarding solutions will bring both immediate safety benefits whilst also future proofing the financial viability of industries for years to come.
The ability to confidently consider improvements in areas such as ventilation and personal monitoring enable organisations to go beyond basic compliance to current legislative requirements and proactively future proof the business.
Indeed, with the increasing sophistication of personal monitoring devices, including employee vital signs, there is an inexorable shift towards individually focused safety regulations.
The ability to combine real-time information about an individual’s health – from air quality to heart rate – will become increasingly key in safeguarding individuals, enabling safety managers to take immediate action in the event of an incident and provide organisations with accurate data to mitigate the risk of legal action in the future.
But for this to happen on any meaningful scale, these managers and operations must first be relieved of the financial burden currently being placed on them by suppliers who are consistently raising prices to the point that all other innovation is being stifled by the current cost of ownership.