Repair or replace equipment

Knowing when to repair or replace equipment

Free guide to preventive maintenance

How do you know when to repair or replace equipment?

The decision to repair or replace equipment should be based on minimizing the total cost of the equipment to the business over its remaining lifetime. There are a number of factors to take into consideration when deciding whether to repair or replace equipment, which we’ve broken down below.

Cost to repair

Cost per breakdown

  • Direct cost of repair, including cost of removing the broken part, disposing of it, replacement part cost, and cost of installation and testing
  • Cost of lost production, including lost profits from lost production, cost of scrap materials, impact of the repair on product quality, and miscellaneous costs
  • Collateral cost including environmental cleanup, occupational health and safety costs, legal costs

One-time cost

  • Cost of inventorying spares related to the repair

Ongoing costs

  • Impact of repair on product quality and production capacity, and maintenance costs over the remaining service life

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Cost to replace

Disposal cost of retired equipment

  • Decommissioning and disposal cost
  • Salvage value
  • Equipment write-off cost (non-cash)

Cost of purchasing and installing a replacement unit

  • Research time, capital equipment cost and spare parts inventory cost, cost of tying up working capital
  • Installation cost including miscellaneous parts and supplies, inspection and certification costs
  • Training & safety meetings prior to deployment

The replacement unit’s impact on production

  • Lost production during installation and commissioning
  • Product quality
  • Equipment availability
  • Production capacity
  • Equipment operating costs
  • Labour costs

Out-of-warranty costs

  • Cost of repairs
  • Lost production
  • Collateral costs
  • One-time costs
  • Impact on product quality
  • Impact on production capacity

Where does CMMS data come in?

A CMMS can provide you with the all the data you need to estimate the repair costs over the remaining life of the equipment.

With Fiix, for instance, you can capture equipment cost, warranty information, cost of repair, cost of parts, estimated time to failure, time to repair, miscellaneous costs associated with the breakdown (like scrap and compliance fines) and even the impact on production capacity if you connect your CMMS to the equipment meter readings via the API.

You’ll still need to price out a replacement unit and input the manufacturer’s warranty, reliability, and productivity enhancement data, but that’s a simple task and the information can be pulled from technical specifications. One of the benefits of using our cloud-based multi-tenant maintenance and asset management software is that even data and pricing on replacement equipment is available right in the CMMS, via a built-in marketplace. This resource has millions of parts, supplies and equipment with technical specs, pricing, how-to videos, white papers, manuals and tools for maintenance professionals.

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