vice president of sales- Midwest
- FMA
- The Fabricator
- FABTECH
- Canadian Metalworking
Categories
- Additive Manufacturing
- Aluminum Welding
- Arc Welding
- Assembly and Joining
- Automation and Robotics
- Bending and Forming
- Consumables
- Cutting and Weld Prep
- Electric Vehicles
- En Español
- Finishing
- Hydroforming
- Laser Cutting
- Laser Welding
- Machining
- Manufacturing Software
- Materials Handling
- Metals/Materials
- Oxyfuel Cutting
- Plasma Cutting
- Power Tools
- Punching and Other Holemaking
- Roll Forming
- Safety
- Sawing
- Shearing
- Shop Management
- Testing and Measuring
- Tube and Pipe Fabrication
- Tube and Pipe Production
- Waterjet Cutting
Industry Directory
Webcasts
Podcasts
FAB 40
Advertise
Subscribe
Account Login
Search
Analyzing coil handling equipment purchases
New, used, or refurbished?
- By Kevin Enos
- April 11, 2005
- Article
- Bending and Forming
Refurbishing can be a cost-effective way to breathe new life into an old piece of equipment. This cam feed was originally built in 1974. |
Recent economic growth finally has spilled over to the manufacturing sector, so this might be a good time to upgrade your stamping process. While orders may be increasing, so is the demand for lower part cost. By evaluating your current coil handling process, you may find that the aging equipment and controls are hindering your flexibility, productivity, and efficiency.
For nearly all manufacturers, making major capital investments in new, more advanced machinery is no longer solely a competitive strategy, but a strategy for survival in an increasingly demanding market. New equipment, when compared to used or refurbished, may appear to be the most expensive option, but new equipment often offers the best value for the dollar. You may need to look to state-of-the-art machinery to handle shrinking lead-times, pursue new markets, and increase production ... all while remaining competitive. These are some of the factors other than price that forward-looking purchasing executives consider when making equipment decisions.
A New Way of Looking at an Old Problem
The old thinking was that a capital investment program consisted only of replacing worn-out machinery. This has changed. No longer are we preoccupied primarily with the physical life span of equipment when considering a capital investment. The main consideration now is the economic life span of the plant as well as the machines. To reach intelligent decisions on capital investments, you must consider long-range objectives, future technology changes, the need for additional products, and other factors unique to your company.
How should you go about forecasting the future cash returns from a prospective investment in capital equipment? From the standpoint of practicing capital budget analysis, start by preparing accurate forecasts of future returns from the proposed capital equipment investment. In other words, forecast future returns first by forecasting the future rate of return, which your company will realize on the cash, receivables, inventories, and fixed assets in the line of activity to which the capital equipment relates.
For example, consider a case of cost-reduction equipment. (Cost-reduction equipment is defined as equipment purchased for the sake of performing the same function as an existing piece of equipment, but with more productivity or better efficiency—that is, it contributes to cost reduction.) The forecast of future investment returns involves estimating the future savings that will be realized in labor, material, and other costs for some forecast level of future output. The great strides made in increased output per labor-hour and output per dollar of investment have been made to a great extent by installing better machines. If your company is to continue to improve productivity, it is necessary to replace obsolete equipment. Replacing obsolete capital equipment almost always makes possible increased production as well as higher productivity.
This stationary feed was retrofitted with a traversing capability to provide the user with the capability to run coils or blanks. |
For most businesses, the most complex, excruciating decision they must make is whether to purchase additional capital equipment. They ask, Will the market support it? What will the economy do? Can we afford more debt? Can we consolidate production and sell existing equipment?
The bottom line is that you must analyze the market and make sure you can get a return on your investment. You do this by asking whether your current customer base will support the additional capacity. If not, you must decide if you are capable of expanding your market. Determine if your competition already offers the same capabilities. If so, you must decide if the prospective machine will produce a better product, run faster, or provide other competitive advantages.
You should analyze your customer base by looking at the growth of various revenue channels, determine how much potential growth you can achieve from them, and then estimate how much growth you can achieve from new customers. Consider overall economy activity as well, but always look specifically at the economic projections for your industry, both regionally and nationally.
Many times companies consider purchasing equipment when they bid on or win a contract for a specified amount of time. Contract work can justify adding equipment, but you must consider many factors related to the contract. Most important is the duration of the contract. It is extremely difficult to justify purchasing capital equipment if the contract work does not cross over into your main business focus, especially if the contract is for only a year or two. If the contract is for several years with the option to extend it even longer, then it becomes easier to justify the expenditure.
The marketability of the equipment is another important factor when considering an additional or replacement machine. This is especially crucial if you are looking at new equipment for a contract or if you are looking at entering a new market altogether.
Making the Choice
If after careful analysis you have determined that you need to replace or add a line, the next decision is whether to buy new, used, or refurbished equipment. Some factors to consider are: what, if any, support you will receive after the purchase of used or refurbished equipment; whether the supplier provides service, technical assistance, training, and equipment information such as a recommended preventive maintenance schedule, drawings, and a recommended spare parts list; and whether a warranty is provided.
New Equipment. Advantages of new equipment include the most up-to-date components and controls that provide improved accuracy, integration, energy efficiency, and safety. Most new coil handling equipment has controls that allow full communication with presses and ancillary equipment, which potentially can reduce the number of equipment operators needed, setup time, and downtime.
Another important attribute of new equipment is its ability to deal with new higher-strength steels. Older equipment was not designed for materials that did not exist when it was made. New equipment is engineered and built for these new steels, as well as for prepainted, embossed, and other application-specific materials.
Used or refurbished equipment. New equipment may not be the best option for every company or every situation. In many cases, used or refurbished is the way to go.
- Used equipment has a track record. You can narrow your search for used equipment to machines that you know have a good record of reliability. A new machine with an unproven design carries the risk of having an unknown uptime record.
- The price of a used machine generally is more flexible than that of a new machine.
- Used equipment usually is available immediately ... no need to wait.
- When coil-handling equipment is available with a press, it allows the buyer to purchase a complete line that is already integrated together.
- If the used equipment you are considering is manufactured by the same OEM as equipment you currently have, this may provide commonality of spare parts and maintenance.
When considering refurbished equipment, bear in mind that the extent of the refurbishment influences the price. Find out how the equipment was refurbished—electrically, mechanically, pneumatically, or hydraulically. A general inspection can help you identify potential problem areas before making a purchase.
Following is a general list of areas to inspect or evaluate when considering equipment sold either as-is or refurbished.
Coil Car:
- Lift jacks
- Gearbox
- Chains and sprockets
- Bearings
- Hydraulic cylinders, hoses, and fittings
- Pivot points
- Cabinet
- Wheels
- Valves
Reel:
- Mandrel shoes
- Drive and hydraulic motor
- Chains and sprockets
- Bearings
- Hydraulic cylinders, hoses, and fittings
- Cabinet
- Valves
Hydraulic Power Unit:
- Filter
- Hydraulic cylinders, hoses, and fittings
- Tank
- Motor
- Valves
Stock Straightener:
- Straightener head
- Chains and sprockets
- Gearboxes
- Belts
- Straightener gears
- Bearings
- Straightener roll surface
- Backup rolls
- Pinch roll surface
- Hydraulic cylinders, hoses, and fittings
- Controls
- Cabinet
- Valves
- Lubrication system and points
Threading Table:
- Bearings
- Hydraulic cylinders, hoses, and fittings
- Mounting posts
- Table and mounting surfaces
Electronic Servo Feed:
- Lift jacks
- Guide posts
- Belts
- Cluster gears
- Hydraulic and pneumatic hoses and fittings
- Controls
- Motor/drive
- Pinch roll surface
- Backup rolls
- Cabinet
- Valves
In addition to these general items, it is also important to ascertain the condition of the components in the main electrical enclosure.
Kevin M. Enos is regional sales manager for Perfecto Industries Inc., 1729 W. High St., Piqua, OH 45356, 937-778-1900, sales@perfectoindustries.com, www.perfecto industries.com.
About the Author
Kevin Enos
76 Hinckley Road
Clinton, ME 04927
207-692-4811
Related Companies
subscribe now
The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
start your free subscription- Stay connected from anywhere
Easily access valuable industry resources now with full access to the digital edition of The Fabricator.
Easily access valuable industry resources now with full access to the digital edition of The Welder.
Easily access valuable industry resources now with full access to the digital edition of The Tube and Pipe Journal.
Easily access valuable industry resources now with full access to the digital edition of The Fabricator en Español.
- Podcasting
- Podcast:
- The Fabricator Podcast
- Published:
- 04/16/2024
- Running Time:
- 63:29
In this episode of The Fabricator Podcast, Caleb Chamberlain, co-founder and CEO of OSH Cut, discusses his company’s...
- Trending Articles
AI, machine learning, and the future of metal fabrication
Employee ownership: The best way to ensure engagement
Steel industry reacts to Nucor’s new weekly published HRC price
Dynamic Metal blossoms with each passing year
Metal fabrication management: A guide for new supervisors
- Industry Events
16th Annual Safety Conference
- April 30 - May 1, 2024
- Elgin,
Pipe and Tube Conference
- May 21 - 22, 2024
- Omaha, NE
World-Class Roll Forming Workshop
- June 5 - 6, 2024
- Louisville, KY
Advanced Laser Application Workshop
- June 25 - 27, 2024
- Novi, MI