Can you really save money by relocating and repurposing used equipment?
One of the services that we offer our clients is machine relocation. Our construction personnel, who are experienced with process equipment, are seasoned in the discipline of dismantling, crating, moving, and re-installing used machinery to other sites, or for other uses. While we have the ability to perform this work, one can certainly observe all the effort that can go into such a move and come away wondering if accomplishing the needed business goal by virtue of this approach is worth it …
What are your business goals?
Let me offer some thoughts on how we would answer this basic question. At the heart of the justification for a relocation/repurposing effort needs to be some very specific product and process performance goals that tie into the client’s overall business plans. Simply stated, the repurposed equipment/assets must manufacture product at a specific price point, including the depreciation of the capitalized costs of the machinery and the move. The overall cost to the business can be lower if used equipment is utilized, resulting in more attractive depreciation costs. So, from an investment cost standpoint, one could argue that where used equipment can be brought to bear, this should be the preferred approach.
Where repurposing projects go wrong has much to do with how well understood the current equipment is, and how capable it will be to deliver the required product and process performance goals once relocated. If a business simply wants to move a piece of product capacity from one plant to another, and the current asset base providing that volume is to be moved and restarted making that same product mix, then the risk of interruptions, unintended costs, and unforeseen complications is low. In comparison, if a manufacturer wants to assemble a different production line using available components that may or may not have been originally designed for his application, the risk that a smooth start up and a predictable Return On Investment can be delivered escalates quickly.
Dig out the documentation
When we assist a client in moving process equipment from one plant to another, one of the first issues to be dealt with is the level of documentation available for the affected machinery. When the Process (or subsystem) to be moved is not well documented, as you might expect, the challenge becomes more arduous. In these cases, we typically provide process engineering consulting (usually on a paid basis) to go to the donating plant site to survey the equipment to be moved. This site survey is conducted with the following goals in mind:
- Recover as much equipment documentation as possible from the local archives (drawings, manuals, maintenance records, etc.).
- Clarify battery limits for components to be moved.
- Create an Equipment List with tag numbers of in scope mechanical and electrical hardware to be removed and relocated.
- Run down and account for all process utilities and ancillary equipment. Decide which of these and how much will be removed and shipped for reuse. Add to equipment list and assign tag number.
- Heat exchangers
- Control cabinets
- Motor control centers
- Control valves
- Create a photo record of each item on equipment list, for visual verification. Associate with equipment list and tag number. Annotate on the equipment list the observed condition of the equipment, and where refurbishment or replacement will be required
- Print tags and affix to individual pieces of equipment.
- Using printed photos and/or sketches, show relationships of individual pieces of equipment to each other by marking up photos/sketches with tag numbers.
A little engineering may be required
With this documentation in hand, we have been able to recreate the process line in the new location. However, there is further engineering work required at the receiving site to actually install the equipment. This engineering effort would be targeted at managing the space in the receiving plant through new general arrangement drawings, which would show locations of the process as well as ancillary equipment, and manage the space for the interconnecting services (wireway, conduit, piping, ductwork, etc.). In addition to general arrangement drawings, some level of supporting details showing how to reassemble/reconnect will be required, particularly for interconnecting services which may need to be new designs. There may be a need for structural drawings for machine foundations, or supporting steel framework. Finally, work instructions for mechanics and electricians to reconstruct would be produced, as they help the skilled trades folks reconstitute the equipment in a way that will mirror the way that it was dismantled.
At this point, the logistics for the machine move have been accomplished, and we have mechanical, electrical, and process machinery assembled, wired and piped according to the documentation that was carefully resurrected so that everything could be put back as it was when it ran. Now the question is, can the machinery be restarted, debugged, and commissioned so that it will produce the product that drove the project in the first place? We would submit that a plan to recommission the relocated process that includes a logical progression from motor rotation and machine movement/actuation to PLC control, to process control, and finally to product certification is a necessary next step. This plan should include materials and resources, and the costs for this phase need to be accounted for in the overall business case that was used to justify the machine move.
But really, it’s all about the documentation
Many times, the viability and the affordability of the relocation hinges on how well the equipment is documented, both mechanically and electrically in the form of drawings and manuals, plus how well understood the system operating parameters are (in the form of procedures, QA data, statistical performance data, diagnostic and troubleshooting guidelines, etc.). If this critical information about the equipment and process is not available, or gets lost, the cost to recreate it (or the possibility that the tribal knowledge cannot be recreated) may put the entire relocation in jeopardy.
The bottom line is that when we do relocations, the assessment of the available documentation along with the physical condition of the equipment are the first steps in determining if a relocation/repurposing effort is going to be competitive when compared to purchasing a new machine. The costs to recreate missing information, coupled with the value of used/tired machinery, many times tips the scales towards new.