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In many organizations, staff must look at used equipment as part of the procurement process. This is especially true in the manufacturing, maintenance, and logistics industries. The primary benefit of used equipment is a lower initial cost and potential compatibility with existing equipment. The most important consideration when looking at used equipment is determining how much additional work is required to install the equipment.
When looking to purchase used equipment, there are four items to consider: quality, useful life, availability of parts, and total cost of ownership. The primary risk of purchasing used equipment is that the equipment breaks down before the initial cost is covered. Many organizations prefer to purchase used for certain categories of equipment. In many industries, large equipment is designed for a very long useful life. Ongoing maintenance and part replacement can extend the life of this type of equipment well beyond the initial manufacturer's warranty period.
It is a good idea to bring a skilled master mechanic to inspect used equipment before making any purchasing decision. Large equipment is very expensive to purchase new, and significant savings can be achieved through the use of well-maintained used equipment. Make sure the mechanic has sufficient time and assistance to properly inspect the equipment and provide a recommendation.
The useful life of mechanical equipment is traditionally quite long, ranging from 25 to 50 years. This life can be further extended through skilled maintenance and repair. There are always components to any system that cannot be repaired or replaced past a certain level. It is this limiting factor that determines the useful life of the equipment.
Parts required for large equipment systems are typically available for many years. These replacement parts can be sourced from the manufacturer, refurbishment centers, or junkyards. It is very common for scrapyards to disassemble equipment that cannot be repaired and sell the parts. Take the time to review the availability and price of parts for the used equipment.
The total cost of ownership is different than the original purchase price. The concept of total cost is a more comprehensive view of all the costs associated with a purchase decision. This cost includes the purchase price, transportation fees, repairs, parts, and labor required to implement the equipment and make it operational. It is the total cost of ownership that needs to be compared when choosing between used and new equipment.
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