Equipment: Used or new?
May 8, 2012
by Norman Hunt, facilities mechanical department manager, POWER Engineers
Many times clients will embark on projects intending to use relocated equipment or equipment purchased in the used market for their processes. This is very common in the food processing sector. They do this thinking they will save significant project costs over purchasing new equipment for their processes, and the lead times on used equipment are usually much shorter than purchasing new.
Sometimes this works well, but other times it can be a painful experience. Over my career, I have worked on numerous projects that installed relocated or used equipment. Some were quite successful and others were not as successful. I would like to share my thoughts on new versus new.
Using relocated or used equipment may be, on first glance, a more economical project approach, but there are pitfalls that the engineer must make the client aware of that could add to the apparent cheaper cost. The client can then make the decision to proceed with the purchase of a used piece of equipment or existing equipment relocation.
Used equipment is usually purchased in an “as-is” condition. Hidden flaws in the equipment may exist that might not show up until the equipment is installed and commissioning starts. These flaws might not be evident with the level of observation that usually takes place in the used equipment market. Many times the equipment is observed in a walk through and even purchased over the internet. An inspection and report by the original equipment manufacturer (OEM) is usually the only method to ensure that the equipment is in good enough operating order to purchase. Usually the OEM will charge for any type of inspection report. Also, there is sometimes a purchaser cost in disconnecting, removing, crating and rigging the equipment from its current location.
It has been my experience that used equipment is typically missing accessory devices that make the equipment complete and allow it to properly operate. These devices will have to be purchased and installed at additional cost.
Documentation on relocated or used equipment can be scarce or nonexistent. Many times, this creates a situation where the engineer has to use his experience or judgment in the installation design. Up-to-date and correct documentation speeds both the design and installation.
The relocated or used equipment may not meet the requirements of local codes or regulations. An example of this is the Underwriters Laboratories (UL) rating. Some jurisdictions are more stringent than others in requiring UL labels. I have worked on projects where used equipment had to be UL labeled at the site, which is an additional cost the owner did not count on. Much of the process equipment in the food processing industries is European-based.
Commissioning assistance from the OEM should be looked at as a separate cost, and sometimes it is not even available for relocated or used equipment.
Remember, you are purchasing “as is” equipment, and warranties are not available and performance guarantees typically will not exist. Any equipment failure would be an additional cost.
Check the operating voltages. As mentioned before, much of the equipment in the food processing sector is European manufactured. A transformer may be required to electrically hook up the equipment. This would be another additional cost.
In summary, I am not advising against purchasing and installing used equipment. Many times, that option can prove a viable course of action, but it is in the best interest of the client that he be advised of the hidden costs of used equipment so he can make an educated decision on what course to take.
Needless to say, purchasing new equipment eliminates the aforementioned areas of concern and provides you with much better comfort level knowing you will have manuals, accurate documentation, warranties and commissioning support. However, the new equipment will typically carry higher costs and longer lead times.
Your team’s upfront due diligence will mitigate your risks and correspondingly minimize your costs.
This story is sponsored by POWER Engineers, which has one of the most comprehensive teams of engineers and specialists serving the baking and snack industry. As an extension of its clients' engineering teams, the company provides program management, integrated solutions and full facility design for the baking and snack industry. Learn more at www.powereng.com/food.