Dividella’s focus on TCO, TCP

Parenteral packaging specialist Dividella has long understood that Total Cost of Ownership (TCO) and Total Cost of Package (TCP) provide the most objective and quantifiable measures of the actual efficiency of packaging solutions. This is why Dividella measures almost every aspect of design and engineering against those two benchmarks; using 100% monomaterial packaging.

In this article we examine the components of TCO and TCP and how Dividella solutions optimize returns on those variables, as well as sustainability.

Total Cost of Ownership (TCO)

Total Cost of Ownership (TCO), also called life cycle cost analysis, quantifies all the lifetime costs associated with adoption of a particular solution. Thus purchase cost is only one part of an equation that also includes the costs of adoption, installation, maintenance, materials, operation, energy consumption, upgrading and future proofing. Together, these variables are known as total life cycle costs.

It follows, therefore, that the longer the period of ownership, the less significant is purchase price in that total equation.

The TCO concept first arose in the late 1980s in the IT industry as a way of calculating the true cost of different systems, where the costs of software, user training, hardware upgrades and downtime could easily overshadow the price of the core platform.

Since then, TCO analysis has expanded to cover a wide range of industries from aerospace and buildings to medical and laboratory equipment. Whatever the industry or application, TCO is determined by the following core calculations:

Life cycle: Determining the full ownership life cycle of the acquisition, which can be defined as:

• Depreciable life: the number of years the asset will be on the company’s books)
• Economic life: The number of years for which the asset returns positive value to owners
• Service life: The number of years the asset is actually in service

Obvious costs: The ‘up front’ hard costs of purchase and essential maintenance as well as feed material requirements.

Hidden costs: the softer ongoing costs of ownership that may include:

• Total acquisition costs: that will include costs due to identifying, selecting, ordering, receiving and inventorying
• Upkeep: the costs of upgrading, enhancement and refurbishment
• Reconfiguration: costs associated with adapting system for different applications
• Set up and Deployment costs: including space requirements, transport, installation, set up, and integrating into current line
• Operation: costs of human operation and energy consumption
• Change management: user orientation and training with costs of workflow or process change
• Infrastructure: costs of supporting heating, lighting, cooling, or IT integration
• Environmental impact: waste disposal, clean up, and pollution control plus end of life disposal
• Insurance and security: these include costs of making the system tamper proof or robust against risk of cyber-breach

Basic TCO calculation can take the form of a matrix in which obvious and hidden costs are applied to every aspect of the solution. For a packaging system, the matrix might look like this:

Total Cost of Package (TCP)

Calculating total cost of each package requires understanding of all the factors required to deliver finished package into the hands of the end user. This means that the obvious costs of the package materials and the packaging process form just part of a much wider calculation that takes in ‘hidden costs’ such as:

• Handling and administration
• User friendliness
• Patient information and user literature
• Warehousing and inventory control
• Track and trace requirements
• GDP and other regulatory compliance
• Cool chain logistic infrastructure
• Engineering services
• Transport and delivery
• Waste

Seen as part of this bigger picture, the actual product element may account for as little as 15% of the total cost of each package. This is particularly true for the pharmaceuticals and biopharma industries, where consignments tend to be high value, temperature sensitive or perishable and where the penalties of any failures in the overall logistics chain can be particularly high in damage to sales and reputation.

Again, these can be mapped on a matrix:

Dividella TCO and TCP optimization

Dividella has built up an impressive reputation across the global pharmaceutical industry for the quality and effectiveness of its NeoTOP TopLoad cartoning machines. This success has been established on a holistic approach that recognizes that machine and pack design go hand in hand.

Dividella’s single-minded focus on packaging pharmaceutical products allows it to address the deeper and more complex needs of the industry, particularly in the parenteral packaging of highly sensitive products like syringes, flasks, vials and auto-injectors that demand thoroughly developed solutions.

The Dividella TopLoading/ TopOpening concept recognizes that the best way to pack parenterals is to load medicine packs into the carton from above, which subjects the packs to less stress and also means that they can then be accessed more easily by the consumer from the top of the carton.

The TopLoading concept also recognizes that pack design, construction and appearance form significant added values for manufacturers, meaning that each pack deserves to be treated as a unique entity supported by optimized handling and a complete packaging design.

Therefore Dividella’s packaging designers are accustomed to working in close co-operation with the customer’s marketing departments to determine detailed specifications for individual packs and carton loading.

Dividella is thus able to address TCO and TCP concerns at multiple levels:

• The high quality engineering of cartoners
• The flexibility and integration of modular design concepts
• Innovative package design expertise
• Extended machine capabilities allowing for wider choice of materials and formats
• User friendliness in operation

In each of these aspects, Dividella is able to deliver specific customer benefits that feed through into reduced TCO and TCP.

Features and benefits

High quality engineering
Dividella NeoTOP cartoners are Swiss made and engineered for utmost reliability and very long service/economic lives. Many Dividella cartoners are still giving trouble-free service after 25 years or more. Extending service life and reducing upkeep costs are key components of reducing overall TCO as well as reducing overall consumption waste.

Modular design integration
The modular design of NeoTOP solutions makes them easier to integrate into existing production lines and more adaptable to configuration changes in process. This reduces TCO by lowering the costs of upgrade and modernization, making the system inherently more future-proof. It also makes the system more adaptable to new packaging techniques, market demands and materials.

Innovative package design
Dividella’s extensive experience in designing and executing new packaging concepts allows it to deliver package formats that use space more efficiently, reduce footprint, volume and weight, lessen or eliminate the need for patient information inserts, provide enhanced tamper proofing and physical protection to sensitive contents and use more economical and/or environmentally friendly materials. All of these reduce TCP and in some aspects also translate into lower TCO.

Extended machine capabilities
The advanced design of NeoTOP machines provides users with a wider choice of packaging formats and materials, with quick and easy format changes, support for unique Track and Trace package labeling and Wash in Place or Clean in Place (WIP/CIP) capabilities. All of these translate to lower TCO/TCP.

User friendliness
In both hardware and software engineering, Dividella NeoTOP solutions are designed to be autonomous and easy to use with low demands on operator inputs, supervision and servicing – all key aspects of TCO. This concern for the customer also extends through to package design with a high degree of tamper protection combined with easy opening and access to product. This allows Dividella-designed and manufactured packaging to be more market acceptable and regulatory compliant – key ‘hidden costs’ in total cost of package.

Resources

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