Capital Equipment Evaluation Cost Justification Guide
Investing in the latest NEW equipment can reduce your costs. Here’s a Capital Equipment Evaluation Cost Justification Guide to help you determine how much money a new machine can save. Take a moment to estimate your likely savings.
The Age-Old Question Should I buy New or Rebuilt?
How many times has that old 1979 machine been rebuilt?
How many times have you wished you had a little more power in the shot end…to reduce the scrap rate from 10%, 8%, or even 6%, all the way down to 2%.
Image what your operators could accomplish if they had a reliable process monitoring system to indicate when the process changes.
Are you really satisfied with 60% uptime!
OK, so life is full of compromises……OR IS IT?
Make sure you perform a full financial assessment, considering all of the factors, before making a final purchasing decision!
Investing in the latest NEW equipment can reduce your costs. Here’s a Capital Equipment Evaluation Cost Justification Guide to help you determine how much money a new machine can save. Take a moment to estimate your likely savings.
1. Reduce/Eliminate Overtime ..................................................... $ (hrs/mo. X hourly OT rate; operator & support personnel)
2. Reduce/Eliminate Maintenance parts (Monthly)........................ $
3. Reduce Scrap Rate ................................................................. $ (Scrap reduction X total hrs/mo. X Full Machine Rate)
4. Increase Uptime ..................................................................... $ (Uptime improvement X total hrs/mo. X Full Machine Rate)
5. Opportunity Cost Savings ....................................................... $ (Key personnel available for improving production efficiencies elsewhere in the plant or working closer with customers, % of time freed X Wages & Benefits X 1.3)
6. Metal Savings.......................................................................... $ (Scrap Reduction X Dross (5%) X Shot Weight X Avg. Parts/hr X total hrs/mo)
A. Total Savings (add #1-6 & multiply by 12).......................... $
This exercise is conservative and may or may not capture all of your savings, but it is likely that the above total is a significant figure that you won’t want to leave on the table.
Rebuilt Machine Cost.............................................................. $ (Either from a rebuilder, or an as-is machine)
Additional Investment.............................................................. $ (Services and materials purchased to rebuild the machine)
Labor Cost.............................................................................. $ (In-house labor hours X Hourly rate X 1.25)
B. Total Rebuilt Machine Cost (add #7-9) .................................... $
C. New Machine Investment.......................................................... $
New Machine ROI (A/(C-B)).......................................................... %
