“There's no question that manufacturers and their suppliers need to demonstrate the value of their investments, but few have been effective at truly defining and quantifying the value equation,” said Paul Wenner, regional manager, OEM Business Solutions, Rockwell Automation. “A Total Value Assessment method takes each aspect of a purchase decision – cost, utility and importance – and helps suppliers and purchasers understand if their automation investment was a good business decision.”
The white paper, titled “A Strategic Perspective on Value: Using a Total Value Assessment to More Accurately Quantify Long-Term Business Benefits,” outlines the definition of “value” in manufacturing. The paper also provides examples of the tangible results achieved by manufacturers who have shifted from price-focused buying to implementing value-focused decisions. For example, the average reduction in engineering turnaround time for manufacturers who apply the TVA method in their purchasing decisions is approximately 18 percent. In the case of one manufacturer, an 18 percent reduction meant an increase in value, or revenues earned, of $250,000.
The white paper also questions the validity of ROI calculations and other traditional methods of measuring the value of capital investments. “Traditional measurement methods such as ROI are too narrowly focused on short-term payoffs of technology investments,” said Wenner. “Companies need a more comprehensive analysis of long-term results and the impact their investments will have on their bottom lines across all levels of the business. That is precisely what the TVA method aims to offer.”
For a copy of the white paper, visit .
Rockwell Automation Inc. (NYSE: ROK) is a leading global provider of industrial automation power, control and information solutions that help manufacturers achieve a competitive advantage in their businesses. The company brings together leading global brands in industrial automation that include Allen-Bradley controls and services, and Rockwell Software factory management software. Headquartered in Milwaukee, Wis., the company employs about 20,000 people serving customers in more than 80 countries.
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