to scrap everything and start over or keep slogging along?

[tetnum]

I am not all that old but have been in the business since 2007. I've been scrappy and can keep damn near any machine running at a cost. running low to no debt has been a core feature of my operation for the whole time. my guys are great and loyal but finding new capable guys has been a nightmare in the last few years. We have everything from EDM, waterjet, Plasma, saws, grinders, welders, mills and lathes: cnc and manual. I feel that everyone including myself is starting to loose trust in our machines and their ability to do what we expect the first time. this is leading to excessive test parts even on simple jobs. Replacing everything would entail a few million dollars in debt, I am uncertain that having older machines rebuilt (in house or outside) would help repair the trust employees have lost in the machines as they have grown older. We have work coming in and going out in spec on time regularly. The shop is not in any financial trouble but I want to find a way to manage finances in a responsible way to build from where we are and support the guys I have for a long time.

 

[F35Machinist]

I assume you are talking about the edm, mills and lathes. If I were you I would buy new machines for anything that you feel is not performing and sell the old ones. You don’t have to do it all at once. I would start with the ones giving you the most trouble and move through them as money allows.

Unless you live in a low labor cost area, operating suboptimal equipment is a big mistake. If you are writing from India or Tunisia or something then ignore my advice.

 

[Orange Vise]

First thing to do is identify the specific problems with your machines and determine how they got that way. Did you buy them all used?

 

[AndyF]

You may need to get over your allergy to debt for a few years, or maybe forever, and start replacing/rebuilding machines on a regular schedule before they get to the point where you don't trust them.

For now, identify your most problematic machines and come up with a rebuild or replacement plan for them. Once your guys see you taking care of the equipment, their attitudes might start to change.

 

[gbent]

Quit listening to Ramsey. He has good advice for personal finance, but it's lousy business advice.

If a new machine can't improve your productivity by more than 30% over your old machines you chose poorly. Money only costs 7-9%.

The problem with technical excellence in keeping old iron operating is its not a scaleable strength.

 

[Comatose]

You could always wait til the next downturn and then pick up the 2-5 year old machines of the people who went a few million into debt.

You can't have simultaneously lost faith in every machine in the shop. If you have a problem child, replace that one, and see if you don't feel better about the rest.

 

[usolutions]

Older machines are how old? Eat elephan one bite at a time. Start with replacing the worst offender, crank it up for it to pay for itsleft and go onto next one

 

[john.k]

Shop owners usually take an accountants advice to spend in the most beneficial way ,and minimize tax .

 

[idacal]

I sort of agree with gbent but if the old equipment isn’t making enough profit to pay for new is it going to work with new? Or are you just scaling a losing business plan? I have an aversion to debt that is stupid. I know it, I almost went broke in 08 and don’t want that tee shirt again. Yes you have 8% money making 30% but your also paying 20% of the principal. My rule for myself is if I’m not making enough to have to pay taxes I need to adjust my business plan until I am then I can start thinking about new stuff. My industry I buy new everything but the actual drill rigs the increase in production is not worth the risk factor now to me anyway. Maintance is cheaper even with down time than a 5 year risk window. Jmo

 

[EmGo]

I'd get a hot dog stand. Seriously, enough is enough. This is a shit business, why drive yourself crazy ? You alrady proved you can survive, now think of something enjoyable to do.

 

[alek95]

Quit listening to Ramsey. He has good advice for personal finance, but it's lousy business advice.

If a new machine can't improve your productivity by more than 30% over your old machines you chose poorly. Money only costs 7-9%.

The problem with technical excellence in keeping old iron operating is its not a scaleable strength.

Ramsey has a lot of terrible advice for normal people, but it's good advice for "financial alcoholics", aka people who have major spending problems and who can't be trusted with credit cards.

 

[Houdini]

I would replace them based on the profits I receive from the exchange.

first analyze the business to see if you want and can head down that road, or how far.

A lot depends on life wants and needs before business.

ie. at 60 I wouldn't be buying new machines, I would be looking to retire. etc.

 

[Superbowl]

Do you have to personally guarantee the loans?

 

[tetnum]

Reading through the replies, the shop is in Colorado not the greatest place but far from the worst. Almost every machine was bought used for less than 5k with a week or so of my time to get it back into service. the machines do not owe me anything as they all are profitable to run but the margins are shrinking as operator trust is lost and more and more test parts are being used. It is clear that it is time to bite the bullet and replace the least trusted machines. the oldest machine has a 1905 name plates the newest are from 2023 and the mid range machines from the 70's to 90's seam to have the fewest problems.

 

[???]

more and more test parts are being used

Are more and more test parts being used because the machine is worn out or because the operator/programmer is not good enough. Maybe you need a suitably qualified neutral person to go over the machines so that you can differentiate between machine and operator.

 

[tetnum]

Are more and more test parts being used because the machine is worn out or because the operator/programmer is not good enough. Maybe you need a suitably qualified neutral person to go over the machines so that you can differentiate between machine and operator.

from my opinion I think it is the operators but to be fair a third party would be needed to say that. It just feels like everyone has no trust in any machine since a hire from a now bankrupt shop with the best of the best new machines showed up. all the machines hold tolerance and do the job asked of them albeit a bit slow or I would have sent them on their way .

 

[Donkey Hotey]

Almost every machine was bought used for less than 5k with a week or so of my time to get it back into service. the machines do not owe me anything as they all are profitable to run but the margins are shrinking as operator trust is lost and more and more test parts are being used. It is clear that it is time to bite the bullet and replace the least trusted machines. the oldest machine has a 1905 name plates the newest are from 2023 and the mid range machines from the 70's to 90's seam to have the fewest problems.

All of your responses are far, far too vague to give any real recommendations. If you want guidance, people need to know what machines (specifically)? What are your products? Your profile says R&D engineer. Is that what the others are? Do you know how to run the machines? Can you hold tolerances on them? Are these a bunch of clapped out old Bridgeports that should have been melted down 20 years ago?

 

[Comatose]

Seems like it would be cheaper to replace the new hire from the bankrupt shop than all your equipment, but that's just me.

 

[alek95]

All of your responses are far, far too vague to give any real recommendations. If you want guidance, people need to know what machines (specifically)? What are your products? Your profile says R&D engineer. Is that what the others are? Do you know how to run the machines? Can you hold tolerances on them? Are these a bunch of clapped out old Bridgeports that should have been melted down 20 years ago?

Most threads like these are fairly pointless except for the entertainment value. How can strangers on the internet know what is best for OP's business?

OP should sit down and try to figure out what is the most economical choice for his business by looking at all the opportunity costs.

Sometimes it's economical to finance new machines to replace perfectly good paid-off machines. At my job we have 9 Doosan lathes: seven fully paid off basic 2-axis Lynx lathes (no live tooling, no barfeed, no nothing) and two financed 4 axis lathes with barfeed, subspindle, and live tooling.

The new machines average over 3x as much spindle uptime per month (we run two shifts with own products) and are overall much more productive, while taking less labor resources and also having a lower scrap rate. In this scenario, it totally made sense to finance half a million dollars in new machines because the company will be more profitable than if nothing had been done.

 

[???]

from my opinion I think it is the operators but to be fair a third party would be needed to say that. It just feels like everyone has no trust in any machine since a hire from a now bankrupt shop with the best of the best new machines showed up. all the machines hold tolerance and do the job asked of them albeit a bit slow or I would have sent them on their way .

So what you are really looking at is a bad apple contaminating your workplace. My suggestion would be to show him the door. Not to state the obvious but blisteringly fast rapids and tool changes make a big difference on large production runs not general work.