As I write this, I am preparing for the Graph Expo Show. One of the questions I hear all the time at shows is, “do we have the right equipment?” Like so many questions it seems simple, but like so many answers it is much more complex. If asked during a seminar, it is tough to go into the level of detail required to be thorough. As a result, the answers are often abbreviated. Here is an example of an abbreviated answer, that talks about some but not all of the issues in an equipment decision.
How well is your equipment aligned with your product mix?
I like to understand and compare the capabilities of the equipment to the type of work done. The capabilities of the equipment is easy but the type of work done is not. Most companies offer a mix of products and services. The question becomes what do you do most and most profitably? That requires an application analysis. If you’re lucky, you may be able to find that information with an application analysis using a print MIS system.
Where are your bottlenecks?
Bottlenecks are places where work gets stuck. There are two types of bottlenecks – static and moving. A static bottleneck is always in the same place while a moving bottleneck moves through a plant like a snake eating a rat. New equipment does not address a moving bottleneck.
What is your utilization rate?
Utilization is how busy do you keep your equipment. Considering step up times it is often tough to exceed 75% utilization rates or 6 out of eight hours. But that’s only utilization for one shift. For two shifts that would be 12 hours and three shifts 18 hours. Considering the cost of capital equipment these days it is almost always cheaper to run it for more shifts than to buy another one.
How well are staff trained?
Another important consideration is staff training. When I say this people always look at me like I have two heads. It’s simple really. If staff are not trained well, then what looks like an underperforming piece of equipment may just be poorly trained staff. After you improve staff performance then we can assess the increase in productivity you would get and calculate an ROI for a new equipment purchase. Otherwise you’re just moving from an underutilized piece of old equipment to an underutilized piece of new equipment.
What do you think is missing? What else do you think about when considering new equipment?