Do You Know Your Machines History?
Oct 16, 2013
The average age of company machinery assets and equipment currently in operation in the United States is close to 20 years – virtually double what it was in 1980, according to the Bureau of Economic Analysis.
Equipment maintenance and upkeep has largely been ignored or postponed. In fact, U.S. manufacturers have typically invested less than five percent of revenue in capital equipment, compared to the six to nine percent usually required to keep up with top performers, according to the 2011 Next Generation Manufacturing Study/Survey.
While companies have been investing in efficient, state-of-the-art technology for their overseas manufacturing facilities, their existing U.S. plants have not benefited from similar capital flows into new or upgraded equipment. This lack of investment has two major implications.
[Average age of company machinery from 1980 to 2012.]
Deterioration with Age
Manufacturing productivity decreases as assets age. Older machines tend to experience progressively more downtime, causing more planned and unscheduled maintenance, which in turn can lead to lower output and higher cost per unit. This problem can be solved through software that can track maintenance over time, provided each plant has programs in place to keep up with asset maintenance schedules.
Unfortunately, most companies have not invested sufficiently in these programs over the years and have sacrificed maintenance and upkeep as they were trying to survive in harsh economic conditions.
Secondly, any additional increase in manufacturing activity may require investing significant capital in new facilities or equipment as the existing assets may be unable to absorb the extra load. Even if the assets in place are still appropriate for the task, there may not be enough capacity to take on the returning volume.
As equipment ages, its degradation will slowly surface. Its inefficiencies, even if small, can trickle down to the quality of other products or services in your business: inhibiting employees’ ability to operate the machinery effectively, slowing down processes and dampening customer satisfaction. All of this may ultimately lead to a decline in profits. Companies must act swiftly to stay ahead of these potential setbacks, maintain a working business model and keep their current processes moving smoothly.
Future of Machinery
U.S. manufacturing companies will need to work hard to overcome the constraints they face due to aging equipment. Keeping aging assets reliably operable will require significant commitment of capital and targeted investments to extend asset productivity lifespan.
inspHire’s rental software helps companies revitalize their maintenance and upkeep programs in the short term, and helps them plan their overall maintenance strategy and execution plan for the long term. With a renewed “big picture” maintenance strategy, businesses can keep productivity increases in line with or ahead of the salary increases that will result from the competition for labor. This balance will allow for new machinery to flow into a company’s pre-instated processes, making for an easy transition in investment.
Contact us today to learn how inspHire rental software can help your company keep up with asset maintenance needs and predict when an asset may be reaching the end of its term.