TCO Calculator - Background and Supplemental Data (DRAFT)

Introduction:

It can be difficult to weigh the cost of buying products we use everyday. Things cost money, but there can often be other costs associated with the use of products over time. Maintenance, tools, and consumable items cost money as well, not to mention the time, energy, and impact we have on our environment while taking care of what we own.

The cost of owning certain products grows over time. The difference of cost between products can be large, or almost nothing at first, but when you buy a lot of something, or invest in a product designed to be with you for years and years, the dollars add up. This “true cost” of a product can be estimated through what is called a Total Cost of Ownership analysis (TCO).

With our built environment, the world we create around ourselves, builders, contractors, buyers, and procurement agents often have the choice to invest in a wide variety of one kind of product. There is a lot to consider when thinking about what goes into the design and creation of places where people live, work, and play. Budgeting and the cost of certain products are always important. When looking at the price tag of a certain product, the actual cost of an item per square foot is only the beginning.

In this project, we sought to explore resilient flooring and its projected cost over time by designing a TCO calculator that uses customer input along with estimated values of maintenance procedures to give buyers a sense of what cost, and what value lives beyond the price tag of one product or another.

The calculator:

In the TCO Calculator, there are windows and boxes that allow for user input as dollar costs in numbers. These costs are single events and unit cost, “price tag” information that a buyer may have more readily available. We also include tick boxes that represent composite measures, estimates we put together that average time, labor cost statistics, and consumable item costs into an estimate. Here are the descriptions of each TCO input field in detail:

Inputs:

• Product Cost: The price of the product per square foot in US Dollars.

• Install Cost: The labor and material cost of product installation. Usually a contractor quote amount. This is a total amount for the project.

• Maintenance Equipment / Machinery Cost: The price of specialized equipment needed to maintain the flooring product during its lifespan, like mechanical buffing and polishing tools. This is a total cost amount for the lifespan of the product. The input should be a dollar amount, and users may include other added costs to this field if they choose. This amount should not include consumable products, like buffing pads or cleaners associated with floor maintenance over time.

• Disposal Cost: Unless the project is a new building, disposal cost is often included in an installation quote from contractors. If there are added costs to disposal that the customer is aware of, disposal cost is an optional field that can be included in the user’s TCO calculation.

• Maintenance Cost: These are checkboxes that estimate an average cost of labor and product consumables per square foot, per year, based upon the procedure listed. Please note these estimates treat flooring as a crude surface area, ignoring differences between high and low traffic. Time and labor cost for each procedure are standardized estimates, taken from ISSA and U.S Bureau of Labor Statistics. Estimates are in US Dollars, circa 2020. The frequency of procedure may vary as well, as our estimates of weekly, monthly, and annually are drawn from academic literature, along with consultations with industry professionals.

• Square feet of product : There is an input box to the left of the product information fields that allows you to input the size, in square feet, of your project.

• Product Lifespan : This is a slider input, dragging from left to right reflects the lifespan of your resilient flooring product in years, as well as maintenance costs of the product

Outputs:

• Cost Comparison : To the left, there are two boxes that reflect a dynamic dollar amount, use these to compare the TCO of two products you want to explore.

• Bar Chart : At the very bottom there is a bar chart that lets you compare the TCO of two products visually as well.

What we did:

Before putting together our shiny app, we conducted a literature review to see where others explored the impact of different kinds resilient flooring products over time. Once we has a look at the initial data from our review, we consulted with industry experts in public and private sectors to cross-validate and get a sense of how close what we learned from academic reports came to product and industry experts.

For our calculations, we aimed to measure the cost of maintenance procedures as anything more than sweeping and mopping, since that general cleaning process is a given, universal sort of procedure to all flooring, regardless of style or type of product.

What needs work:

The hope is always to get an estimate that is as close to reality as possible. That being said, one size almost never fits for all, and we caution buyers and industry to take this TCO calculator at face value, adjusting input on their end if possible while considering a few of the limitations we encountered while we were putting it together:

• The calculator accounts only for estimates of internal cost to the purchaser, costs related to supply chain and environmental impact exist, but were not included. We chose to focus on direct cost to the customer, project manager, and/or owners of these products rather than larger costs to the ecosystem, safety, and health of a built environment.

• Labor cost varies in the United States. To keep things as simple as possible, we used a single average value taken from the U.S. Bureau of Labor Statistics.

• Cost of consumables vary. Use may vary significantly based on frequency of use.

• We treated all floor space as equal. Certain areas of a building may get more traffic than others, and thereby get more attention from a maintenance department. If your project is a busy hallway or entrance, the overall TCO you will get from this calculator may an understimate. The tool does work well if you are comparing the relationship between two products “apples to apples” in a cost estimate, regardless of traffic volume.

What this means:

Safer and more environmentally friendly products we incorporate into our built environment are becoming more available to us each day. As customers and procurement professionals, we seek to shift the culture of our built environment towards healthier alternatives. When doing so, it is important for us to explore, analyze, and illustrate a true cost of one product versus another. Cost represents commitment, a relationship the customer has with a product over time. Articulating TCO analyses are key to understanding latent costs, and indeed values, that exist with products beyond an upfront price tag.

Data Sources:

Aure, A., Estevan, H. Schaefer, B. “Life Cycle Costing State of the art report”, ICLEI – Local Governments for Sustainability, European Secretariat, March 2018

Degraeve, Z., Roodhoof, F. “The Use of Total Cost of Ownership for Strategic Procnrement: A Company-wide Management Information System”, Journal of the Operational Research Society, August 2005

Languell, J. Moussatche, H.. “Flooring material - lifecycle costing for educational facilities”, Facilities, Volume 19, Number 10,, pp. 333-343 MCB University Press, 2001

Westminster Sustainable Business Forum, “Costing the Future: Securing Value for Money through Sustainable Procurement”, June 2008

• Data table of ISSA standardization.

• Website:

Cleanfreak.com, “Flooring Pad Life Expectancy Estimates”, web source: https://www.cleanfreak.com/docs/charts/pad-life-expectancy.html#strip