No equipment runs forever. It gets weak or faulty at some point and requires repairs. There are a couple of options to choose from when this happens. You can either go the traditional way by repairing or buying a replacement, which could be a new or a working used version.
But that is not all – you can also choose to rebuild the equipment. That being said, this option is relatively new and largely unknown. This post will help you choose between replacing, repairing, and renewing your faulty equipment.
You will come across a few useful calculations and questions to help you in the same respect.
Why should you go for a replacement?
Brand New Equipment as Replacements
Most owners will prefer to replace their aging instrument with a brand new. And that is understandable. The brand new will offer not only the latest technology but also the longest lifespan possible. They will spend little or nothing on maintenance. Thanks to the newest technology, the improved hydraulics and interfaces can speed up an ongoing project. However, the downside is always the price – new equipment will most likely be expensive.
Used Equipment as Replacements
A similar but less expensive alternative is to replace it with used equipment. Such used equipment types are available at lower prices, especially at auctions or on the private market. Another upside is the relatively recent technology that is found in the used equipment.
These downsides are somewhat clouded by their shorter lifespans and the varying maintenance and quality records. The maintenance costs may be considerably high, especially when the equipment breaks down sooner. In the long run, used equipment is eventually replaced or rebuilt.
A few of these problems can be avoided by going for used equipment with low hours of 3,000 to 5,000 hours of use. A closer look at the maintenance records will help to avoid risky used equipment that may need several repairs in no time.
How frequently does the previous owner service the equipment? Where is it usually stored? Are the oil samples analyses consistent? The answers to these questions will help in your assessment of used equipment.
Why should you go for rebuilding?
With rebuilding, you spend less and get a like-new lifespan from the equipment. However, you must be prepared to wait, because rebuilding takes much time.
You might also miss out on some new technology – not all technology can be upgraded via rebuilding.
You can choose from a wide range of rebuilding options. Some rebuild just the power train components. Others combine separately sourced rebuilt parts into a whole machine. Either way, the approach is always the same.
After the inspection of the equipment, the rebuilding company disassembled it and rebuilt it from scratch. The rebuilding process includes the upgrading of any software or engineering processes. The rebuilt machine is properly tested and inspected before being dispatched.
The rebuilt equipment, most times, offers better performance, thanks to the new technology and parts. Some of the parts of interest in rebuilding an equipment include the engine, transmission, driveline, and the engine control module. Others are water, oil, and fuel pumps.
You may also ask that the rebuilding company do some extra work to suit your taste – hydraulic upgrades, cab upgrades, and painting.
Why should you go for repair?
If you need a fast and affordable means to get your faulty equipment back on track, repairing it is the way to go. You are better off repairing any equipment with one or two broken parts. It is even more suited for situations where you need the equipment back for an ongoing project quickly.
Repairing faulty equipment is the most affordable option on the list. However, it does little or nothing to extend the lifespan of the equipment. At best, it extends the lifespan of just a component – the faulty component.
The damage may affect other components of the machine if not discovered early. Wear and tear is another reason you may have several parts of a machine failing at once. The cost of repairs depends on the extent of the damage.
If there are no additional repairs required, a stopgap measure is a way to go. While that is ongoing, you can assess the possibilities of replacing or rebuilding the machine. The timeframe for repairs will determine how long you have to wait to rebuild or replace your equipment.
Sometimes, you may need to repair temporarily until you get to the time of the year when you can enjoy the best rebuilding or replacement prices.
Before you Repair, Replace or Rebuild…
You should do a proper background check before deciding to replace, repair, or rebuild your equipment. Do not limit your consideration to only the costs; you may be forced to go for the cheapest option – repairs.
The right way to go about it is to assess your options based on your situation. What is the equipment’s lifespan? Are there any possible future repairs over the next two or three years? You need to ask yourself these questions and many more.
For starters, we have highlighted a couple of essential questions to ask yourself before deciding to repair, rebuild or replace.
Is the equipment the best option for your business in line with the current trends?
Newer and better technologies are always introduced into the business world. The equipment that was the ‘latest’ a few years ago might have become obsolete today. This is why you should check the performance expectations and regulations, alongside the relevance of the current technology in today’s world.
It does not end there. You should also make plans for future needs. Rebuilding an equipment affords you the chance to extend its lifespan. But this would only be a good call if the equipment and its technology will remain relevant to your business in a few years. If not, can you upgrade the technology to the latest when it is time?
If the answers to these questions are negative, you are better off replacing the equipment.
Do you need new technology to stay relevant in business?
One of the biggest advantages of replacing older equipment is that it allows you to access the latest technologies.
From improved fuel efficiency to lower emissions, GPS locations, and remote sensing, equipment owners consistently find ways to enjoy top technological advancements. Why? It increases their chances of succeeding.
Another reason you may need to replace or rebuild your equipment is to adhere to new regulations. The authorities are always working on better regulations, for example, on emissions and safety. Although repairing or rebuilding are possible options here, replacing is usually the most cost-effective option.
New technology may be the gamechanger in some industries. For example, tractors equipped with remote sensing functionalities can analyze soil nutrients. Farmers can leverage this information to improve their yields. Likewise, newer dozers have intuitive interfaces and customizable steering and responsiveness. This means they can be configured to work in different terrains.
Weather sensing and GPS functionalities can help with fleet management and improve the security of the equipment.
Are your operating costs or fuel use significantly affected by new technology?
Operators spend considerably on fueling, especially if their fleets comprise mostly heavy equipment. So, any option that will offer improved fuel efficiency will be the right call. Rebuilding and replacing offer higher efficiency, although the latter is faster and easier. In terms of rebuilding, the powertrain of an old equipment can be revamped to improve fuel efficiency.
If buying a new machine will significantly reduce your current operating costs, you should go for it. Less fuel consumption means lower operating costs, and ultimately an improved bottom line.
What is the state of the equipment?
You may only need to repair or partially rebuild a machine if it is well-maintained. Conversely, the same cannot be said for one with a record of constant faults. Inspect the equipment physically and check the maintenance log.
You are looking at the articulation points, the hydraulic system and seals, and the engine compartment. If the equipment is not properly maintained, the repairs needed will most likely be extensive. Non-operational or badly hit equipment are better off replaced or rebuilt.
How much are you spending on maintenance in the future?
Wear and tear is unavoidable, even for the best-maintained equipment. Repairs can ensure constant operation but not an extended lifespan. For older equipment with several hours of use, the chances of more components becoming faulty soon enough are high.
So, factor in the repair costs and the labor costs for maintenance over the next couple of years. Is it cheaper to go for a complete rebuild? Is replacing the old equipment cheaper?
Does the equipment have a good resale value?
You can raise a substantial part of the cost of a new equipment by selling the older one. So, it is helpful to assess the current market value of your old equipment. Compare it with the sale prices of similar equipment and how long they stay listed before getting sold.
If they spend less time on the listing, it means their demand is high. In this case, you can either sell privately or via an auction. Fixing cosmetic defects and ensuring an accurate maintenance record and oil analysis reports will increase your chance of getting the best selling price possible.
How badly do you need the equipment?
If you are not bothered about waiting for so long to have your equipment back, rebuilding is a viable option. You can determine this by accessing your current need for the equipment.
Substitutable or seasonal pieces of equipment are the best candidates for rebuilding. You can easily rent a replacement to finish up the current project, provided the rental costs are relatively reasonable.
Estimating the cost of replacing and rebranding
Having answered all of the questions highlighted above, you are better positioned to decide whether to rebuild or replace your old equipment. Both options – replacement and rebranding – are valid if getting an updated technology for your business is the priority. This prioritization may be informed by the discovery that your current equipment has outdated your business’s current needs.
You still cannot take a clear position? Take a look at the economics involved in both options. Are you replacing just one component or multiple parts at once? The former translates to spending less compared to the latter.
Also, always factor in the lifespan of the equipment against the replacement costs. Which costs more – repairing or getting a new part entirely? If you choose to repair, are you getting at least 75% of the lifespan a new part will offer? If the answers to this question are affirmative, you are better off repairing than rebuilding the faulty part.
Maintenance is key when it comes to equipment. However, do not focus all your attention on that. You should also have it in mind to replace your fleet. The older the machine gets, the more maintenance it needs. A higher frequency of maintenance will translate to even more expensive repairs.
When is the best time to consider replacing or rebuilding your equipment?
The best time to commence preparations is two or three years before the actual need for either arises. The residual value at such times is usually higher, while the maintenance costs stay low. You can also do major repairs without worrying about stalling the progress of immediate projects.
Post by kepservices.co.uk