Payback time

Payback can be calculated in many ways. The main issue is what revenue/margin you can secure from the investment. You need to decide the period in which the equipment will depreciate, I would suggest 5 years max. Obviously devide the total cost by 5 then 12. Any finance charges?. Annual maintenance costs?. The savings are more for less. And the payback is costs minus the savings broken down annually over the depreciation period. You should see the payback well inside this period if not do not invest, look at sub contracting. If you want send me the specific numbers and I will knock up a spreadsheet for you and send it back so you can see what I mean.

I supply very reliable used equipment and that can help as your investment will be significantly lower, reducing any payback period.

Just let me know where I can help.

Regards and good luck! Malcolm.

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I always look at the support structure. This is where I feel the real Dollars and cents come into play. Sure you can calculate the derated value over months or years. But If your machine is in a "machine down" situation the derated value does not change, what changes is product out the door or quantity out the door. This is the key.... Product out the door. This is where the support structure is important. Things to consider:

Service- How is it structured? Is there 24 hour service? where is the closest service engineer? Is there a "spare parts" depot (this is important so parts do not have to be flown in from a foreign country thus passing a day in customs). Is there a maintenance or service contract (1 year, 2 year, 3 year...)?

Next is Applications- I am making a 5 year investment with a PNP machine how can this machine provider support me with changing technology(ies) over that 5 years? What new machine improvements are in the works? Can they help me with the over all process? New software upgrades? Who is managing the sale an applications engineer or the Sale Engineer?

Next is Training- Does any formal training get included with the sale? Is there pre installation training? How do they handle training of new operators or engineers? Is formal on site training offered?

I use the 2000 NEPCON PNP evaluation as a rule of thumb (one good thing that NEPCON Provided). Here are some of the items listed in the eval.:

Installation Support-quality of support, early availability of operations and maintenance manuals, the performance of the acceptance testing.

Personnel training & manuals: Availability of overview and training, quality of trainers and manuals, training techniques.

Problem Resolution: Technical service response, expertise of the technicians, availability of tech support and customer support, typical availability and delivery time for replacement spare parts.

Service and support: Use existing customer base to find out level of quality and the support personnel meeting their needs.

I can provide a more detailed list of questions if need be.

Hopefully this answers some of you needs.

Best regards, Cal Manncorp www.manncorp.com cdriscoll@manncorp.com

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Since yer talkin� $$$$, non-quantitative measure do not apply.

I understand someone told you to do payback. But, we don�t use payback for multiyear projects. Regardless, the analysis is similar. For each machine, set-up a multiyear spreadsheet like the one discussed in http://www.smtnet.com//forums/index.cfm?fuseaction=view_thread&CFApp=1&Thread_ID=3623&#Message14421&

Consider setting-up a quick sheet like this and then getting buy-off from your cost accountant before spending too much time on it, since everyone [especially bean counters] has different ideas on how something like this should look. Maybe if you act real pathetic, the beaner will do the sheet for you. Coo!!!

Your potential suppliers could easily have examples of spreadsheets for you to modify to suit your needs.

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We have developed a Cost of Ownership model that incorporates a number of factors when considering SMT equipment. There are the obvious ones like maintenance costs, labor costs and shift patterns. We also considere utilities, quality, set-up time and other lost opportunities associated with each type of equipment. Our independent consulting group offers this model to all manufacturers, not just to people who purchase our equipment. Feel free to contact me at montgomery@siemens.com for further information.

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