This month, growing concerns over the instability of global commodity prices and the rising cost of aluminium is driving raw material cost increases at some of the world’s leading cylinder manufacturers.
The result for many customers is an inevitable price rise.
Thankfully, at AMS Composite Cylinders, we will not need to have difficult conversations with our customers about price in the near future – our prices are staying the same.
In this post, Operations Director James Cooper takes a closer look at lifecycle cylinder manufacturing costs, and explains what our teams are doing to control costs throughout the process for the benefit of our customers.
Purchasing factors – the importance of cost
In the gas industry – patient and user safety is the single most important factor when it comes to product design.
However, in such a highly regulated industry, all supplier products are manufactured to tight tolerances and extremely high standards – for any approved product, the health and safety factor should be a ‘given’.
With that in mind, it’s product performance, and cost, and more specifically, lifetime product value that are the key purchasing drivers. These are weighed against each other as the deciding factors in the business decision on where to buy from.
Counting the cost
When looking at the costs of a cylinder, these can be broken down into the following categories:
- Raw materials
- Manufacturing
- Lead times and order processing
- Testing and regulation
- Quality and complaints arising out of any defects
- Disposal
AMS Composite Cylinders is focused on controlling costs throughout our operations. This includes optimising manufacturing processes and systems, right through to developing cost-effective mechanisms for the responsible disposal of cylinders at the end of their working life (there is an exciting announcement on this front coming very soon).
Controlling the costs – raw materials
Effective cost reduction starts with the raw materials, and the AMS Composite Cylinders procurement team keeps a tight control on all our raw material costs.
Our best in class procurement team works tirelessly to improve the supply chain, looking at all aspects of raw material sourcing and supply process to mitigate risks and minimise cost in a sustainable manner for the benefit of our customers.
This includes:
- Selecting a range of raw material suppliers
- Monitoring raw material drivers
- Monitoring the geopolitical landscape
- Seasonal variation
- Cost improvement programme
Purchasing key components and signing contracts with suppliers at the right time gives us a robust, sustainable supply of all our key raw materials, enabling us to react to customer requirements and ride out periods of volatility or scarcity in commodity markets.
Maintaining the price of AMS Composite Cylinders
These robust raw material purchasing processes are delivering real dividends now – resulting in lower prices and predictable, consistent costs and product delivery for our customers.
Unlike many of our competitors, we will not be raising our prices this month.
Our fully wrapped carbon composite cylinders are the lightest in class, offering fantastic performance with a non-limited life. They’re also available at competitive prices, providing unrivalled product lifecycle costs.
Lightweight Carbon Composite Cylinders from AMS
AMS Composite Cylinders is the exclusive continental European and UK distributor for an advanced range of lightweight gas cylinders from Advanced Material Systems (AMS).
Products include carbon composite cylinders for a wide variety of breathing air and oxygen therapy applications, including healthcare, respiratory, SCBA (Self-Contained Breathing Apparatus), laboratory, emergency and environmental uses.
Our light composite gas cylinders offer high pressure (300 Bar), NLL (Non-Limited Life) performance, and are accredited for use worldwide – holding a wide range of quality assurance accreditations, including: ISO 11119-2, UN-TPED Pi, DOT (USA) and TC (Canada).
Additional information about AMS Composite Cylinders and our products can be found at www.ams-composites.com.
This article was written by James Cooper. Director of AMS Composite Cylinders Ltd.