Inside Information

New, Used or Refurbished Machinery… Which is Right for You?

By Ellen Rogers

Buying new fabrication machinery or equipment for your plant isn’t always a simple task. You don’t go to the store, pick one you like, buy it and take it home. Instead, you probably spend months researching the purchase to gain an understanding of not only all of the options available, but also what type of equipment will best meet the specific needs of your company. Once you know what type of machine you need, such as an IG line, tempering furnace or glass washer, you must decide whether to buy a new or used one. Or, you might choose to re-furbish what you already have. This not only offers a cost-saving advantage, it can also be a more efficient process compared to buying new and is a more sustainable approach to manufacturing and production.

When to Buy New

According to Morgan Donahue, vice president of sales and marketing with Erdman Automation located in Princeton, Minn., selecting a new piece of equipment isn’t a process that should be rushed.

“The first step in selecting a piece of equipment is to make sure you have a strong understanding of what your issue is and what solution you require,” he says. “Improved ergonomics, enhanced craftsmanship, labor reduction and/or increased production output are all good examples of issues machinery can solve.”

Donahue adds that it’s also import-ant to know what issue you’re seeking to resolve with a new machine, and to get as many stakeholders as possible involved—most importantly the people who will run the equipment.

“Ask your operators what options they think would make their jobs easier or more efficient,” he says. “Show them that you value their input by taking it into careful consideration. Try to get a feel for the level of machine complexity your operators are capable of running. Over-sophisticated equipment often goes unused. Getting your operators on board is much easier at the start of the project than at the end. Rapid change with no operator input is frequently accompanied by an unwelcoming attitude.”

Once the need has been identified and operators have been consulted, assign a project manager as soon as possible, Donahue says, adding that the machine builder you’re hiring should do the same.

“Assigning accountability on the front end goes a long way to ensure the project stays on track,” he says. “This person will act as a liaison between your company and the machine builder.”

Donahue adds that the project manager should be responsible for the entire process of integrating a new machine, including conceptualizing, quoting, purchasing, providing needed product drawings and samples, as well as training.

Is It a Good Fit?

Another important aspect of adding machinery is making sure it’s a good fit inside the facility. Detail any obstructions in the building that may be an issue, Donahue says. Review the facility’s layout to be certain it’s capable of holding the equipment, paying attention to ceiling heights, location of columns, stairs and aisles, and make sure that the facility doors are big enough for delivery of the machinery.

Donahue adds that bi-weekly communication with the supplier via email or telephone is critical. These stages can include a kick-off meeting, design review and acceptance, and the final assembly inside the plant. To ensure a successful installation, have one of your maintenance people work with the installation technicians.

As far as teaching the operators how to work with the new equipment, consider recording the machine training session provided by the installation technicians.

“Your machine builder will supply a machine manual, of course, but recording the training session will provide easy access to the specific information your team needs in the future,” Donahue says.

Why Refurbish?

For companies that opt to refurbish, probably the largest benefit is the attractive price point.

“Companies considering refurbished equipment are typically looking to maximize the value of their investment. By considering used or refurbished equipment, they’re often able to take advantage of the return on investment (ROI) and pay back the investment quicker due to a lower price point,” says Pete DeGorter, vice president of DeGorter, a machinery supplier based in Monroe, N.C. “In our experience, some also get a better product in a price sensitive way or bring an aged product back up to speed to maintain quality without investing in new equipment.”

Jim Plavecsky, owner of Windowtech Sales in Pickerington, Ohio, frequently works with companies interested in refurbishing their equipment. He says this typically involves stripping out all of the old electronics, “so all you’re really saving is the frame,” and then re-building the machine.

“We warranty it as a new machine, but it might be 30 percent less,” he says, adding that the customer will still need to purchase software.

“We can also do an upgrade to the machine,” says Plavecsky. “Let’s say a drive goes out; we can send in a technician to install new drives. As with a refurbishment, the software still has to be updated.”

Plavecsky says his company also sells a lot of as-is used equipment, and that’s a strong market. “Ever since the downturn … it conditioned the industry to search for used machinery before deciding to buy new. So a lot of companies often look at used first,” he says. “They may have a fixed budget and can’t buy everything they want in one year. If they buy used equipment, they can buy a lot more compared to buying new. The other thing is, the lead time for new equipment is off the charts. It could be six months for a new complex machine. If you need something right away used machines are instantly available.”

Bill Sullivan, president of Brin Glass in Minneapolis, has both purchased used equipment and refurbished equipment.

“Our decision-making process on whether to refurbish or replace is based on our strategic planning for our growth and where we can improve efficiencies,” says Sullivan. “If the equipment is efficient, we will try and extend its life rather than replace it. At some point you reach the tipping point on how large of an investment you make in refurbishing a piece of equipment. You balance that with what the payback period will be on a new purchase.”

Speaking of some of his company’s experiences, he says they recently re-furbished a washer for about 8 to 10 percent of what a new one would cost.

“This was a good decision as it will extend the life of the washer three to five years. In 2017 we spent 5 percent on the cost of a new CNC glass-processing machine in retooling it so that it would increase the speed in certain fabrication elements. This was successful and allowed us to invest in other equipment rather than a new CNC glass-processing machine.”

Most recently, the company purchased a used vertical IG line.

“Our current line wasn’t very efficient and we were at capacity for an 8-hour shift,” says Sullivan. “The ‘effective’ age of the piece of equipment was less than 10 years old and the pricing was attractive, so our ROI will be a short period of time.”

Risky Business

While refurbishing offers many advantages—lower costs, faster lead times and comfort in having familiarity with the machine—there’s still a number of disadvantages.

“There’s a risk that what you perceive is the problem turns out to be a misdiagnosis and you end up investing more than you anticipated,” Sullivan says. “You start down that road, and it’s too late to turn back. The fix is just a bandage, and you spend more on maintenance to keep it running.”

He adds that there are also risks to buying used.

“You’re relying on the seller’s word that the condition of the equipment is sound and in good working order,” says Sullivan. “We only buy used equipment from entities that we have or have had a relationship with in one way or an-other. There’s too much risk otherwise.”

There are also challenges on the supplier side.

“Not all used equipment comes in great condition. Our challenge is identifying all the problems and keeping the total repairs in a price point that is valuable to the end user,” says DeGorter. “Sometimes the product requires so much work that the amount we invest in the machine would not make it economical for an end user. In these cases, the machines are scrapped.”

DeGorter adds that sometimes a client will purchase a refurbished ma-chine to test out the product before later upgrading to a new product.

“When a client is looking for a refurbished edger, for example, we must make sure the refurbished product reflects our products’ expectations and lives up to the principles of new equipment: quality, reliability and durability,” he says. “From a buyer’s end, it can be a challenge finding the right product to meet their need. You’re not as able to get the customization associated with a new product ordered to your specifications. For example, perhaps there is a miter machine in your budget range, but it’s 480V and your plant has 208V power. This brings in to play the additional investment of a transformer.”

After the Sale

When a company invests in a new machine, the purchase often includes a training package, follow-up and sup-port, as well as a warranty. Many sup-pliers offer these same benefits with used and refurbished equipment.

“After-sales follow-up and training remain the same, and at DeGorter Inc., we supply a warranty for all work completed,” says DeGorter. “At times, a client will ship their machine directly to us for a full rebuild. In these circumstances, they don’t typically require additional training and often don’t require assembly, which saves further expenses.”

He continues, “In circumstances where the refurbished product is something new to the client and they’re not familiar with it, we supply the product with full installation and training—the same as a new product.”

Plavecsky adds that if the software was also updated for the machine, training might be necessary on that.

Donahue also stresses the importance of communication.

“You and your machine builder should be on the same page about problems you are trying to solve and the agreed-upon solutions,” he says. For ex-ample, don’t sugarcoat potential challenges such as out-of-tolerance product. Supply complete product drawings and samples throughout the project. Also provide a variety of products during machine set-up, debug, run-off and installation to en-sure your machines can accommodate everything you are planning to run.

Ready to Invest

Just because the options are available to refurbish or buy used doesn’t always mean these directions are the best way to go. The decision goes back to what you’re hoping to gain from the investment in the first place.

“If you are trying to increase production output, it’s critical to know if your ancillary equipment will be fast enough to keep up with a new piece of high-speed equipment,” Donahue says of buying new. “Your production can only go as fast as your slowest piece of equipment.”

Consider how fast your operators can supply and take away the finished product, he adds. Faster production may require more floor space to store the finished product. It also may be necessary to revamp your shipping and receiving schedules.

There are also cases where buying new is a better investment.

“I would consider purchasing new over used for any product that needs to be tailored to meet specific needs,” says DeGorter. “The effort to find exactly what you need on the used market can take a lot of time; in some cases it could be years before something comes available that fits your need.”

For example, fully automated systems are designed to meet a client’s certain needs, and are often integrated with their specific software solutions.

“These kinds of products are often better to buy to your spec rather than trying to make another solution work,” says DeGorter. “You may save a lot purchasing a refurbished option; however, the additional time and expense needed to rework a product to meet your specific needs is often not worth it compared to buying new.”

Going to School: How a New Tempering Line Helped One Company Survive:

Whether you decide to buy new, used or refurbish, there’s a lot to think about when it comes to equipment purchases and what’s best for your company. Gordon Galloway, president and CEO of Classic Glass & Mirror in Concord, Ontario, recently decided to purchase a new Mappi tempering line after an old one the company had from another supplier became too costly to maintain.

Galloway had purchased Classic Glass & Mirror in July 2017 and knew the older furnace had been struggling to stay operational. He says he had been buying new parts to keep it working, but ultimately a thunderstorm wiped out the brains of the machine.

“We went through a repair, but it had no software and no software back-up. So by mid-fall 2017 I realized it was time for a new one,” he says. “I had studied the market already, met with different manufacturers, and right from my first meeting with Nancy Mammaro, president of Mappi, I was sold. Their level of service, understanding of the market and the business was instrumental with getting through the process. I had also spoken with other competitive companies in the area who had Mappi equipment and they also reassured me [on my decision].”

Installation began in February of this year. This process took about a month and was followed by two weeks of training, including testing.

Galloway says one of the reasons they’ve had success with the start-up of the new tempering line was what he calls “Mappi University.” Four employees, including two machine operators, a supervisor and Galloway, took part in the training.

“They sent an instructor to our plant to walk our staff through the equipment, the machine and how to write a [tempering] recipe from scratch,” he says. “They spent a lot of time walking our staff through the science of tempering. By adjusting certain parameters, you can get various outcomes in the glass.”

“This was part of the package they offered,” says Galloway. “They weren’t just leaving us with a pre-programmed recipe, but showed us the theory behind tempering. As a company, when a tempering operation is faced with a quality problem, it helps to know the theory and have a fundamental understanding of how tempering works and the parameters that come into play.”

Since getting the new machine up and running, Galloway says they’ve continued to learn more and more about the process.

“We’ve had some different types of glass that we’ve tested and put through the oven. Some of our thin glass max sizes were bowing/twisting, and we had to play with the recipe to overcome that challenge,” he says. “Also, we predominantly fabricate North American glass, but we had some customers bring in Chinese glass that had different parameters, so we had to re-run tests to perfect that recipe.”

The new tempering line opens up many new opportunities for his company.

“This allows us to stay in business,” he says. “When the old line went down, it hurt the bottom line. We had to outsource work, and we lost customers. By bringing this in, it’s reliable, highly service-able and quicker compared to the old oven. It allows us to do more production.”

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