Companies often miss budget and specification deadlines when procuring capital goods. Integrating procurement in planning and organization early on can make it possible to meet these goals, and also, to beat them.
On December 5, 1945, shortly after the end of the war, five fully-fueled US Air Force torpedo bombers set off from South Florida on a training flight. Not one of the aircraft returned to the Fort Lauderdale base. The subsequent search by air and sea was in vain. Flight 19 is now considered to be the beginning of the so-called Bermuda Triangle, and numerous myths surround other similar mysterious disappearances of ships and airplanes in the region.
Today, we sometimes get the impression that a new Bermuda Triangle has emerged in business. Generally, though, it is not ships or airplanes that disappear, but cash, capital and other assets. Notable examples are the Berlin-Brandenburg Airport, Stuttgart 21, and the Elbe Philharmonic Hall. It is not only major public projects that are affected by the phenomenon of such a remarkable waste of money, time and again, private business has problems with investment projects. This is because, in many companies, particularly mid-sized companies, CAPEX, as opposed to OPEX, is not professionally managed, to the considerable detriment of anticipated profit and operating results.
What is the difference between CAPEX, OPEX, and TOTEX?
CAPEX includes all capital expenditure within the company. In accounting terms, it is treated as fixed assets and is subject to tax depreciation allowances over a period of time. OPEX refers to business operating expenses. The term TOTEX represents the total expenditure of a business.
TOTEX = CAPEX + OPEX.