NEWS RELEASE                                                                                         March 2018

Lowest Total Cost of Ownership Validation (LTCOV) will be Essential for High Performance Combust, Flow and Treat Products and Services Success

The sea change in the market route for combust, flow and treat companies has been assessed at www.mcilvainecompany.com . One aspect is that IIoT and data analytics will be providing vast amounts of data on total cost of ownership. Current data will be available to the corporate specialists who increasingly will be making the major purchasing decisions.

These corporate specialists will have not only current TCO’s on each product but they will have the knowledge of their processes and the unique TCO parameters. These will not be people easily persuaded by a standard sales presentation or even a comprehensive analysis which does not take into account unique TCO parameters for the process in question.

TCO has long been a desired but expensive, time consuming and difficult basis for decision making. As a result initial price has had unwarranted influence on purchasing decisions for high performance products. More than half of the combust, flow and treat products are in the high-performance category. This includes both critical and severe service where performance has a bigger impact than initial price.

The most important navigation tool for this sea-change in the route to market will be the Lowest Total Cost of Ownership Validation (LTCOV). The obvious question is how does the LTCOV differ from the common “white paper”. Here are the differences

• The LTCOV addresses the unique process parameters for a specific purchase
• Validation is achieved by the input of Subject Matter Ultra Experts (SMUES)
• The unique process parameters and cost factors are supported by decision systems with case histories, analyses and economic tables.
• The LTCOV is kept current
• The LTCO is further validated by addressing criticisms of third parties including competitors
• This input from third parties is implemented through the decision systems.

The digital generation with access to data analytics and the Industrial Internet of Wisdom” will be leading the way in the market sea-change. The LTCOV will be a primary navigation tool. Therefore, those suppliers who have the best products and can validate LTCO will be the most successful. How can a supplier address this sea-change and provide the desired LTCOV’s? Here is the step by step recommendation.

1. Use “Advanced Forecasting” to prioritize industries, processes and even all the major individual prospects
2. Start with the most potentially lucrative segment and create an LTCOV for it.
3. The LTCOV process steps are
   1. Select a vendor to coordinate the LTCOV. McIlvaine would be one of the consulting companies to consider
   2. Understand the process as well as the process operator does.
   3. Gather all the cost data relevant to the application of your product or service relative to that process
   4. Support that data with case histories, customer testimony. and verifiable analyses
   5. Validate the LTCO with the input from one or more Subject Matter Ultra Experts
   6. Disseminate the LTCOV to the potential purchasers
   7. Provide open on line discussions of the LTCO
   8. Support decision systems covering the process and all the relevant products and services
   9. Provide continuous review and updating of the LTCO
   10. Encourage the development of subject matter ultra-experts both within the organization and without
   11. Interconnect all the people within the supplier organization to improve and leverage the LTCO market approach.

This sea-change will not only impact market shares but margins, R&D and the fundamental building blocks for success. Those companies who leverage TCO information to develop better products will find ready acceptance. The result will be faster process improvement and higher profit margins to those companies who divert more funds from promotion to R&D.

A five-step program to address the sea change is found at www.mcilvainecompany.com

For more information on a consulting program to coordinate the LTOV contact Bob Mcilvaine at This email address is being protected from spambots. You need JavaScript enabled to view it. 847 784 0012 ext. 112.