15 Mar 5 Things to Think About Before Buying New Machinery
As a business owner In the manufacturing industry, many of the decisions you make revolve around established margins of profit related to production efficiency and whether or not a purchase or process will add bottom-line value to your operation. You’ve already invested massive amounts of capital into your production line in order to carry out the manufacturing processes necessary to fabricate and assemble the products you sell. But there will come a time, whether due to equipment failure or a business-related need, that you’ll be faced with the decision of whether or not to invest in new machinery.
As a marketplace for new and used manufacturing machinery, the professionals at The Equipment Hub understand this common struggle and we want to help you determine what’s best for your operation by providing you with the insight you need to make the right decision.
1. What’s The Overarching Goal for Your New Machinery Purchase?
On the surface, whether or not to buy a piece of equipment comes down to a fairly basic question – what purpose does purchasing the piece of equipment serve? Drilling down into some of the reasons you might be making the purchase is really where we can determine if dropping up to six figures on a new piece of equipment is truly in your business interests, or if an alternative approach would serve your needs more effectively.
Addressing Production Inefficiencies
Production efficiency is one of the primary drivers of profitability for your operation, so constantly monitoring your production line’s ability to produce high-quality output with few defects at a rate sufficient to meet the demands of your customers is a key factor in deciding whether to make any major investments into upgrades. Will the new machine increase output and reduce waste or defects?
Expanding Your Production Capacity to Support New Product Offerings
Are you expanding your business through the launch of a new product that cannot be fabricated by your existing production line? Will the purchase of the new machinery give you the ability to not only manufacture the new product but support future expansion on similar product lines?
Versatile manufacturing methods have opened up previously niche markets to numerous competitors across all industries. Manufacturing is no stranger to this phenomenon, and it’s important to consider if the purchase of new equipment provides a competitive advantage. The advantage can manifest in faster production leading to a faster fulfillment time to consumers or through the use of new methods or materials allowing for lower production costs and the ability to decrease the costs to consumers.
Do Your Financial Needs Point to Purchase or Leasing…Or Outsourcing?
The previous three items really boil down to how flexible your finances allow you to be when it comes to the purchase of new equipment. Running the cost analysis through your accounting team might show that buying machinery new might provide you any combination of the above, but the time to recoup your investment and pay off the unit is such that other options might be more suited to your situation. In the manufacturing world, you can also lease equipment, which will offset the costs significantly and give you the chance to determine if a more permanent arrangement is in your best interests down the road. Cost analysis might also determine that the best way to expand production capacity or acquire components necessary to build new products is to outsource the items you can’t make yourself, eliminating the overhead and long-term investment while benefiting from the expanded services to your customers.
2. The Case for Purchasing Machinery Upgrades or Attachments
As with many businesses across multiple segments of today’s economy, industrial machine manufacturers are looking to maximize market share. In order to accomplish this, the machinery industry has started to include scalable functionality into new machinery. This flexibility is accomplished through the use of machinery upgrades or attachments and can provide an affordable alternative for scaling production or adding capability in order to expand product offerings.
3. Compare and Contrast Manufacturers and Suppliers
By the point you’re considering buying machinery, you should have a solid idea of what you need out of new manufacturing equipment. Whether it’s expanded output or adding a new product to your line of offerings, it’s necessary to do a deep dive and read up on customer reviews, compare manufacturer warranties and support plans, and find out which new machinery has features and performance metrics most in line with your needs.
4. Consider Learning Curve Involved with Integration of New Machinery
Integrating new equipment into your production line not only will result in downtime, it will require investing resources into training your operators on the proper use of the new machinery. During this period of learning how to use new machinery, there might be a hit to productivity depending on the machine’s complexity and the impact of possible user error on the final output.
5. Buying New Machinery Isn’t Your Only Option – Consider Used or Refurbished
If your business case for purchasing new doesn’t hinge on a new manufacturing method not possible through other methods, then it’s possible you might achieve the same business impact at a fraction of the cost by considering purchasing a used or refurbished model. Taking into account the reduced lifespan and possible impact on productivity or efficiency, it might be possible to accomplish your business goals with a unit you find on the extremely robust after-market for industrial machinery.
Buy Used & New Machinery from The Equipment Hub
When it comes to marketplaces for new machinery, make The Equipment Hub’s online portal your first stop. If you’re considering after-market alternatives for buying machinery, we have you covered there as well. If you have questions or concerns we haven’t answered in this article, our team of expert consultants can help assess your needs and decide what the best solution is for the challenges you’re facing.