Equipment Justification: Do A 360˚ Review
An experienced in-plant consultant suggests 12 crucial areas to examine when attempting to justify new equipment for your in-plant.
7|Depreciation: Depreciation is a non-cash expense. Importantly, it’s a source of additional cash that was created to allow a company to identify and set aside funds representing the replacement of equipment/technology you are using.
8| Improved workflow—especially for other departments: Production flows tend to operate at the speed of their slowest link. Increase the speed or flow of the slowest link and you can expect to increase the flow or speed of the entire chain. Be sure to examine if the equipment you are considering has the potential to increase the overall speed of workflow through your operation. One question to ask: Is there more work available to produce?
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