// ROBOTICS AND SMART FACTORIES TERM
Total Cost of Ownership
The full cost of an asset or system over its entire lifecycle, including purchase price, operating costs, and disposal costs.
TECHNICAL DEFINITION
TCO is a financial estimate that calculates the direct and indirect costs associated with acquiring, operating, maintaining, and disposing of a product, system, or asset throughout its entire lifecycle, providing a comprehensive view beyond the initial purchase price for strategic procurement decisions.
BACKGROUND
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the secondary sector of the economy. The term may refer to a range of human activity, from handicraft to high-tech, but it is most commonly applied to industrial design, in which raw materials from the primary sector are transformed into finished goods on a large scale. Such goods may be sold to other manufacturers for the production of other more complex products, or distributed via the tertiary sector to end users and consumers.
READ MORE ON WIKIPEDIASYNONYMS & ALIASES
- Lifecycle Cost
- Whole-Life Cost
- Full Cost
USAGE NOTE
Procurement decisions based on TCO often lead to more cost-effective long-term solutions.
DEVELOPERS
Organizations developing technology related to Total Cost of Ownership.
Develops Enterprise Resource Planning (ERP) software like SAP S/4HANA, which integrates asset management, maintenance, supply chain, and financial data. This allows manufacturers to track and analyze all costs associated with an asset's lifecycle, from acquisition to disposal, to calculate a comprehensive TCO.
Offers a suite of software including Teamcenter (PLM) and MindSphere (IIoT). By creating a 'digital twin' of an asset, they enable manufacturers to simulate performance, predict maintenance needs, and track operational costs throughout the product lifecycle, providing precise TCO data.
Provides the Maximo Application Suite, an Enterprise Asset Management (EAM) platform that uses AI and IoT data for predictive maintenance. By forecasting asset failure and optimizing maintenance schedules, it directly helps companies reduce downtime and repair costs, which are major components of TCO.
Develops the ThingWorx Industrial IoT platform. It enables manufacturers to connect to machinery, collect real-time operational data, and analyze performance. This data is used to reduce unplanned downtime and optimize energy consumption, thereby lowering the overall cost of ownership.
Offers the 3DEXPERIENCE platform, which allows for the creation of virtual twins of products and factories. This enables the simulation of long-term operational scenarios, including energy consumption, wear and tear, and maintenance needs, allowing for TCO optimization during the design phase.
Specializes in Asset Performance Management (APM) software. Their solutions use data analytics and AI to monitor industrial assets, improve reliability, and optimize maintenance strategies. This focus on performance and risk reduction is key to managing and minimizing TCO.
Provides Infor EAM (Enterprise Asset Management), a system designed to help organizations track asset performance, manage work orders, and control MRO (Maintenance, Repair, and Operations) inventory. This provides the foundational data needed to calculate and manage TCO effectively.
Develops engineering simulation software that can predict product reliability and durability. By simulating an asset's lifecycle under various conditions during the design stage, manufacturers can make informed decisions to reduce future maintenance costs and improve the product's TCO.