Ed Bernard
February 6, 2018
Re-Use or Buy New? An Equipment Condition Assessment Can Help
Re-Use or Buy New?  An Equipment Condition Assessment Can Help

As the cost of foodservice equipment continues to escalate and capital dollars for new replacement become scarce, a trend is that more and more facilities are looking at condition assessment to justify the continuing use of some existing equipment and limit capital expenditure.

So how can you determine if you should reuse existing equipment?  How do you figure out the condition of the equipment?   What is the remaining life cycle expectancy?  Are safe operations of the equipment in effect? Is corrective and preventative maintenance being done?  These are just some of the questions that should be addressed in an overall equipment condition assessment.  The assessment is a necessary component to arriving at an expert recommendation for your unique situation.

Physically and Fiscally Sound AND a Wise Capital Investment

From my experience, a renovated facility reusing existing equipment with a mix of new equipment, must not only be physically and fiscally sound, but must also be a wise capital investment. The interpretation of these terms for the benefit of a condition assessment are as follows:

Physically sound – the kitchen facility must have the endurance to continue to withstand hard use and some abuse associated with commercial kitchen production of the daily required meals for the duration of the life of the entire facility.

Fiscally sound – the existing foodservice equipment which is recommended for reuse, must be fully refurbished and preferably by the original equipment manufacturer.  Any new equipment replacement purchased to carry out the activities of the foodservice system, must be the most durable that money can buy. The equipment must also be readily available and easily repairable.

Wise capital investment – the facility and its foodservice equipment must continue to permit the operation of a foodservice system that can function efficiently, be cost justifiable, and be flexible enough to meet the foodservice demands of the future. The system must provide the operators the ability to produce safe and satisfying meals.

The Elements of Equipment Condition Assessment

It is vital that the consultant understand and have a sound working knowledge and experience in such industry terminologies as equipment life expectancy, safe operations, equipment service and maintenance, as it relates to existing equipment.

Equipment Life Expectancy

After contacting a sample of equipment manufacturers through an informal telephone survey, I was able to summarize equipment life expectancy in two ranges, depending on type of equipment: 10 -15 years and 15 – 20 years. The manufacturers contacted were small, large, and with years of reputable industry experience and presence.  The equipment grouped under the survey included Refrigeration, Exhaust Hood Systems, Preparation Equipment, Cooking Equipment, Holding and Storage Equipment, Meal Assembly and Meal Delivery Equipment, Ware Washing and Waste Equipment. My survey found that, with regard to planned obsolescence, the manufacturers were generally using ten years as the minimum base and were not willing to exceed a commitment beyond a 20-year life span for a piece of equipment. This also depended on the nature and usage of that equipment.

Safe Operations and Equipment Service and Maintenance

This then introduces the elements of safe operations as well as preventative service and maintenance. From my survey and follow up discussions with the manufacturers, it was concluded that safe operations, combined with regular service and maintenance, correlated back to the life expectancy of the equipment. In accordance with a generally accepted definition by Naval Surface Warfare Center, “Life expectancy is based on equipment usage 365 days a year, three meals a day, along with proper cleaning and preventative maintenance.”

I recall that on one large project assignment, the condition assessment exercise had to establish the existing equipment under three major groupings:  Fair condition, Satisfactory condition and Good condition.  Equipment in fair condition was considered those on the borderline or at the end of their life cycle expectancy. My assessment created a recommendation of a fourth category, equipment deemed unsafe for continued operation and justifiably not suitable for continuing reuse.

What my observations have also found, are that some facilities follow a regular Service and Preventative Maintenance Program.  Some follow no set program at all and rely only on service repairs when there is a breakdown.   Again, these variances in procedure affect the overall condition of a particular piece of equipment.

Created Equal but with Different Experiences

While the piece of equipment manufactured is the same as the next one on the assembly line at the factory, the way in which the piece is used and cared for in its unique setting largely determines whether it can be reused in a renovation situation.  An equipment condition assessment is a necessary tool to this determination.  The resulting recommendations will be advantageous to the final decision-making regarding your facility renovation and can ultimately save you far more than the initial capital expenditure in question.

By:  Ed Bernard, CET, CFE, FCSI

Vice President | Toronto

 

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