04 Nov Repair or Replace: Your Heavy Equipment Repair Guide
Industrial equipment is built for punishing, ongoing use. In a perfect world, where your team has adhered perfectly to machinery maintenance plans, and every operator has performed their duties flawlessly, breakdowns never happen and your machinery will last as long as the manufacturer intended it to last. Unfortunately for your capital expense budget, this isn’t a perfect world. Over time, inevitably, a piece of equipment in your manufacturing line will break.
If you’re lucky, it will be a quick and easy repair. Unfortunately for you, you aren’t always going to be lucky, and at some point, an equipment failure will be a huge costly disaster and require time and resources you may not want to invest. It’s even possible that after one breakdown, you repair a piece of equipment, and it breaks again a few weeks later. You repair it again, and a month down the road, the same thing happens.
Depending upon the severity and the costs involved, any of these events can lead to the same conclusion: you, sitting at your desk with a repair estimate in one hand, and your mouse in the other, navigating to The Equipment Hub’s online marketplace of new machinery to price out a new replacement. It’s at this point that you have to ask the question: Do I repair or replace? Let’s dig into the factors that will influence this decision and how best to proceed in either scenario.
Influencing Factors on Heavy Equipment Repair
In some cases, the question of heavy equipment repair or replacement will simply be a calculation, and the cheaper option wins out. However, it’s often the case that you’ll have to run through the rubric of questions and considerations outlined below – or a version of them relevant to your business – to be able to properly determine which option is the most financially sound.
Is the Repair Covered By the Manufacturer’s Warranty?
Depending on the nature of the equipment failure, the age of the equipment, how well you’ve maintained the machine according to preventative maintenance and repair requirements, there’s a strong chance that the original manufacturer’s warranty would cover the cost of repair, or in the case of total equipment failure, replacement. Not guaranteed, but a conversation with the manufacturer’s support team should always be your first step. Even if it’s not a warranty-eligible event, they might be able to help troubleshoot or provide valuable information at the early stages.
Equipment Age and Manufacturer’s Intended Service Life
Modern machinery and electronics are not built to last forever. Shorter life cycles are intentional to allow for innovation and advancements and new product lines to be introduced every few years. The older the machinery, expect the cost of repairs to increase over time. Even on a solid industrial maintenance plan, parts will start failing more and more often, and it will quickly come down to having to purchase a newer model to guarantee efficiency and productivity.
The bulk of the decision process hinges upon performing a fairly elaborate cost analysis that is a more complex and involved version of “which is ultimately the cheaper option?”
The first considerations of the cost analysis relative to repair or replace are what are the total comprehensive costs of purchasing a new piece of equipment, including the cost of the unit, service life, salvage value, costs to operate the unit annually, and its ability to generate revenue.
From there, you have to then determine what are the heavy equipment repair costs on the equipment you already own; how much do you still owe, if anything, on the existing unit; a review of the repairs and services performed throughout the life of the unit to date; and anticipated repairs moving forward. If you repair the unit, versus replacing it, will you just be repairing it again in a few weeks or a month’s time? Is this ongoing repair cost low enough that you can leverage the unit through its intended service life, or will it, in the long run, be a cheaper fix to salvage the old unit and purchase a new one? If the repair does hold, can the machine operate at an efficiency level sufficient enough to continue to be profitable? If it can’t keep up with the demands of the business, then replacement becomes the more viable route.
The Not-So-Hidden Costs of Downtime
A 2016 report released by Information Technology Intelligence Consulting (ITIC) placed the cost of downtime for companies unable to operate due to an equipment failure at an average of roughly $300K per hour. So the question of repair versus replace becomes a race against the clock, as the costs of repair or replace must also take into account the associated downtime. Will it be possible to acquire the necessary parts and schedule a service provider to repair your machinery faster than a replacement piece of machinery can be ordered, delivered, and installed?
Oftentimes, businesses opt for repair, if only to get the production line back up and running in order to minimize immediate financial impact, and then start the cost analysis discussions of replacing the equipment in question before another failure occurs.
The Case for Safety
A significant element in the consideration of repair or replace comes down to the safety of your workers. As equipment ages, the severity of equipment failures can increase tremendously and place the safety of employees in question. A thorough inspection and assessment of the machinery are necessary prior to repair to determine if a repair will allow the machine to operate safely or only delay an inevitable catastrophic failure that could result in significant injuries. If safety standards can be maintained following a repair, however, then repairing the unit remains the better of the two options.
The Equipment Hub – Heavy Equipment Repair & Dealer
The decision to replace or repair a piece of industrial machinery is a complicated one that must take into account a number of conflicting priorities. Whichever path you end up traveling down as a result of your analysis, The Equipment Hub provides our clients with access to a wealth of resources.
From machinery maintenance support throughout the Atlanta metro to international access to machinery assessments and a premier online marketplace where potential buyers and sellers can sell off old equipment and buy new or used manufacturing machinery, the Equipment Hub is here to support your business through every challenge. Contact our team today to learn more about our products and services.