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When Seeking Production Equipment, Should You Buy New or Used? (Part 1 of 4)

“I'm looking to acquire a piece of production equipment for my laundry, but am undecided about whether to buy it new or used. What information should I consider as far as total cost vs. benefits are concerned? I want to make sure I'm comparing apples to apples." TEXTILE/UNIFORM RENTAL: Steve Kallenbach has been in the uniform apparel and industrial textile business for more than 29 years, from route sales/service to group general manager to regional sales manager. He has been regional sales manager for American Dawn since 2004.
This is such an important question in our industry, and there are many things that are sometimes overlooked.
Visit any laundry that just installed a new or used piece of equipment and find out what the staff learned in the process. Most would do a few things differently.
Here are some of the key factors to consider:Return On Investment (ROI): Based on some of the items listed here for cost savings, what is the return-on-investment comparison between the two (new or used)?Cash: What is your cash position? If you need to finance, can you get a better rate or longer term with either of the options?Efficiency: Which is more efficient in energy, capacity, chemical/water use, and process flow?Green: Which is “greener,” both for environmental impact and for marketing your services?Safety: Which is proven to be safer for your operation, based on where it will be placed?Quality: Your new equipment should be elevating your quality over your present equipment.Labor: What is the labor reduction comparison (or simple output) between the two options?Space: Typically, plants don’t have a lot of empty space. Which takes less room?Warranty: The warranty on some used equipment is just as good as if it were new. Know the difference.Installation: Which installation will disrupt your normal business less, and if you choose the other option, is it worth the disruption?
What kind of installation support is included in the price or package — or, if not included, what is the cost comparison? Consider the time of day needed to install. Can you do it on a weekend, so you don’t disrupt your production flow?History: If used, where was the equipment previously (what part of the country, considering humidity and internal rust) and why was it replaced? Has it been rebuilt completely? If possible, get pictures first, see the machine personally and talk to the previous owner.
If you’re looking at new equipment, make sure to visit a current operation with that equipment working. See it in action and talk with the local engineer. Learn from whatever mistakes or issues that operation may have experienced during installation, etc.Vendor: Make sure you’re dealing with one of the many fine, industry-experienced, reputable equipment brokers or companies. Know their reputation.Parts: Where will replacement parts come from and what is their availability should you experience a breakdown?Maintenance: If you follow the manufacturer’s specified guidelines for maintenance, what are the comparative costs of the two options? Look at the key working parts for both the new and used options (such as a motor on a washing machine) and compare the cost of replacing either one that’s out of warranty.Morale/Image: Which option will have a more positive effect on employee morale or your marketable image?
Investing in plant equipment is a major move, and typically one that affects your operation for years, if not decades. It’s a decision that shouldn’t be entered into lightly.
Whether comparing new to used, or new to new, you need to go through this checklist, decide whose opinion you trust most and, after completing your own due diligence, make the investment that makes the most sense to the lifetime of your business.EQUIPMENT DISTRIBUTION: Scott McClure is vice president of sales for Pellerin Laundry Machinery Sales, Kenner, La. He was hired as CAD engineer in 1992 and became the Louisiana sales rep in 1996, winning numerous awards while in the post. He became sales manager in 2003 and VP of sales the following year. He oversees sales in a seven-state territory.
As far as comparing “apples to apples,” new equipment offers several advantages.
New equipment carries manufacturer warranties and, in most cases, labor warranties. New equipment guarantees you the ability to preserve recommended preventive maintenance and repair procedures from the date of purchase. New equipment should have all of the latest advances in technology, energy and labor efficiencies, and safety devices (i.e. microprocessor and inverter controls/drive systems).
There may be some good deals out there in the used equipment market. In some cases, laundry facilities may shut down, relocate or expand and can no longer use a piece of equipment that’s in relatively good shape. But just like buying a used car, the buyer should always conduct a thorough inspection and learn as much as possible about the history of the machine in question.
Make certain several questions are answered when considering used equipment.
When was the piece of equipment manufactured and how long did it actually run? One shift? Two shifts? The average life expectancy on well-maintained laundry equipment operating in a single-shift operation is about 15 years.
Which brings us to the next question — was the machine maintained during its years of service? Does the previous owner have any type of maintenance records (parts and labor costs) on the machine? You should learn as much as possible about the history of the machine.
When buying used equipment, you should always consider why the owner is getting rid of the equipment. Are there mechanical problems with the machine or are there problems getting parts, service and support from the manufacturer?
If possible, it’s always good to make a site visit to see the used machine, preferably while it’s operating. You should also verify if there is an equipment manual and/or any spare parts available with it. You should also inspect the machine’s integrity with regard to original design and controls, and inspect for damaged/inoperable safety devices, missing parts, exposed wiring, rust and chemical damage, etc.
Every machine should have a nameplate listing the manufacturer, model and machine serial number. You should be able to contact the manufacturer directly to find out the exact age of the equipment. If you can’t contact the manufacturer, or they are no longer in business, then you probably shouldn’t consider the piece of equipment due to questionable parts availability and support.
 

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