WorldWide Drilling Resource

17 WorldWide Drilling Resource ® APRIL 2015 An Age-Old Question Compiled by Amy White, Associate Editor WorldWide Drilling Resource ®® There you stand, looking out over the lot containing your equipment and acces- sories. On one hand, some of it is still in decent shape; on the other hand, you have equipment causing constant worry every time it leaves the yard, if it indeed leaves the yard! Sooner or later, a decision has to be made: “Do I fix it or get rid of it?” The time has come for some heavy-duty thinking. You’ll most often find yourself asking if you should repair or replace something during the event of a breakdown. Keep in mind, even though you may be forced to make a quick decision, it will definitely affect your bottom line down the road. A clear understanding of both options - repairing and replacing - will help you make a more informed decision. Major repairs are usually expensive. If you proceed with a repair, you’ll incur costs for parts and labor, as well as lost revenue from your equipment’s down- time. With a repair, you’ll also have to decide whether to replace or rebuild parts. When rebuilding a major part, make sure to add up all costs involved, including the extra time it’ll take to do the rebuild. Also factor in the life of rebuilt parts compared to replacement parts, which usually last longer. Repairing equipment may naturally seem like the cheaper route, but this is not always the case. Constantly repairing old, inefficient equipment may not make sense if your assets are slowing job progress. New equipment can offer several advantages if you make the right pur- chase. A fresh piece of machinery will likely be more productive, have less maintenance costs initially, and cause fewer project delays. Examine a potential asset’s opera- tional costs and maintenance require- ments to make sure you’re getting the right machine for your business. Another crucial factor to consider is the operator. Do you have time and resources to train an operator on new equipment? An improperly trained operator can drasti- cally affect the useful life of a machine. Getting as familiar as possible with the equipment you already have is a good place to start. Make a list of every- thing needing work. Figure out how much repairs will cost, and see if the parts you need are available. Prioritize repairs based on estimated need. If the cost of repairs consistently exceeds the monthly obligation of a new Should I repair or replace my equipment? unit, it’s time to replace. If you won’t use a new piece of equipment enough to jus- tify the purchase, consider renting what you need and figuring the cost in with your bid. Breakdowns are inevitable, so your best option is to be ready. Adopt the practice of keeping detailed mainte- nance, repair, and use records. Check with a Certified Public Accountant if you need help setting up an effective system.