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The Impact of Service on Total Cost of Ownership

"Total cost of ownership" represents one of the foodservice equipment industry's most ubiquitous and misunderstood terms.

Purchase price represents but one element in calculating this important metric. For a piece of equipment to truly live up to its efficiency promise, regular and well-thought-out maintenance becomes necessary. To help shed some light on the role of service and maintenance when it comes to total cost of ownership, FE&S caught up with Paul Toukatly of Duffy's Equipment Service, a Sauquoit, N.Y.-based service agent. Toukatly also serves as president of the Commercial Food Equipment Service Association.

FE&S: The concept of total cost of ownership is one everyone is familiar with but it can mean different things to different people. Please explain what total cost of ownership means to you.
PT: It means did a foodservice operator purchase a piece of equipment that will hold up or did you buy based solely on price and end up with something that might not be able to do the job? In other words, will the equipment stand up to the demands of your specific operating environment? And is that piece of foodservice equipment efficient enough to lower the operation's utility bills, thus generating a positive return on investment?

FE&S: What role does proper installation play when it comes to total cost of ownership?
PT: Proper installation is key because it helps ensure the equipment has access to the utilities and other resources, like proper airflow, it needs to operate efficiently. For example, if you install a piece of gas equipment and don't have enough gas to support it, you will eventually call a service agent because you think the item is not functioning. But that's not the case. It's not working properly because you don't have enough gas coming to the building. That is not covered under the warranty. Proper installation can also help you make sure there is enough room around the equipment to make it easier for the service tech to access the panels properly.
For example, one of our service techs was working on a combi oven that was pretty snug on a cookline. As a result, he had to disconnect the unit and move it with a pallet jack in order to perform standard maintenance. That's not efficient for anyone. Foodservice operators can avoid these challenges by having a service agent come in to discuss their plans. It costs a little money but it can save operators more down the road.

FE&S: Why does regular or planned maintenance help manage total cost of ownership? And what's the difference between planned and preventative maintenance?
PT: Each piece of equipment has some ongoing service needs. You may own a Mercedes, a great and reliable vehicle, but if you don't take care of it the car will break down. Ironically, it's often the same people who regularly get the oil changed on their car who don't realize their foodservice equipment that runs 16 hours a day needs some maintenance. Kitchens always put equipment under duress because these are hot spaces where grease, flour and other items impact the air.

FE&S: Today's foodservice equipment is higher tech than previous generations. How does that impact the need for maintenance and total cost of ownership?
PT: The more high tech the equipment the more likely it will require maintenance. It's important to note that regular maintenance can lessen the likelihood of down time when operators need to serve customers. When things become an emergency, it becomes more expensive — pulling techs off a job or overnighting parts drives up the cost. So when you manage maintenance, you manage costs.

FE&S: Lots of people like to talk about preventative maintenance. But much like unicorns, it seems that preventative maintenance is little more than a myth.
PT: Preventative maintenance does not exist. Planned maintenance, however, has many benefits that can help foodservice operators achieve the desired return on their equipment investment. For example, with planned maintenance you are going to do what the manufacturer recommends for the item over a period of time and you also look at other pieces of equipment that could be wearing out over time. Being proactive in such a way can help limit the Friday night emergencies. It does not stop you from replacing parts but you get to do it on your time frame. It helps manage costs and limit lost revenues. And if foodservice operators have a service agent they can trust, you know they are trying to help you. You need to establish that relationship. They are trying to keep the operator in business.

FE&S: It's important to point out that maintenance helps achieve energy efficiency.
PT: Yes. But realize that even if you have good water, you will get deposits with equipment such as a steamer or combi oven. And when that happens the efficiency goes down. If you have gas equipment, you lose the efficiency once the air shutters get clogged. For ventilation, if the flu gets clogged, that could cause problems. So you need to clean the fans, door gaskets and so forth. There's probably more planned maintenance for refrigeration equipment than on the hot side but both are equally important. You need to maintain the equipment to make sure it uses the utilities efficiently.