The average age of of material handling system is 15.3 years old, and these aging tools can have a negative impact on a business’s overall productivity, according to a new study released this month by a North Carolina material handling consulting group.
Tomkins International surveyed dozens of retailers, manufacturers, wholesalers and third-party logistics firms about the age and condition of their existing material handling equipment. What they found was that companies are holding on to equipment longer than ever before, but that they also are experiencing more breakdowns, lost productivity, and repair costs.
Old Equipment Leads to Problems
About 35% of all the companies participating the survey reported that they have at least one material handling system that is a minimum of 20 years old. And companies on average have 2.7 distribution centers with material handling systems that are at least 15 years old.
Aging equipment can lead to multiple problems, according to the survey. The two biggest reported by companies participating in the survey were:
- Lost productivity (18/2%)
- Downtime (18.2%)
Companies Aware of their Aging Systems
Of the executives polled in the survey, 83% stated that they were aware that the material handling systems they were using in the day to day operations of their business were aging.
Older equipment breaks down more frequently, can be unreliable, and can require costly repairs more frequently. All of these thing can reduce productivity and lead to a higher risk of injury for employees operating this equipment.
Most companies use depreciation to allocate the cost of a particular piece of material handling equipment over a specified time, usually its useful life. When the equipment has been fully depreciated, it’s usually time to replace it.
Risks of Using Equipment Too Long
But some companies seek to stretch out their equipment by using it longer than it was intended. This is not only potentially dangerous, but it prevents the company from taking advantage of technological improvements to that equipment, which could improve efficiency, safety and productivity in the long run.
Generally, the company that manufactures a particular piece of equipment or the place where you bought it will be able to tell you its maximum anticipated useful life. Depending on the material handling equipment, this can be anywhere from a few years to ten years or more. Most equipment isn’t designed to last longer than 10 or 15 years.
New Systems Can Save Money
Replacing material handling equipment when it has reached its useful life can actually help reduce a business’s overall costs. The cost of maintaining an aged piece of equipment — including replacing worn parts and servicing it more frequently — along with the lost productivity and downtime can often add up to more than what it would cost to replace it with a newer, more efficient version.
If your material handling equipment is approaching or has exceeded its scheduled useful life — especially if it has already been fully depreciated — you should consider replacing it. Not only will it save you money in the long run, but it will make your operation safer, more efficient, and more profitable.