There are two immutable laws: nothing lasts forever, and if something can break – it will break at the worst possible time. These two lessons come to mind in the moment that a critical piece of machinery fails. If you’re lucky, emergency repairs can restore production lines, but the question then arises: refurbish or replace? This decision can be very costly and careful, data based consideration offers the best hope for the most positive outcome longer term.
The most obvious consideration is cost. New equipment comes with the associated costs of removing and disposing of discarded equipment, training, cost of operation, training, maintenance and capital outlay. Balance against this is the potential for increased productivity, service life, the security of uninterrupted production, and possible improved safety/environmental impact benefits. For cost comparison between refurbishment and replacement, estimates of remaining service life, the cost of operation, market value and value at disposal can be compared to the acquisition costs, life expectancy, operating costs and salvage value of a new purchase. A careful calculation can arrive at an annualized cost for each choice.
Cost is the most significant but hardly the only consideration. The age of any piece of equipment has a variety of implications. As it ages, the repairs are likely more extensive and more frequent. Today’s rapidly advancing technologies are likely to offer significant improvements in capacity, speed, and efficiency. The value of increased capabilities is significant and may offer competitive advantages. Newer equipment, with more service years remaining, probably provides a different replace/repair calculation.
The impact of machine failure in lost production is a serious consideration. How long a machine failure stops production is a very direct cost. If repairs to a machine are complex, require difficult to acquire skills, or are expensive, the impact on a replace decision is more powerful. Conversely, if a machine is quickly, easily and inexpensively repaired, the value of repair is increased.
Breakdowns may pose safety issues for employees, and the risks may support a replacement decision. Newer machines may incorporate features that reduce operating risks. Beyond the commitment to a safe workplace, the cost of lost hours attributable of the failure of older equipment is substantial.
Beyond the simple repair or replace decision is a third option. Refurbishment can breathe added, trouble-free life to older equipment without the cost and disruption accompanying new purchases. Companies such as CJI Processing can assist in assessing the relative cost/benefits of all three options: repair, replace or refurbish.