{"id":838,"date":"2020-07-13T19:54:16","date_gmt":"2020-07-13T19:54:16","guid":{"rendered":"https:\/\/www.axcontrol.com\/blog\/?p=838"},"modified":"2021-06-17T17:34:31","modified_gmt":"2021-06-17T17:34:31","slug":"how-should-equipment-obsolescence-be-managed","status":"publish","type":"post","link":"https:\/\/www.axcontrol.com\/blog\/2020\/how-should-equipment-obsolescence-be-managed\/13\/07\/","title":{"rendered":"How To Manage Equipment Obsolescence"},"content":{"rendered":"\n
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No one wants downtime because of equipment obsolescence. Keep those gears turning. <\/figcaption><\/figure>\n\n\n\n

Unplanned downtime due to equipment obsolescence.  <\/p>\n\n\n\n

It\u2019s a dirty subject no one wants to talk about. And for good reason.  A 2016 study by the Aberdeen Group put downtime costs across industries at a whopping $260,000 per hour, up 60% from 2014 data.  A 2014 Gartner study was even worse: placing the average cost at $336,000\/hour.   One lost eight-hour shift could mean a $2.08 million to $2.68 million loss. <\/p>\n\n\n\n

Regardless of who\u2019s right about the costs, eliminating downtime and disruption is a high priority for most businesses.   Yet more than two-thirds of companies don’t have a full understanding of when their equipment should be maintained, upgraded, or replaced.  <\/p>\n\n\n\n

While we\u2019re excited about the future of  Industry 4.0 and IIoT, where every machine can self-analyze its needs and tell you what to do before there\u2019s a problem, we also understand most factories and industrial locations aren\u2019t there yet. They likely won\u2019t be for decades as they continue to operate with older systems in place. <\/p>\n\n\n\n

But old doesn\u2019t mean unusable.  Here\u2019s why. <\/p>\n\n\n\n\n\n\n\n

The Why: All industrial equipment becomes obsolete.<\/h2>\n\n\n\n

The newness wears off, no matter what it is.  This holds true whether you\u2019re talking about cars, or furniture, or even people.  Things in the physical world break down over time. That\u2019s entropy, a constantly occurring force in natural and mechanical systems. <\/p>\n\n\n\n

It\u2019s the same with industrial parts.  All machinery will eventually become obsolete. All parts will wear out and need to be replaced.   However, due to the natural robust quality of industrial components, usefulness continues until late stages of the life cycle. <\/p>\n\n\n\n

This means the average user can reap maximum benefits and value from early capital investments through the implementation of a structured obsolescence strategy that maintains equipment performance and efficiency for as long as it makes sense to do so. <\/p>\n\n\n\n

The How: Understanding the price lifecycle <\/h2>\n\n\n\n

You must first understand parts and their replacements\/spares have a price lifecycle.<\/p>\n\n\n\n

Industrial parts are sold at their original fair market value from the OEM (original equipment manufacturer).\u00a0 As equipment moves through various OEM obsolescence stages like final new system builds, to repair\/spare support, to limited repair or replacement, and on to final obsolescence, the price of parts may begin to rise as demand increases and supply limitations change the market. \u00a0 Over time, prices should again fall as legacy systems are replaced with newer technologies and more parts become available on the market again.\u00a0<\/p>\n\n\n\n

But the timing for this late state price drop depends upon the true lifecycle of the system. This can be different than the equipment manufacturer\u2019s stated lifespan.   GE Speedtronic systems (Mark I, Mark II, Mark IV, Mark V, and Mark VI) offer a good example between the two.   While each system was developed as though users would upgrade to the next available system after a decade,  according to PowerMag.com, no panel \u201chas ever been decommissioned for lack of parts or services.  With adequate planning and a sound maintenance strategy, TCPs are safe to operate for as long as required.\u201d (1)<\/sup>  And some of them have been; there are Mark I and Mark II systems that have been in continual use since the 1970s or earlier.<\/p>\n\n\n\n

A good equipment obsolescence strategy saves money<\/h3>\n\n\n\n

You can begin to understand why having a good obsolete parts strategy<\/a> from the beginning can help save money in several ways:\u00a0<\/p>\n\n\n\n