How a TCO analysis can cut costs
Updated October 4, 2023
By Gene Humes | VP of Lean Solutions
By Gene Humes | VP of Lean Solutions
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This is the key to understanding supply chain needs.
Spring cleaning. Love it or hate it, the idea behind it is solid. It’s a yearly opportunity to ask yourself, “Why do I still have unopened boxes from when I moved here?” Or “Just how long HAS it been since I dusted?” And “Wait, did I know the floors were this color before I cleaned them?” Now, what is a TCO Analysis? Well, it’s kind of like spring cleaning for your entire organization. A Total Cost of Ownership Analysis (TCOA) is a holistic and detailed approach to reviewing your business’ supply chain and quantifying any gaps that are found. It offers you ways to create value in your organization. In short, experts create a detailed examination of your business to accomplish three goals.
What you get Experts. Fastenal’s Lean Solutions team extends their time and expertise to you at no charge. The only cost involved is your time. We bring Lean Six Sigma Black Belts and internally trained Blue Belts. You bring employees with detailed understanding of the daily challenges they face receiving, disbursing, organizing, and reordering the items needed to support production. We've found that the average TCO Analysis leads to 10-20% in cost savings. 
What it takes
A typical TCOA event requires a 1-2 day time investment. In addition, we’ll ask for some pre-planning data collection and 20-40 minutes with selected department leaders to better understand in-depth business processes that contribute to supply chain inefficiency. What to expect In addition to the 10-20% savings you’re likely to realize as a result of the TCOA and proposed solutions, you’ll also leave the event with increased visibility of product flow and common sources of waste within your supply chain, both powerful contributors to overall productivity. Why Fastenal We understand your business is unique. The key to operational efficiency within your organization isn’t an off-the-shelf inventory management program. To achieve measurable results tied to your specific goals, you deserve a 360-degree approach. One that uncovers and drives out waste, reduces assets and non-value added expenditures, and ultimately improves productivity and increases revenue. 
Learn more about TCO!You may also like: Vertical Divider
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If this sounds enticing to you, email us at [email protected]. We'd love to help you "spring clean" your processes!
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