T&M buying process made rational and justified Economically!

The economic justification for buying the testers (T&M equipment)involves several steps.Usually the idea is that the test time reduction will lead to increase in productivity,quality and profitability.Alongside good rational T&M purchase should accompany the cost reduction in manufacturing and maintenance of the system.For a manufacturing organisation,the Manufacturing yield,test coverage and yield effectiveness are to be accounted for.

While the costs are computed,onetime costs,ongoing costs and recurring costs are segregated.Tester Prices,Labour,Depreciation and Maintenance/Programming are the main heads covering all the three types.We have to add the three costs type together,we plug these numbers in our Criterian pre-decided and do the Economic Analysis.

Now comes the crucial point,where the Test Cost Per unit (or system under test:in manufacturing,or Project Environment)is computed for various Test vendors.The criterion can be based on the Payback Period,Net Present Value,or Rate of Return.Usually the Payback Period criterion is simple to apply.In Payback period method Depreciation and Taxes are not accounted.We can apply the other two methods,if the customer is corporate entity and avails the tax advantage due to deprecation:rapid,or straight line reduction.

The goal of this simple exercise is to apply the customers test strategy,or test system decision.The understanding of the T&M vendors have to be good,as far as the customer objectives go.The Test vendor can offer the better T&M Economic Solution if the understanding of the clients future is finer!It is T&M vendors ability to understand his Clients Business that should matter overall.

If anyone is interested in discussing any T&M Buying deal,or Proposal,he/she could contact the writer.+919810101238

November 1, resetting zero, T&M trends all rolled into one!

Since 1976 every year today’s date had been bringing a unique feeling within me. Our companies new fiscal year began this date and we almost always had a hangover of previous night’s hard work of getting our orders booked into the Enterprise System! Since we were always compensated by our over target performance, and the fact as Sales Manager, the compensation depended on all the areas performing, the anxiety and hope was double.

This thing all the way continued till I declared my independence on 15 Aug of 2001, as we had already beaten target figures lot ahead of Oct 31, and I thought the time to move to another T&M company was right. In the new company also the similar field operations were to be managed, but the fiscal was to start July 1.The job was lot more challenging as it was a challenge of starting up and turning around some pieces of business. T&M industry was still integrated part of my life, and its tribulations, trends and nuisances were part of the psyche!

November 1 was also important to me for another reason. Forty years back in Bangalore I started in BEL as a R&D engineer this day! The occasion was superb and doubly joyous as the day started with a holiday - the occasion being Kannada Rajyotsava day. This date, the state of Karnataka was formed a few years back. Lovely feelings and color all the way.

All that may have changed a little, now that the corporate life is gone. But the recall of November 1 is still with excitement. I fondly remember and wonder how my colleagues of yesteryears are doing and enjoying this day as many of them still start the new year, and their counters get reset zero/zero for starting afresh.