The right equipment can improve your processes, productivity, capacity to innovate and bottom line. But to get those results from a major capital investment, you need an investment plan that addresses both your short- and long-term needs. Not only will you save time and resources, but you'll also avoid costly quick fixes.
These nine tips will help you make the right equipment purchase.
Assess your business reality
- Are you looking to increase productivity?
- Will this new equipment make you more successful in the marketplace?
- Will it help you stay ahead of your competitors?
- Can you upgrade instead of buying new equipment and still get better performance?
Get an external point of view
- The most common practice is to do a cost-benefit analysis, which helps you justify your purchase and determine the pros and cons.
- If you're in manufacturing, you may use an asset utilization ratio, which measures your ability to get optimal results from equipment and other assets. The premise is that more efficient equipment will give you better results.
Invest in digital technologies
The main driver of productivity growth is the capacity to predict and prevent downtime, and to optimize equipment effectiveness and maintenance.
Cost savings come from:
Meanwhile, improved quality comes from technologies such as real-time quality controls.
Create a technology roadmap
Rather than making isolated purchases, look at the overall needs of your business and plan for the long term. This is where a technology roadmap can help. A technology roadmap is a planning tool that aligns your business objectives to long- and short-term technology solutions. It should help you understand your current technological systems, set technology development priorities and provide a timeline for the implementation of new systems. The first part to building your roadmap is to get a clear picture of what you are already doing and mapping out your processes.
Shop around for suppliers
The Internet gives you access to a wide range of specialized equipment companies, so take the time to browse. Check out newsletters targeting specific industries, and attend trade shows where you can get some hands-on time with equipment. You can also contact industry associations for more information. Don't let price alone guide you in your supplier decision. Also consider aspects such as post-sales service and a supplier's reputation, and get references. If you're a loyal customer, you can ask for better warranties or an extended customer service plan.
Decide whether you want to buy or lease the equipment
Purchasing enables you to own the equipment as soon as the transaction is completed. Your company amortises the cost over the lifespan of the equipment. It may be possible to get financing for more than the purchase price. Leasing or renting options may be appropriate for equipment that quickly becomes obsolete or is needed for a specific project. Renting can make your payments lower than they would be if you purchased the equipment.
Keep it green
When purchasing equipment or technology, be sure that it's energy efficient. Not only will you be saving money, but you'll also be contributing to the health of the planet. Research the environmental impact of your new equipment and find out how to dispose of your existing equipment in a way that minimizes its impact on the environment.
Credits: bdc.ca / riggscat.com / eco-globe.com