Why Calibration Cost is Not Driven by Equipment Price?
03 May 2021
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Hope you are doing well and keeping healthy at this point of time. We are still in the pandemic situation in Malaysia.
Here we are going to give you some insight of Why Calibration cost is not driven by Equipment Price? and Why is cost higher?
By given this information, you will gain understanding of why most of the calibrator’s lab in Malaysia quoting you a pinch in your company revenue.
Understand difference of equipment pricing and calibration service costs and the cost of not calibrating, will give you brief understanding.
Equipment Pricing is Determined by Manufacturing Costs
The Cost (Risk) of Not Calibrating
Here we are going to give you some insight of Why Calibration cost is not driven by Equipment Price? and Why is cost higher?
By given this information, you will gain understanding of why most of the calibrator’s lab in Malaysia quoting you a pinch in your company revenue.
Understand difference of equipment pricing and calibration service costs and the cost of not calibrating, will give you brief understanding.
Equipment Pricing is Determined by Manufacturing Costs
- Manufacturing an equipment, the cost can be varying for each item produce.
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The cost included as below:
- Engineering costs
- Materials for the product
- Cost of manual labor
- Quality control costs
- Product testing costs
- Marketing and sales costs
- Administrative overhead costs
- Cost of the machines
- Tools, and instruments needed in the manufacturing process
- The upkeep for maintenance on those assets.
- Above are all the costing of a manufacturing to produce and measurement equipment, that bring you thinking and wonder how some products can be sold at retail so reasonable in price to the user?
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Well, the answer is, as manufacturer to be remain in the market competitively, management of the company will manage the resource and supply chain and to controls to drive costs down in the processes as well as the cost benefits of volume to sell at lower profit margin in order to be competitive while still making a healthy bottom line.
- The largest cost for a calibration lab is the labor. Labor play the important role in calibration job. It requires skill and knowledgeable staff to calibrate equipment. Their training and skill upgrading is done regular to ensure they are performing the calibration tasks correctly.
- The second largest cost is Laboratory assets such as lab master equipment require calibrate and laboratory environment control need to maintain regularly according to National Standard requirement.
- And even though some calibrations can be batched to calibrate 5 or maybe even 10 similar items at once, it doesn't lend itself to the mass production for manufacturing of an instrument.
- The costing in calibration and costing in manufacturing is not the same, with the explanation above, the costing of calibration is higher than manufacturing an equipment.
The Cost (Risk) of Not Calibrating
- The purpose of calibration of equipment is to ensure your measurement of your product/service do not result in false acceptance (consumer risk) or false rejection (producer risk), which leads to cost and safety outcomes.
- Understanding that recalibration of your instrument lets you evaluate how the instrument was performing when you had made those quality decisions should signify the importance of recalibration
- You would be throwing away your measurement traceability, never knowing whether the instrument was outside of acceptance limits, leading you astray on product acceptance decisions all the while. Close that traceability loop by having your instruments calibrated. Otherwise, it may cost you more than you think you've saved!
- Neglecting calibration can lead to unscheduled production or machine downtime, product and process quality issues or even product recalls and rework.
- Furthermore, if the instrument is critical to a process or is located in a hazardous area, allowing that sensor to drift over time could potentially result in a risk to employee safety.
