When Should You Upgrade Your Shop?

By Eric St. James
January 16, 2024
When to upgrade

There’s positive news for the Canadian metal fabrication market even in these difficult economic times.  We’re in a period of unprecedented growth in manufacturing following the downturn during the Covid-19 pandemic. Due to the construction industry boom with projects that require the increased need for fabricated metal, our industry has bounced back and continues to succeed.

Many opportunities appear for our sector as we experience this surge in demand, however, there are some challenges that need to be addressed. Many shop owners hesitate to upgrade their equipment and often continue to operate older, inefficient equipment that actually hurts their business bottom line.

More efficient and fast, modern manufacturing equipment matters and upgrading should be top of mind for metal shop owners today. Here are a few indicators when upgrading to a newer equipment becomes critical.

High Cost of Production

The more downtime incurred, the greater the drop in efficiency and productivity of your whole operation. Machine Operating Effectiveness and Efficiency is simply defined as the ratio between the quality parts a machine theoretically could produce and what it actually did.  If you are experiencing a high number of rejections, poor machine reliability, large backlog, and paying overtime to meet deadlines, then exploring new machine options may be the opportunity to eliminate these issues.

End of Life Equipment

There are real costs associated with running old equipment in your shop. Legacy systems don’t get supported by OEMs and parts become increasingly difficult to find and replace. Efficiency will eventually go down.

A thorough assessment of the condition and potential lifespan of all the equipment in your shop, will determine which machines need to be replaced first. Evaluate which machine is nearing the end of its lifespan as you’ll want to replace it before it causes major problems for your shop if it fails completely. Bear in mind potential resale or trade-in value of the older equipment as it may help defray replacement costs.

Entering New Markets

Another good reason to upgrade your manufacturing equipment and beat your competitors is to expand your operation and build a customer base in new markets. For example, diversifying with a new processing technology can bring new customers and enhance your capabilities in providing turnkey service to your client base. Developing new products with the highest possible quality and technical specifications will give you the edge in delivering the finest standards of service required by our industry today.

Improve Your Brand Image

An added benefit of upgrading your machinery is that it can improve your brand image in our highly competitive marketplace. New industrial equipment will decrease downtime in your shop and increase your process efficiency to deliver ever higher quality products to your customers. Also, your upgraded equipment can improve safety and deliver increased process automation which reduces labour costs: another way to stay competitive. Today’s latest machines are more energy efficient, enabling you to address current environmental concerns (and lower input costs), adding to your positive image in the industry.

Once you've done your due diligence you’ll recognize the many benefits in throughput and productivity by upgrading your equipment. Consult with your equipment supplier(s) for time studies and analysis that will quantify the improvements in productivity and don’t forget to investigate financing options as well. Most equipment suppliers work closely with finance providers to make the decision to buy that much easier by offering manageable monthly payments.

Your company’s long term success may depend on upgrading your machinery sooner rather than later. Identifying older equipment and any equity left in it is the first step. Then have your supplier run some sample parts to quantify the advantage of newer technology. The numbers won’t lie!

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About Author
Eric St. James

Eric St. James is a President and part owner of Paramount for over 20 years. Strong business development professional with a Graduate focused in Mechanical Engineering Tech. from Dawson College.


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