The classic signs are there for a potential recession. You may have already seen the directives from your company (or had to issue them): No unnecessary spending. Make cuts to required areas. Do more with less. Thanks to lean manufacturing initiatives, this may not be much of a stretch for some companies. Extended cuts to capital spending during a recession could be a challenge for even the leanest firms, though.
We hope to look back on this in a couple of years from a “no recession” vantage point. But we’re also of the “hope for the best, prepare for the worst” camp. And the reality is that facilities will need to stay updated to remain competitive regardless of the economic landscape.
When it comes to modernization, you’ve got some choices ranging from low-risk to high-risk. At any time, the highest risk involves doing nothing, then being blindsided when legacy equipment dies. But during uncertain economic times, companies aren’t exactly racing to allocate limited budget dollars to preventative work.
Rather than wait for the no-warning equipment crash, consider a phased approach to modernizing. This will allow you to continuously improve your operation using OpEx dollars – an ideal solution for any company that is looking to limit capital expenditures during an uncertain financial situation.
If your company is skittish about the large capital cost that accompanies a traditional rip-and-replace update – not to mention the extended downtime that could result – modernizing on your timeline is ideal. The gradual use of the existing OpEx budget ensures that improving your systems won’t be a drain on company resources.
American Castings is one company that found success bypassing a rip-and-replace. By modernizing in phases, they estimated saving about 140 hours that would have been spent rewiring all of their I/O racks and troubleshooting had they opted for a traditional update. They projected a cost savings of over $100,000 in lost production and implementation time.
By opting for a modernization gateway, you can keep your legacy equipment running in parallel with your new systems – allowing you to make sure everything’s working as it should before finalizing your new setup. Depending on what you’re modernizing, you can even keep your legacy PLC code – ensuring there are no hiccups as you improve your operation.
Recessions carry uncertainty and risk for any business – but also the promise of a brighter economic future after the doom and gloom. By planning now for continuous small improvements throughout that time, you can ensure your company’s well-equipped to leverage the business gains that will follow.
Have questions about modernizing your facility? Make sure to contact your local tech support team!