Last year we wrote an article about different things you should consider when choosing Cable warehouse mobility options. The article discussed durability, reliability, ease of use and the various technology platforms. Now, a recent study by the VDC Research group provides greater detail why understanding mobile device TCO is critical to maintenance operations as well as achieving the ROI for your investment in an warehouse management system.
A New Look at TCO for Mobile Handheld Device
Cable MSO warehouse managers know consumer grade mobile devices such as smart phones, PDAs etc. cost less than commercial/enterprise grade mobile devices. However, the purchase price is not the only factor that should be considered because the Total Cost of Ownership ( TCO) averages 42.6% more for consumer grade mobile devices.
“Replacement costs only tell a small part of the TCO story because the purchase price of a device accounts for less than 30 percent of its total cost of ownership. Lost productivity when devices fail costs businesses more than the price to repair or replace them.”
To understand why the TCO is so much higher for consumer grade mobile devices you first need to understand the components of TCO. TCO for mobile devices is composed of hard costs and soft costs. Hard costs generally include the purchase price and cost of maintenance contracts. Soft costs include support time, lost productivity and device maintenance.
The VDC Survey reports that the when added together consumer grade devices have a TCO of $3,895 versus commercial rugged devices which average $ 2,730. The reason for the variance can be attributed to the failure rate of non-rugged consumer grade devices which fail on average 3.5 as many times as their rugged counterparts.
The Cable MSO Warehouse Ruggedness Difference
Ruggedness/durability represents the ability of mobile devices to withstand shock, water, dust and use damage. True rugged and durability ratings can be found on commercial devices that describe their Ingress Protection (IP) rating. IP ratings are used to define certain levels of ruggedness and durability. For example, no cable warehouse or hub and spoke distribution center should be using a mobile device rated less than IP54. In another example, Mintek just set up a client in a Port that required an IPrating of 67 for their handheld devices.
Every time a device fails it is taken out of service to receive a software update or is replaced is lost productivity. According to the survey, on average, mobile workers lose 75 minutes each time there is an issue with their mobile device. For example, serialized reconciliations are by nature labor intensive even with a bar code scanner. If a consumer grade mobile device fails, the serialized reconciliation may be delayed affecting the normal movement of CPE in and out of the warehouse.
“Device failure remains a critical issue for mobile computers with annual failure rates often exceeding 30 percent….Lost productivity is responsible for nearly half of the total cost of ownership for mobile devices, and a variety of other factors account for the other half.”
Cable Warehouse Management Software and Support
The second highest soft cost for mobile handheld devices is the costs of software and support. As described in our prior post, consumer grade mobile devices don’t last long if used in commercial applications. In addition, smart phones and PDAs etc. are often discontinued which can leave organizations trying to manage, update and support various brands and operating systems.
Additional Cable MSO TCO factors
TCO factors may vary by industry such as manufacturing, cable or retail as each industry has different applications. However, in general other TCO factors include but are not limited to:
- Lost revenue: Dissatisfied customers waiting for CPE, price and services checks may go away should the mobile devices fail.
- Ease of use: Commercial mobile devices are usually optimized for screen input, bar code scanning and navigating enterprise applications.
- Power management: Cell phone batteries last only a fraction as long as commercial grade handheld devices.
- IT support: Commercial grade handheld devices are designed interface with cable warehouse automation systems, requiring less IT support, can be accessed remotely and can be set to prevent unauthorized uses (data and non-business use).
In summary, failure to pay attention to TCO for mobile handheld devices may cost an organization 2-3 times more per device than they planned. Just like the concept of preventive maintenance, you can pay a little more now or a lot more later. Most importantly, the use of poorly constructed mobile devices work against the labor cost savings that a cable warehouse management system will bring.