When companies are moving to a new facility, I’m frequently asked whether it’s better to move existing equipment to the new location or to purchase new, and my usual answer is that it depends on many factors. Now I know this really isn’t an answer at all, but the decision can’t be made without first asking several important questions, including:
- How old is the equipment?
- How well was the equipment maintained?
- What type of equipment is it: static storage, conveyor, other?
- Do you need to keep your existing operation up and running during the move?
- How many days will it take to complete the move?
- Is the new facility located near the existing facility?
- How much equipment needs to be moved?
- Is the equipment highly automated?
- How much will it cost to purchase all new equipment?
- Does the existing equipment fit your new facility?
If the existing equipment is not over 10 years old and is well maintained, then I recommend trying to reuse it. However, you must also take into consideration how long it will take to move the equipment and whether your operations must stay up and running while you do so. If moving your equipment will only take a few days, I suggest reusing it and executing the move over a weekend if possible.
Along with answering the questions mentioned above, you might also consider the labor costs to disassemble existing equipment and reassemble it in the new facility as well as the freight costs associated with moving everything.
If you purchase new equipment, you must factor in the price, installation cost, and freight cost. The extra labor associated with disassembling existing equipment sometimes makes it more expensive to reuse it than to purchase brand new. We have seen this happen many times, and although clients are often caught off guard by these findings, most don’t mind opting for new equipment.
I have also found that storage equipment is much easier to reuse than highly automated equipment, such as a conveyor system, storage and retrieval system, or other form of automation.
Storage equipment can easily be disassembled and reassembled, which also makes it easier to move while keeping existing operations running. You can move sections of storage equipment at a time then move the product stored in those sections to the new facility. You keep doing this until all the storage equipment and product have been moved.
On the other hand, it is extremely hard to keep a conveyor or other automated system up and running while you disassemble sections of it to be moved. The costs of disassembling a highly automated system are much higher than those associated with storage equipment. The higher costs are the result of increased labor hours, higher packaging costs to limit damage, higher freight costs, and the logistics of marking each section so it can be reused in the new facility.
If you decide to purchase new equipment, you can usually offset the labor costs of disassembling the old equipment by giving it away to a used equipment dealer if the used dealer will remove the equipment for free. It’s basically a trade of labor for the equipment.
In my 20 plus years, I have weighed the costs of buying new equipment versus reusing existing equipment many times, and to get the correct solution you must perform due diligence in your comparison. There is never one answer that fits all situations. However, if you take the time to carefully answer the questions above, you’ll have a good understanding of which option is best for your company.
Have you had to make this decision recently? Which option did you go with and why? Feel free to share your experiences below.