When people consider how to handle the upkeep of their industrial equipment, the decisions generally fall into three categories — repairing, replacing, and retrofitting manufacturing equipment. However, no single option is always the best choice for every circumstance. People must consider various factors to reach the ideal course of action.
Here are five factors to consider when figuring out what the best equipment upgrade strategy is for you.
1. Determine What You Can Afford
Repairs and retrofits are significantly cheaper than replacing equipment. Start by figuring out whether you have the financial resources to cover a replacement. If you do not, a replacement still is not necessarily out of the question.
For example, the Small Business Administration in the United States helps small manufacturers get more than $5 billion in capital through various grants and other programs. You may consider replacing a particular machine as part of a larger plan to operate more sustainably or making another major change. In that case, applying for a grant may make the most sense.
Affordability also comes into play as you consider how much profit you will likely lose by having the machine out of commission. If you have local repair personnel and spare parts, repairing could be the fastest option for getting the equipment operational again.
2. Review the Company’s Goals
Another thing to think about is how your machine-related decision will affect the business as a whole. Many leaders become curious about retrofitting manufacturing equipment once they realize it is time to invest more heavily in automation. A machine may not have built-in characteristics to support automation, but retrofitting could expand its capabilities through an option significantly less expensive than replacement.
Schneider Electric is one industrial brand that recently improved equipment to align with company goals. Leaders focused on upgrading two of the company’s plants. Venancio Figueroa — Schneider Electric’s vice president — said the business wanted to improve production efficiency by replacing stamping, molding, and automatic assembly machines. Some pieces of equipment were 20 years old by the time of replacement.
Besides considering what a company wants to achieve moving forward, it is also essential to review whether the equipment in question is significantly hindering meeting those milestones. If not, the most appropriate thing to do is likely to repair the equipment and extend its life span. On the other hand, retrofitting and replacing equipment can often give it new features or capabilities that offer organizations more options for growth.
3. See If Market Demand Exists for the Product
One of the situations when it may make the most sense to replace a piece of equipment is if the existing one is in good condition and there is a healthy marketplace demand for it. Depreciation is a significant resale value factor, too. If the product came out more than a few years ago, that fact will likely decrease the price it commands.
Take the time to research industrial equipment online to get an idea of the going rate for what you hope to sell. Compare the details you find with anything relevant to your equipment. For example, people will want your well-maintained equipment in excellent condition more than the same item in fair condition with a spotty or non-existent upkeep history.
However, think about why you are getting rid of the equipment. Did the manufacturer recently stop supporting it and cease to sell spare parts? Potential buyers will probably know that, and many will hesitate to buy it.
Deciding to sell the equipment in such circumstances lets you put the profit from a sale towards new equipment. However, be mindful of the extra work a sale attempt will likely bring. For example, you will need to create an advertisement and schedule times for prospective buyers to see it.
An alternative is to take the item to an equipment auction. That is usually much quicker than a traditional sale, provided you are confident you can sell the product on the first attempt and will get at least the reserve price.
4. Check the Maintenance and Repairs Record
Following the recommended maintenance strategies is an excellent way to prolong a piece of equipment’s life span. It may also be mandatory to keep the piece’s warranty valid. However, a close examination of the equipment’s maintenance and repair data could tell you if proceeding with a retrofit or repair is worth it.
Retrofitting manufacturing equipment is probably not worth the trouble if the asset breaks down several times a year and impacts your facility’s productivity. However, if you are considering a repair, ask your technician for further details about what caused the machine failure. Was it misuse, an environmental problem, or something else you can control in the future? If so, you might feel confident about proceeding with a repair as long as you take the proper proactive steps to prevent a future failure caused by the same reason.
A well-maintained and trouble-free machine is often an excellent candidate for retrofitting. However, that is not universally the case — people familiar with the equipment used for bakery packaging say retrofitting is often out of the question with those assets. Replacement is typically more feasible. However, that option may take the facility’s assembly line down for a month while people remove the old machines and replace them with new ones.
5. Consider the Offered Support
Whether a business opts for fixing, replacing, or retrofitting manufacturing equipment, those decisions will likely come with warranties, customer service, and related assistance if things go wrong or questions arise.
People should learn how the level of support differs for each option. In the case of a repair, a reputable technician will usually guarantee their work and the associated parts for a certain period. However, that length of time is often longer for a replacement machine. Also, a retrofit may come with limitations. Perhaps a warranty covers things added onto the equipment to upgrade its functionality, but not the overall asset.
Organizations often offer training to accompany retrofits and new equipment purchases. That educational aspect is instrumental in helping companies get the most out of their upgrades.
People thinking about repairs or replacements should also realize companies often require them to go through specific networks to find qualified technicians that perform upkeep and fix issues. If the equipment is relatively new to the market, the professionals trained to assess it may be few and far between. In such cases, buying a more established product with a more extensive technician network is the most sensible.
Retrofitting Manufacturing Equipment Is One of Many Options
This overview shows why people should never decide too quickly when proceeding with equipment upgrades. Pondering the aspects here helps them become well-informed based on possibilities in the market and other factors shaping their circumstances.
