Total Benefit of Ownership: Lowest Price ≠ Lowest Cost
SKF
“Getting a reduction in price is an immediate gain, while buying on total cost is a long-term proposition. Besides, the savings suppliers claim from total cost buying are all smoke and mirrors.”
Buying on the total benefit of ownership boosts profitability by bringing sustainable savings.
When more rigorous measurements are applied, the true potential of buying on total cost becomes clear.