Repair or Replace: Assessing the Condition of Your Tools and Equipment
The slower months of fall provide a great opportunity for HVAC business owners and managers to take inventory of tools and assess their current condition. In this second part of our four part series on Winterizing Your HVAC Business, The Benefits of Assessing Your Business During Fall, we quickly look into researching new tools and equipment advancements and then take a more in depth look at what analytics you should use to determine whether to keep and repair existing tools or replace them with new ones.
Your equipment still may do an adequate job, but this is a good time to see if newer tools are available that will help your business be more successful. You don’t always need the latest and greatest equipment and tools but when a situation comes up where you do need them and don’t have them that can be a problem. You should look into new technologies and best practices in order to know if there are tools available that can ultimately give your technicians an advantage out in the field and boost productivity.
An even bigger problem than not having the newest time saving tool is having tools and equipment breaking down in the field. When equipment and tools break down, everything from your productivity to your bottom line is disrupted.
Replacing equipment is a large investment; so many companies choose to repair the equipment instead of replacing it. But the costs that could go along with just repairing a piece of equipment may include frequent breakdowns, lower productivity, defective output, rising labor costs, and unmet production schedules. When you add that all up, it can sometimes be greater than the cost of replacing the equipment outright.
So how do you know if you should repair or replace? With so much to consider, it’s clear this decision shouldn’t be made without the proper data analysis.
- Analyze the Costs
Always think in the long-term when analyzing the costs of repairing or replacing. For a new tool or piece of equipment, consider the cost of purchasing the equipment, its service life, potential salvage value, operating costs, and any revenue increase it may bring. For an old piece of equipment, consider its remaining service life, operating costs, its market value and future salvage rate. From these figures, you can determine an annual average cost for each option, which will then be easy to compare.
- Consider the Age of Equipment
Equipment and tools do not age with grace. The older your machinery, the more extensive repairs it will need. This often translates to higher maintenance costs. As you continue to repair, the equipment will give you less and less for your investment of repair. You may want to consider replacing an old malfunctioning piece of equipment for a newer, technologically advanced model that will give you better efficiency and longevity. When your equipment is new, it makes more sense, in many cases, to repair it once it malfunctions.
- Consider the Cost of Repairs
What are the cost of repairs, and more importantly, how often will you be paying those costs for repairs? Documenting asset repair events provides information on number and frequency of breakdown events and costs for the repairs. Can you tell if you’re going to continue repairing this equipment several times a year, or will it likely just be a one-time fix?
- Consider Downtime
What’s the impact of downtime while the asset is being repaired? If it takes several days to repair, and if this happens frequently, you’re looking at too many hours of lost productivity. Consider this when deciding if repair or replacement is better in your situation.
- Consider Safety
Remember that older equipment can cause injury to workers if it malfunctions. Even if you stay up to date on maintenance, equipment wears down as it ages. Thoroughly inspect your equipment before making your decision so you can determine if your current equipment will continue to provide a safe environment for your workers. If it won’t, replacement is the obvious choice. If it is still meeting safety standards, it’s worth comparing costs of a replacement versus repair.
- Consider Efficiency
Always think of the long run. How efficient is a tool operating now, and will a simple repair keep efficiency at the level you want, or would a new piece of equipment that offers newer features and breaks down less frequently be better for your efficiency and your bottom line?
No matter what you choose you should always keep in mind that your tools and the tools and equipment that your team uses day in and day out are the foundation of your business. Without good quality tools in good working order necessary to perform the job, your HVAC business simply cannot thrive. Please remember to check back next week for our third installment in this series “Office Tech: Improve Efficiency with New Technology and Industry Specific Software”
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