Articles & Case Studies

Pump lifecycle costs – why manufacturers and pump users alike should take notice

Posted: Thursday 16th October 2008

Bob Went, Group Consultant for ITT Water & Wastewater, the leading solutions provider within the water and wastewater treatment market, comments on why an LCC (Life Cycle Cost) approach is essential for pump installations.

“Pumping installations are critical to all water and wastewater-related services but are also important in any process environment and so affect us all. Even daily tasks such as using the washing machine or driving a car require pumps, so it is imperative that the cost of a pump’s lifecycle is analysed critically.

“It was in my previous role as Principal Mechanical Engineer for a leading utilities supplier, that I first got involved with LCC because we were beginning to suffer problems with pumping installations that were procured on a least cost basis. At that time contracts and procurement processes generally focused on lowest purchase price. We would issue a technical specification and the product meeting that specification at the lowest cost would be awarded the contract.

“Another factor which led to LCC becoming increasingly important was the move towards value engineering about 15 – 20 years ago. The drive to develop cheaper ways of manufacturing products resulted in pressure on the manufacturer to lower pump capital costs. Purchasers put very little pressure on contractors to take into account factors like reliability, energy consumption and blockages, which lead to selection of product on price alone. This resulted in many installations being expensive to operate and maintain, plus, huge issues with reliability and downtime.

What does LCC mean?

“LCC takes into account capital costs, electricity costs, maintenance (parts and labour) costs and overhaul costs over the life of the pump. In order for a business to apply LCC and look further than the capital cost of the product, it needs its departments to work together and adopt a holistic approach to LCC. For example, LCC will not work if the capital projects department cannot spend slightly more to enable the operations department to save much more on their maintenance and energy costs. It is also important for third party contractors to be contractually bound to use the LCC approach, in order that the system is followed in every aspect of the business.

“In order that LCC is at the heart of a specification, it is vital that a model to work out the LCC is adopted – enabling an easy and accurate decision. Factors included in an LCC model used previously include capital cost, energy cost and increase in energy cost due to wear, maintenance and repair costs, load factor, location of installation from maintenance base and access issues. The output from the model is presented in pie chart or graphical formats, to give a clear indication of the key cost contributors to the life of the pump.

“The LCC model reveals that it is not necessarily right to buy the least expensive pump, but by investing slightly more in the pump, it is possible to significantly reduce energy costs - a vital factor in the reduction of a company’s carbon footprint.

“There is currently no standard approach to procurement using LCC in the UK. Going forward the development of an appropriate LCC model is an essential requirement to the pump industry with the reliability of the pump e.g. blockages/ downtime factored into the calculation.

Reliability is a key requirement for a product with a long asset life. Adopting the LCC approach in procurement will ensure that a reliable product with minimal planned and reactive maintenance requirements will be purchased. This approach will reduce costs significantly.

Contact Information

ITT Water & Wastewater UK Ltd
Colwick,
Nottingham,
NG4 2AN

T: 0115 940 0111
F: 0115 940 0444

E: sales@flygt.co.uk
W: www.ittwww.co.uk




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