By Justin Kadis, Business Development, Federal Equipment Company
Planning and preparation are the keys to success in any enterprise, and making plans for the possibility of equipment liquidation from the time of procurement is no exception. There are clear advantages to planning for your facility’s future, especially if it includes the opportunity for cost savings or a new way to look at purchasing budgets.
Those that embrace a forward-looking mindset from the point of procurement are at an advantage. The most strategic way to cover all equipment bases is to align with a veteran industry organization versed in all steps of the equipment process. Such a strategic partnership will help manufacturers to see the bigger picture and think well beyond procurement — even at that initial stage — to consider the next phase, from the machine’s usage and life on the facility floor, until the time it is no longer useful, and can be reintroduced into the market.
Preparations from the Start
When you factor in all the phases of your equipment at the time of purchase, you are saving both time and money. Planning for your equipment’s future from day one means knowing that it might not meet the needs of your plant forever. This can occur for a number of reasons, such as an overall manufacturing update or inevitable obsolescence. Even during the procurement phase, it is beneficial to make an educated estimate of your equipment’s life span and develop a timeline that addresses how long you intend to operate the machine versus how long it would ideally be operational — these are often significantly different.
When determining the difference between how long you are likely to keep the machine in use and how long you would ideally like it to last, consider its changing value over time. For instance, it may be more cost-effective to keep a machine for less time than you consider ideal, replacing it with a newer piece of equipment within five years rather than ten. Will you save more money liquidating a machine earlier than expected or keeping a machine for its total operational life?
Consider how this will impact other processes that operate jointly with the machines in question — are they only compatible with one another such that replacing one will inevitably translate into an entire system upgrade? If so, is this an upgrade you can afford? Alternatively, are your processes designed so that machines can be swapped and interchanged throughout the facility?
Cost and Value Over Time
Depending on the type of equipment, its age and condition and whether there is demand for that type of machine, certain assets can be liquidated at close to their true market value. Taking care of your machinery is a crucial step in ensuring that it operates efficiently and can be a major determinant of its resale value.
The sale price of a machine can factor into budgets from the start. If you purchase a piece of equipment at a discounted rate (as with used equipment) and are able to resell it, then you are recouping funds that can reinvested into future equipment purchases, research and development, and more.
Creating a Long-Term Partnership
Many manufacturing organizations do not have the experience or the understanding of the market that is necessary to make the best decisions regarding major equipment purchases. These companies should engage an expert to manage the process, from procurement to installation to liquidation. This is why partnering with a strategic equipment partner is a great choice. Forming a partnership and relying on a team of experts from the start is fundamental.
Handle with Care: The Importance of Maintaining Your Machinery
Machinery will only last and perform optimally if it is treated with care. Equipment should be handled properly during installation and while in use. Equipment should be handled as though it is fragile, rather than heavy-handedly. Optimal performance and ultimately higher resale value occur when all parts of a machine are maintained, cleaned, replaced or repaired and routinely checked.
Training to make sure operators understand how to use the equipment correctly and troubleshooting to fix manufacturing issues are major steps that can be taken to maintain equipment. It is critical that operators are given a full breadth of information about how their equipment operates. This knowledge can have a positive impact on machine upkeep and contribute to higher resale value..
About Federal Equipment Company
At Federal Equipment Company, we are known throughout the industry for our equipment knowledge, our robust inventory of reliable equipment, and our desire to put our customers first. We are trusted by some of the most prestigious names in the pharmaceutical industry — and these companies have come to depend on us for many of their equipment needs. As our business revolves around this constant cycle of equipment procurement and resale, we understand all that is involved in both processes.
Forming a strategic business relationship with the trusted equipment buyers and suppliers at Federal Equipment Company means the difference between feeling helpless and overwhelmed or supported, prepared and informed. Purchasing equipment for your facility is a major decision-making process; however, the peace of mind that comes with working with a partner like Federal Equipment Company –– a company that has your best interests in mind throughout –– is empowering.
Justin Kadis, Business Development, Federal Equipment Company
Justin works in marketing and business development for Federal Equipment Company. He graduated from Boston University with a BSBA concentration in Marketing