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Band-Aid Equipment Repair Approach Bad for Business

Posted December 26, 2010 7:00 AM

My dad is an upstate New York General Contractor. He doesn't own a huge fleet of equipment, but he does own one deuce-and-a-half flat-bed truck, several one-ton pick-ups, two compressors, a Lull, and enough electrical and cordless tools to fill your average hardware store. As a general rule, quite a bit of my dad's annual budget goes into the purchasing of new tools and equipment for the firm. According to him, you simply can't run an efficient commercial outfit without the right equipment.

But lately my dad's been holding off on buying new tools. Instead of buying new trucks every three years, which is his usual practice, he's decided to opt for repairing his existing vehicles rather than put out the cash for new. Why? He's still feeling the ill economic effects of the recession, and it just makes good economic sense to hold onto the cash you have already stored in the bank. Because who knows if you'll have work just a couple of month down the road.

Repairing equipment rather buying new seems to be the general trend across the globe, which is a boon to parts suppliers. Says Arne Ruud of Guy Atkinson Construction LLC out of Broomfield, Colorado, who until recently was used to spending up to $10 million on new equipment annually, "In some of our areas the markets have just disintegrated," ENR. Construction online. "That doesn't give you a lot of confidence to go out and buy new iron."

But according to some heavy equipment analysts, the "Band-Aid approach" to maintaining your equipment can only last for so long before repairing rather than buying is no longer cost effective. What's this mean? It means that this year in the United States alone, sales of new equipment are expected to increase by 11.6 percent. Owners and operators like my dad will have no choice but to buy new in order to stay competitive in the market.

As a contractor, do you foresee yourself purchasing new equipment in 2011? Or will you spend another thrifty year maintaining and Band-Aiding what you already own?

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#1

Re: Band-Aid Equipment Repair Approach Bad for Business

12/26/2010 2:17 PM

And they're just now figuring this out?

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#2

Re: Band-Aid Equipment Repair Approach Bad for Business

12/26/2010 2:42 PM

It depends on what level of "band-Aiding is being done.

Hack job repair work is never a permanent solution but for many machines and their intended applications regular tear downs and overhauls can mean spending $20,000 to get ten more years out of old machine opposed to spending $250,000 on a new machine that may also only go for 10 years before its worn out and needs to be rebuilt.

Very little of what I own equipment wise is new. The vast majority of the big ticket items I have where already on second, third, or fourth hand ownership when I bought them on the cheap, scrap price many times, and overhauled or at least did moderate rebuild and update work to. If its mechanically sound and does the job just as well as the new machines I don't care if its 50+ years old and with a fresh coat of paint many classic machines will look just as good as the new equipment and in some ways even better!

Where I am from we tend to judge and rate a company by the quality of their work not how new their equipment is. That being a master carpenter with a old hammer is still a master craftsman where as the village idiot with a brand new $500 nail gun is still a village idiot plus an accident waiting to happen.

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#3
In reply to #2

Re: Band-Aid Equipment Repair Approach Bad for Business

12/26/2010 10:33 PM

A proper repair never has a degree of completion. True maintenance means keeping the machine within it's operating spec at all times. Repairs done based on RCM (reliability centered maintenance) are done by hour or by predicative factors.

Band-Aid repairs, or makeshift repairs are done "just to get out of a jam" or to "get by" - it's leaving these patches in place until something else fails (or they fail again) when the real money is spent to make the proper repairs the second time around.

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#4

Re: Band-Aid Equipment Repair Approach Bad for Business

12/27/2010 12:01 AM

tcmtech and Cbrunner, both good answers. Banaides are to get that job done at that moment of time, then repair it to the proper specs with the correct parts so it is 100% the same as before. This can be done with just about any equipment for years. There are certain times where this approach will NOT work, based on the age and type of repair that is required. Depending on the failure, a bandaide approach will not be enough to safely operate that piece of equipment.

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#5

Re: Band-Aid Equipment Repair Approach Bad for Business

12/27/2010 2:21 AM

During the early 70's, I started an excavating business with a partner. In 1974, we purchased a 1964 Caterpillar D-6C dozer for $17K. At the time, it was our primary tractor and it was used daily. As time passed, we purchased many other dozers but we maintained that one and used it regularly. As it did not have a power tilt, we installed one after a few years, and we completely rebuilt the undercarriage several times. The engine got an unexpected rebuild as the result of leaving it at a salvage yard where we did regular grading. After a heavy winter storm, the hair-brained owner of that yard took it upon himself to clear the snow and used an inordinate amount of ether to start it instead of relying on the glow plugs. The result was several broken valves and the required rebuild.

When we sold our equipment at auction in 2001, that machine brought $25K. Many people who were not familiar with the evolution of various models thought that it was a 'new' machine, on account of the condition it was in. My point here is that, if a piece of equipment can be utilized regularly and productively, it can have a long life and be valuable for its contribution, provided it is properly maintained and provided that it is not a 'throw away' machine like many of the Asian makes.

Certainly, there have been huge advances in construction equipment, both in productivity and in operating efficiency, and an astute owner will make the decisions for replacement vs. rebuild based upon those factors, as well as residual value and ownership costs. Notwithstanding the requirements for exhaust emission controls in certain parts of the country, the cost of new equipment can be far greater than maintaining quality older equipment, as long as that older equipment can be productive.

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#6

Re: Band-Aid Equipment Repair Approach Bad for Business

12/27/2010 6:02 AM

I'm with post #5.

We've always bought the best quality tools and machinery and instigated an annual, or regular, service for all of it.

Recondition when neccessary, but good equipment, I've found, with good operators, and thorough maintenance, will last almost forever. I do have equipment which is 40 years old and still as it was when new.

I've had all the smarties tell me I'm mad, and to get new stuff all the time,

but they only do that because they can't, or won't, really afford their machinery in the first place.

Cheapest way to own machinery is to OWN it.

I know I'm so far ahead of that pack it doesn't bear thinking about.

"Poor man pays twice".

I've only replaced stuff when the newer has a significant operational advantage over the old. Not merely because some shiny-smart salesman tells me it's better to have the latest in (electronics,etc.) smart systems.

And because we aren't always chasing the repayment dollar, we can give our machines, tools etc and easier time ( as well as the operators), which makes 'em last longer again.

Frankly I question the thinking of someone who would describe this process as "Band-aid Equipment Repair."

You've been talking to too may of those shiny-smart salesmen.

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#7

Re: Band-Aid Equipment Repair Approach Bad for Business

12/27/2010 9:55 AM

As long as you can get spare parts or modify a machine to use other parts in place of ones which are no longer available (or too costly), by all means keep the old equipment.

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Participant

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#8

...An unfortunate use of the term "band-aid" in the title.

01/13/2011 10:36 AM

There's nothing wrong with extending the life of older, still useful equipment. If the budget allows, I take it to my dealer for servicing; if not, my maintenance tech can usually do the job armed with the manufacturer's service manual.

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