What should manufacturers consider when deciding between buying new equipment and relocating existing equipment?

Manufacturers should compare the total economic impact of both options, including capital investment, liquidity, equipment value, market value, service and warranty coverage, downtime, training, learning curve, damage or loss, compatibility, reliability, production consistency and employee acceptance.

How does the initial capital investment compare between buying new equipment and relocating existing equipment?

Buying new equipment requires substantially more upfront capital to purchase machinery, tools and ancillary systems. Relocating existing equipment can cost less than purchasing new equipment through dismantling, transportation, rigging, installation and commissioning, although inexperienced relocation can involve hidden costs.

Can relocating existing equipment help preserve company liquidity?

Relocating existing equipment can preserve liquidity by avoiding the full purchase price of replacement equipment. This can be particularly impactful for smaller independent companies.

How does downtime compare between buying new equipment and relocating existing equipment?

If capital is not a problem, downtime associated with buying new equipment can be minimized. When relocating existing equipment, downtime must be managed with the help of an industrial plant relocation contractor.

Does relocating existing equipment reduce employee training time?

Employees who are already familiar with existing equipment will not require additional training. Buying new equipment may require training, especially when employees are adapting to new technologies.

How does equipment reliability compare between buying new and relocating existing equipment?

New equipment may reduce some problems associated with older equipment, although new equipment may not always last as long due to cost cutting, environmental practices and planned obsolescence. Relocated equipment may have age-related problems, especially when equipment is nearing obsolescence.

Can relocating existing equipment preserve established production workflows?

Relocating existing equipment can preserve an established workflow while providing potential opportunities for improvements. Buying new equipment may require changes to upstream and downstream processes.

Is there a single best choice between buying new equipment and relocating existing equipment?

There is no cookie cutter answer. For many manufacturers, a selective upgrade strategy can provide a balance between capital preservation and modernization.

Industrial Plant Relocation Contractor

When making the decision to buy new equipment for a new facility or to hire an industrial plant relocation contractor, manufacturers need to calculate the total economic impact of both options. This is important because neither the cost of new equipment nor the quotation for relocation show the big picture. Instead, there are several factors that come into play.

Cost of Buying New vs. Relocating Equipment

Cost Factor	Buying New Equipment	Relocating Existing Equipment
Initial Capital Investment	Requires substantially more upfront capital to purchase machinery, tools, and ancillary systems.	Cost of dismantling, transportation, rigging, installation, and commissioning is less than buying new equipment but may come with hidden costs for the inexperienced.
Liquidity	Can significantly reduce cash reserves and increase debt. The cost of money must be considered.	Can preserve liquidity by avoiding the full purchase price of replacement equipment. This will be more impactful to smaller independent companies.
Book Value vs Actual Value of Equipment	High-end equipment may be prohibitively expensive while resorting to lesser-known suppliers may affect the longevity of equipment.	In today’s economy tried and true equipment is sometimes more reliable than new equipment despite having a lower book value.
Market Value of Existing Equipment	If the equipment being sold is dated, it may no longer be in demand and will be sold at a loss.	This option allows manufacturers to preserve the useful life of older equipment instead of settling for its resale value.
Service and warranty	New warranty and greater likelihood of competent servicing	It should be considered whether the warranty and service coverage area extends to the new location

Time Considerations of Buying New vs. Relocating Equipment

Time Consideration	Buying New Equipment	Relocating Existing Equipment
Downtime during the move	If capital is not a problem, downtime can be minimized.	Downtime must be managed with the help of an industrial plant relocation contractor.
Training time	May require time for training, especially when adapting new technologies	Employees already familiar with the equipment will not require additional training
Learning Curve	Despite training, it may take a while for workers to reach the desired skill level	Existing operators already understand the equipment’s operating characteristics

Risk of Buying New vs. Relocating Equipment

Risk Factors	Buying New Equipment	Relocating Existing Equipment
Risk of damage or Loss	Equipment is turned over upon commissioning	Insurance may be needed to cover any potential losses
Incompatibility Risk	May require changes to upstream and downstream processes	Established workflow is preserved with potential for improvements
Reliability	This may reduce problems associated with age; however, sometimes new equipment does not last as long due to cost cutting, environmental practices, and planned obsolescence	Age related problems may become a factor, especially for equipment nearing obsolescence
Production consistency	May introduce unexpected production flaws or issues	Production lines will be closer to original location
Employee acceptance	Employees may resist adapting to new technology and workflows	Familiar machinery may make the transition easier for both operators and maintenance personnel

At the end of the day, there is no cookie cutter answer for choosing between new equipment and relocating with the help of an industrial plant relocation contractor. For many manufacturers, a selective upgrade strategy strikes the balance between capital preservation and modernization. To learn more visit AKIC.us or call 501-268-7827.