Have a Plan to Address Machinery Obsolescence

As the new vice chair of the Associates Committee, I have the honor of writing this column. I have worked for Fosber America for 30 years, and my experience is primarily on capital equipment. My articles will attempt to provide information that I hope is helpful when addressing the capital equipment portion of your business. I welcome feedback on this article and ideas for future ones.

Obsolescence has become a dirty word in our industry, as it has caused many converters to face unbudgeted costs and unnecessary downtime. It has also become increasingly difficult for the original equipment manufacturers (OEMs), as electrical and software components have a much shorter lifespan than in the past. However, with the proper knowledge and planning, obsolescence can be managed to assure you have the highest-quality, most productive, and safest machine.

I am often asked about the expected life span of corrugated equipment. There is no good answer to this. There is machinery running that is 50-plus years old and still provides a quality product and meets present safety requirements. Likewise, there are machines less than 10 years old that struggle to do either. So, I guess the correct answer to the life expectancy of machinery is “the ability of it to provide a quality product at a competitive cost in a safe manner.” The best way to extend a machine’s life expectancy is to have a plan for obsolescence and consider value-added upgrades. Here are some tips on how best to approach this:

1. With new machinery purchases, negotiate a minimum guaranteed period under which all components and software will be supported.
2. When buying new machinery, be sure your supplier offers obsolescence and upgrade solutions as common practice. Ask to see examples.
3. Request a reference list from the OEM of other customers with like machines so you may consider “sharing parts” or sourcing components together.
4. Have an annual audit done by the OEM, and request a list of any upgrades addressing obsolescence, enhanced performance, or safety features. Note: Many OEMs do this automatically through annual technical tips.
5. When buying an upgrade, request a minimum guarantee on that portion of the machine.
6. Keep the old parts. Often, the parts that are removed may be usable on another machine in your facility or can be sold online. Note: Some vendors use the old parts as part of a discounting structure on the upgrade, so be sure to clarify this upfront.
7. Ask if training is required. Normally upgrades to replace obsolescence are developed as interchangeable without required training; however, this is not always the case. Be sure to know this upfront so you do not experience extra training costs.
8. If buying a used machine from a supplier other than the OEM, contact the OEM with the serial number, and ask what obsolescence may exist.

Let me finish by suggesting this: Suppliers in our corrugated and folding carton industry are committed to your success. The best way to protect yourself and the suppliers from the unknown is to have conversations about obsolescence on a regular basis. With proper planning, it should be something that you can put into your five-year budget plan and eliminate any surprises or unnecessary downtime. I am not suggesting that you keep your machine 50 years, but I wouldn’t settle for 10 either. Use these tips to get the most out of your machinery.

To visit Associate Members Directors’ company websites, please go to: www.automatan.com, www.bobst.com,www.hairegroup.com, www.efc-finance.com, and www.fosber.com.