It was the first piece of equipment that you acquired. Back then, you just had a handful of people working for you. Before you bought it, you could barely keep up with the volume of orders that your fledgling business got. Soon after, things started turning around for the better.

You call it Old Faithful, a lucky charm of sorts. Although it spends more time in the maintenance bay, you can’t bring yourself to decommission it.

But as any business owner should know, there’s no room for nostalgia when you are trying to make an objective decision for your business.

Asset lifecycle

Assets go through three main stages in their lifecycle.

This starts with the acquisition of the asset. After purchasing a piece of equipment, it becomes a part of your inventory, and your team monitors it throughout its useful life.

The second stage is called useful life. The term can refer to the asset’s overall condition. An asset’s useful life ends when it can no longer be repaired.

The third stage is called disposal. When an asset has reached the end of its useful life, it will be decommissioned, where it may be sold, thrown away, or in some instances, recycled or repurposed. In case the piece of equipment is vital for the operation of the business, the company may acquire a new one, which will start another lifecycle.

Maintain or decommission

Deciding on whether to retain or decommission an asset is by no means an easy task. Even if you eliminate the nostalgia factor out of the equation, there are still other factors that need to be considered. Chief of these is the cost.

But how, exactly, can you decide whether you should continue maintaining a piece of equipment or purchase a new one?

One of the first things to check is the frequency of unexpected maintenance for that particular equipment. If that asset is maintained more frequently than actually performing its primary task, you should strongly consider getting a replacement. Your asset lifecycle management software can be an invaluable tool in performing this task.

Next, check if there are still spare parts available for the asset. It may be still operating well, but in the event of a total breakdown, you have to consider how difficult (and costly) it would be to acquire the necessary spare parts.

Consider the performance of the asset. If your team, or worse, your customers, are complaining about the quality of your products, you may want to check the manufacturing assets used in production. That, however, does not necessarily mean that a replacement is in order. Sometimes, issues arise due to improper maintenance.

Determine how much you have spent (and will probably spend) for the maintenance of the asset. Run the numbers. Unknowingly, you might be spending a small fortune for the maintenance of that asset, in terms of parts and tools, and even staff-hours.

It is not unusual for some companies to use equipment that is decades old. Some even use assets that are nearing the hundred-year-old mark. And while securing spare parts may not be an issue, one potential problem companies face with old pieces of equipment is finding qualified personnel to maintain it. Simply put, if you think that it will be challenging to find a technician to take care of that asset, you might want to begin your search for another piece of equipment that can perform the same functions.

But do remember that old does not mean obsolete. It may be tempting to buy a new piece of equipment with the latest bells and whistles, but if there are no other issues with the asset except for its age, purchasing a new one may be unnecessary. However, if the newer pieces of equipment can increase your production, you should consider decommissioning your older one in the near future.

Shopping for new equipment

Timely assets inspections through a mobile assets management solution allow you to have a real-time perspective of issues that may be causing costly downtime in your processes. If you have decided that your old equipment has reached its useful life and it is time to retire it, you should not jump straight into making a purchase.

Start by compiling a shortlist of potential replacements, and as much as possible, do not rely on the brochures. Instead, check the equipment in action. This will give you an idea if that piece of equipment is a reliable replacement.

Apart from the actual cost of the new asset, look at what’s included in what you are paying for. That includes warranty and training for your staff.

Instead of purchasing a brand new asset, consider buying a secondhand item. This is particularly true if your old equipment has performed well in the past. You’ll end up saving money while minimizing the learning curve for your staff, as well as the hassles associated with getting familiar with new equipment.

Finally, manage your expectations. You might be expecting a big jump in production with the acquisition of a new asset. But that is not necessarily true. You also have to take into account that your employees need to learn how to operate the latest equipment properly.

Making the hard choice

Decommissioning an asset is no easy decision, especially if it has served your company well for several years. But that is part and parcel of its lifecycle. If the conditions merit it, then you should retire it and purchase a good replacement.


Tendai Makuwaza, Customer Success Manager at SGE.