Total Cost of Ownership can be an overwhelming topic. In many cases, it is extremely challenging to calculate.

Now, you can start trying to understand Total Cost of Ownership for the first time when you are in a complex situation in your work. But I think it helps to take a basic example and learn from it first. You can always build your knowledge from there, applying what you already know to a more challenging purchase.

We recently did some printer purchasing here at Next Level Purchasing headquarters. Total Cost of Ownership was at the forefront of our decision-making. Check out this article on Total Cost of Ownership as it relates to printers. It’s basic stuff, but the principles can be expanded upon for higher-level procurements.

One aspect of Total Cost of Ownership that we considered that the article didn’t cover was the cost of labor. Changing printer cartridges, dealing with printer performance problems, and waiting for documents to print all require someone’s time. That time is a resource that is being paid for, so minimizing wasted time further reduces Total Cost of Ownership.

I hope that you find this helpful.

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Recommended Reading             

• 14 Procurement Best Practices
• A Reflection on Total Cost of Ownership
• Finance for Strategic Procurement (Advanced)
• Finance for Strategic Procurement (Fundamentals)
• Mastering Procurement Tactics
• Procurement Best Practice Execution
• Savings Strategy Development

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