Used equipment continues to be available for automated packaging line expansions. The question quickly becomes – is the lower upfront price of used equipment worth the risks? Particularly if that equipment, like a depalletizer or conveyance system is critical to the on-going success of the packaging operation.
Below are six recommended “Must- Do’s” before finalizing a decision on buying used equipment in order to make sure the result and potential ramifications for your business are aligned with your intentions for your business.
1. Be Clear on Equipment Warranty
It is extremely rare that a seller of used equipment offers a warranty. And while there may be verbal or written statements from the seller on the status of the equipment as, “like new,” or “certified,” it is critical that you as a buyer understand in writing what it is that the Seller is offering. Upon equipment arriving at your facility, what if the description of the equipment and its features is inaccurate? What if the equipment has been damaged or poorly maintained? Is the seller providing any written guarantees, and what is the capability of the seller to support those guarantees if the equipment does not operate reliably? Part of the purchase price for new equipment directly from an OEM is the inclusion of warranty coverage to make sure your investment is running when and how you need it to.
2. Investigate the Equipment History and “Mileage”
If you were considering buying a used car, you would always want to know the year of the vehicle and how many miles it had on it. Even if the price of the car was extremely low, you would hesitate to buy a 10 year old vehicle with 300,000 miles on it, especially if you were planning on a cross country trip with your family.
Used packaging equipment, like depalletizers, is no different. You need to research and inspect the vintage of the equipment. How well was the equipment maintained, and how long was it used over how many containers? Older packaging equipment that has been poorly maintained with many cycles of operation is likely going to have more frequent breakdowns, potentially requiring significant repairs and upgrades. Just like your family on the road trip in a broken down vehicle, you do not want your high speed packaging line to shut down in the event of your used equipment failing.
3. OEM Support Availability
Contacting the OEM and getting quotes for on-site services for initial installation, and potentially longer term service contracts is a must. This may seem like an added expense on top of purchasing the equipment, but a certified OEM field technician will have the skills and knowledge to assess the equipment condition, get it installed, and validate it is working. You still will not have a valid warranty, but an investment in a certified OEM technician on-site can make sure you do not spend weeks and months trying to get that used equipment installed, operating, and performing.
4. Evaluate Safety and Reliability of the Used Equipment
OEM equipment often goes through multiple upgrade cycles, both to ensure reliability of the system, as well as the safety of the operators. In shopping for equipment, one should always research how outdated the equipment is from the latest generation of upgrades. Have any safety guards, or emergency controls been removed, altered, or modified? Every packaging operation wants to provide a safe operating environment for their team, and saving upfront dollars for used equipment that has been modified to the point of being unsafe can expose a business to significant liabilities.
5. Research the Equipment Software Release and Availability of Upgrades
Modern automated packaging equipment contains a significant amount of embedded software. This software is continually enhanced by the OEM in terms of new releases, adapting to new sensors, and drives, and delivering an optimized line performance in a packaging line. Software licenses are typically not transferable, so be extremely cautious if it is concluded that the older machine will need significant software upgrades – a purchase of used equipment does not correlate to access or rights to those upgrades.
6. Complete a Total Cost of Ownership
While the up front purchase price of used equipment will be lower than buying new, take the time to evaluate and include all other costs in a purchase analysis. Make sure to include the costs of having an OEM certified technician install and optimize the equipment, additional maintenance costs to keep this used equipment running, and the “opportunity cost” of increased downtime, which could be hours or days as used equipment can fail at a higher rate than new.
If you have taken these steps above, and the total cost of ownership shows a benefit for purchasing used equipment, then you have done the appropriate level of due diligence. Our experience at Ska Fabricating is that often by including all the higher operating costs, potential safety liabilities, and potential risk to revenue and profits due to equipment downtime, purchasers will find that the lowest cost of ownership and best investment decision is to procure new equipment that is custom built with your container design and output needs in mind.