Once you’ve been in business for a while, if all is going well, you will inevitably need to replace or add to your existing glass machinery inventory. Whether you are bringing in additional equipment or replacing a machine that is near the end of its life, you face the same question: buy new, or purchase used hardware? This article will discuss some of the factors to consider.
When Is it Time to Add More Glass Machinery?
You’ll know when it’s time for more glass fabrication machinery. You are the expert on your products and processes. But if you are starting to notice some of the following, you are at or near that tipping point where expanding your capacity makes sense:
- You are running all available shifts and you can’t keep up with production needs unless you skip preventive maintenance.
- Your customers’ wait times are gradually getting longer – a day here, a day there – because even though your processes are running well, you can’t fulfill all your demand.
- Customers hear your wait times for product delivery and decide to buy elsewhere to get shorter lead times.
- You’ve got space and you can make the business case.
When Is it Time to Replace Existing Glass Equipment?
Maybe things would be fine if only the equipment you had was operating reliably. Then you could meet your production obligations. But equipment breakdowns are not the only reason for considering a glass machinery refresh:
- The machine is dragging down the whole process when you look at equipment effectiveness (a combination of machine uptime, machine cycle efficiency, and part quality off that machine).
- The machine does not meet a new safety or environmental waste standard and cannot be upgraded.
- The machine is an energy hog and similar equipment that is more efficient (and less costly) to run is available.
- The machine is manual, and you could increase production volume by upgrading to semi or fully automated machine.
- Machine replacement parts are difficult to obtain and not practical to make in house.
- Your product mix is changing, and the new products require different processing.
- New or better technology available to accomplish the same task
Decision Point: New or Used Equipment?
Once you’ve decided that you need to buy a piece of glass fabrication equipment, whether to expand your production capacity or to replace a machine that no longer meets your needs, you face the next decision: whether to buy new or used machinery. One way or another, this decision can always be collapsed down to the single question of how it will affect your plant’s profitability.
Your accountant can help you work through the obvious financial issues involved in buying new machinery versus previously-owned equipment, such as:
- How much you can afford to spend up front.
- The effect of interest payments if you finance the purchase. Can the seller help with financing?
- The tax benefits of depreciation and the initial high rate of depreciation of new hardware.
- How much additional revenue you can expect to generate with your added or restored equipment.
- The value of the warranty offered on either a new or used machine.
These business facts of life may end up controlling your decision. But here are a few other potential considerations that involve your knowledge of your production process and your vision of your company, both now and for the future:
- Availability of the machine you need with the features you need (if you need a vertical washer, a used horizontal washer, no matter how cheap, isn’t much help).
- How fast do you need it? Used equipment is already built and available, new equipment is usually made to order, and delivery takes longer.
- How long do you plan to keep the equipment? A longer time horizon makes new equipment more attractive.
- Your evaluation of the original quality of a used machine. Does that model have known problems?
- Your company’s brand – what’s your niche? If your image is “leading edge technology,” this may be a consideration in deciding between new and used.
Final Thoughts
When you are considering a large capital outlay for your glass fabrication operation, there are a lot of factors to consider. One of the biggest issues cannot be decided with pencil and paper. Who do you trust to guide you through the processing of buying your pre-owned equipment? You will want to work with a machine listing service that has a long history of helping clients find used equipment with the features they want; a company that can help obtain documentation from the seller so you know exactly what you are getting; and an outfit that offers help in finding the best financing.
Glass Machinery Direct can make the whole process easy for you. Contact us for assistance with buying or selling used glass fabrication machinery.
