How much does a $1.00 battery cost? That may seem to be self-answering, along the lines of, “Who is in Grant’s Tomb?” or, “When was the War of 1812?” However, a single $1.00 battery may actually cost you hundreds or thousands of dollars when you consider all of the costs associated with its failure. Given the proliferation of batteries in the Internet of Things (IoT), it is especially important to understand the costs involved.
Before the Battery Fails
Before the battery fails, you have the transaction costs associated with ordering, receiving, accounting for, and stocking the battery. If you fail to stock replacement batteries, you may need to have an employee make a special trip to purchase the battery or to pay for a delivery service, either one of which might easily cost you many times the price of the battery.
For some applications, such as implanted medical devices or remote security devices, you need to consider the cost of actively monitoring the remaining battery level. These sorts of runtime-critical applications may also require you to test and verify the replacement battery’s capacity and charge level.
When the Battery Fails
The minute the battery fails, additional costs accrue due to the loss of device functionality. Perhaps a dead battery is just a minor inconvenience, such as loss of remote control for a projector, but perhaps a dead battery delays a production process or customer engagement. In the extreme, a dead battery could endanger lives, as in military, outdoor adventure, or medical applications.
Once you have identified the need to replace the battery, there are costs associated with the person who replaces the battery. Depending on the application, the replacement may be performed by an entry-level employee, a skilled technician, or even a cardiologist or thoracic surgeon.
In addition to the employee costs, there may be disruption costs associated with the replacement process. For example, consider a telemetry device that transmits patient data to a nursing station. A battery change disrupts other activities of the nurse aide, and the patient often wakes up when the nurse aide changes the telemetry device battery. If the battery is inside the patient, as in an implantable defibrillator, the total cost of the surgery, anesthesia, hospital stay, and follow-up care can cost $50,000.
A battery replacement procedure may also include transportation costs when special equipment is required. A consumer may be able to replace a battery on an inexpensive watch, but a high-end or waterproof watch may require special disassembly or resealing equipment.
Finally, there are opportunity costs associated with battery replacement. Every minute and every dollar devoted to battery replacement is a resource that cannot be devoted to other activities.
After the Battery Replacement
Once the battery has been replaced, there are additional costs to be considered. There is the waste management cost borne by the company, and in some cases there is an additional environmental cost borne by the larger community. If the battery is rechargeable, there are costs associated with the equipment, power, and people involved in the recharging process.
A short battery runtime may negatively affect the user’s view of the product, and if two similar devices have similar features, battery life may be the deciding factor in customers’ purchase decisions. In the extreme, there may even be product recall costs or legal liability associated with failed batteries, especially in the medical field.
In summary, a $1 battery can end up costing users far more than the basic purchase price. There are costs before, during, and after replacement, and in extreme situations, battery runtime can even be a life safety issue. Design engineers who focus on improving the battery runtime of their devices can substantially improve their customers’ bottom lines, and in so doing they may generate improved sales and customer loyalty.