About the Association

SHAPA has been the UK's leading specialist Association for the solids handling and processing industry since its formation in 1981. Our support and assistance has allowed our members to maximise their profitability, whilst taking advantage of the many benefits afforded by the Association.

Total Cost of Ownership

Agenda to guide equipment specification discussions between SHAPA suppliers and customers

Introduction and objectives

Of the bulk material handling companies in the UK those who are members of SHAPA tend to be in the upper quartile in terms of the design and quality of their equipment. One outcome of this is that our members need to compete on the basis of quality rather than cost. The aim of this document is to provide a framework to enable a salesperson to qualify the whole lifetime value of equipment so that this can be compared against other suppliers rather than just being compared on the basis of the initial capital cost. To own and operate an item of bulk material handling equipment comprises:

The OPEX costs are often ignored but should not be as are normally much higher than the initial purchase price over the lifetime of the equipment. For example:
Assume a customer operates a process where the plant needs to run at full capacity to meet the demand of their customers. Assume that their process operates at a rate of 20 tonnes / day and a gross margin of £200 / tonne. Assume a new piece of process equipment is added at a capital cost of £50k, how would it’s reliability impact the total cost of ownership over just one year?


The following agenda should allow you to guide your discussion to demonstrate the added value of your offer to the customer:

1. Is the proposed technology the best option for the duty

As a supplier can you demonstrate your objectivity by explaining all the options that you offer within your product range and why the proposed technology is the best solution? Can you demonstrate that solution in a ‘test centre’ or offer references to them to give them a higher level of assurance?

2. Loss of quality

As a user of this proposed equipment what measures of Quality or Process is important to you

3. Does the design ‘match’ the material

As a supplier can you offer in-house material characterisation or work with a partner to characterize difficult materials to ensure that surface finishes, hopper / chute design and other equipment design options are designed to work well with the customer’s specific material?

4. Equipment reliability

What are your expectations to equipment reliability?

5. Spares & Service availability

What is the Companies Strategy for Disaster Recovery?

6. Running costs

As a user of the proposed equipment how does your company monitor your lifetime costs for both capital and revenue items

total cost of ownership infographic