February 2011 / Volume 63 / Issue 2|
Thoughts on acquiring equipment
By Keith Jennings
Hopefully, 2011 will be a good year for machine shops, and you probably have a list of goals to improve over last year’s results. If so, equipment upgrades may be among them.
Determining whether it’s the right time to acquire equipment can be a challenge. You want to maximize your capabilities and competitiveness with new productivity-enhancing technology, but it can be risky, putting your company on the line for a sizable commitment. The possibilities and options are extensive, and you should allocate plenty of time to evaluate them. This can be accomplished at trade shows or by personally visiting sales representatives.
Several machine tool dealers in our area have relocated to new facilities that include large showrooms, training rooms and even labs to assist customers with application issues and related machining problems. This is appealing for me. When my staff needs assistance, I know we’ll have a valuable information resource.
For some equipment, this level of support may not be necessary, and a new, high-tech showroom doesn’t necessarily equate to the perfect machine. Even so, it is good to see these companies thriving and offering great equipment in an environment more conducive to demonstrations and proper evaluation.
My dad started adding new and better equipment to our shop in the 1980s. Some of the equipment worked well and some didn’t, but the investment expanded our shop’s capabilities and helped diversify the business. In many cases, he made the commitment quickly and with little research, going on gut instinct. When my dad did research equipment more thoroughly, the experience wasn’t any better than winging it. Ultimately, you just never know whether an addition will work out as planned, so he usually took the fast track.
On the other hand, one of Dad’s friends who worked at our shop for several years during the 1990s as an accountant and consultant took a much different approach. He was from the corporate financial world and came onboard after being downsized. His approach was one of thorough research and budgeting. He sliced and diced the investment at hand and ensured we were prepared to handle it, sometimes telling us what we didn’t want to hear. He was usually right and was instrumental in helping us relocate our shop in 1996 to its current location by managing our money and ensuring we were prepared to make such an important and long-term investment.
Both approaches to equipment acquisition—“shooting from the hip” and relatively intensive analysis—have merit and deserve appreciation. Personally, I fall somewhere between them.
As we proceed into 2011, our shop will be taking advantage of some new equipment, including a sinker EDM. Machining centers are also on my wish list and maybe we’ll upgrade another machine or two.
Whenever it happens, the quality of service and response when a problem arises is my biggest issue, particularly the service and response several years after the machine purchase. The first year is easy to guarantee; it’s later that things can get sketchy. Will they still consider us an important account and be willing to set aside time after the first year?
Whatever approach you take, the market will bear fruit for those willing to risk investing in capital equipment. Many banks and institutions are ready and willing to make loans and provide workable deals. Whatever situation you’re in, it’s time to weigh the risks and make the most of available opportunities. CTEAbout the Author: Keith Jennings is president of Crow Corp., Tomball, Texas, a family-owned company focusing on machining, laser cutting, metal fabrication and metal stamping. He can be e-mailed at email@example.com.
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