The 10 Commandments of automation purchasing

Features - Management

Cash flow, employees’ needs and regular

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I. Thou shalt not max out your line of credit on a new piece of equipment.
Budgeting for equipment is crucial to your bottom line. In today’s lending market, maintaining a healthy amount of operating capital is more important than ever.

Research lease/purchase options. And the cheapest deal isn’t always the best. The decision to buy or lease equipment is usually an analysis of your company’s cost of capital, cash flow and time value of money.

Seek competitive bids to see where you can find better deals and don’t be afraid to ask for extras or upgrades on the equipment that can be added at no charge.
 

II. Thou shalt weigh the pros and cons between new and used equipment.
It’s shiny. Its gears have no wear and tear. It’s got that new equipment smell.

You have a fever, and it’s being fueled by that awesome new product you saw at the trade show. But before picking up the phone and calling your friendly sales representative, consider whether the benefits of new equipment outweigh the cost difference for the used model. But keep in mind that used equipment might break down more often. And equipment failures cost money not only in repair bills, but also in down worker time.

Take your time and physically write down a list of pros and cons of new vs. used equipment before making your decision.
 

The decision to purchase new or used equipment is no easy one. Make sure you consider extra down time that may be associated with used machinery.

III. Thou shalt not buy a new plug transplanter from a dimly lit warehouse at the end of a pier.
Heavy equipment theft is a $1 billion problem, according to the National Insurance Crime Bureau. Don’t risk buying hot equipment because the price is too good to pass up.

To keep your own equipment from ending up in the crime syndicate, weld your phone number or an owner-applied number on all your machinery.
 

IV. Thou shalt read, and perhaps re-read, the operation manual.
Be familiar with the equipment, preferably before operation, said Bridget Behe, Michigan State University horticulture professor.

“They won’t make it into a movie, so it’s a good idea to be familiar with the novel,” Behe said.

Mark sections you’ll need often and keep manuals handy. No one is going to refer to the manual if it’s hidden under boxes of old tax returns. If something in the manual doesn’t make sense, ask the manufacturer or dealer.
 

V. Thou shalt understand the meaning of a product warranty.
A lot of growers buy equipment and modify it. There are many clever shop foremen in the greenhouse business that add or take away from machinery to “improve” it.

However, most warranties are null and void once a piece of machinery has been altered. Talk to the manufacturers. Tell them what you need. Can they build something to your specifications?

“With the exception of some tractors, I don’t think we’ve ever bought a piece of new equipment that we didn’t have to tear apart and rework it so it works effectively,” said Denny Blew, president of Centerton Nursery in Bridgeton, N.J.

Also never, ever, tamper with a piece of equipment’s safety guards or devices. Never sacrifice employee safety.
 

VI. Thou shalt conduct training sessions on the equipment operation.
Someone on staff with experience using a machine should be in charge of training the rest of the crew. Trial by fire is no way to learn how to use a new piece of equipment.
Can you say, “worker’s compensation?” How about “costly repairs?”

The manufacturer or dealer may offer a service to train equipment operators. Ask if your dealers offer an orientation or mentoring period after a purchase, and if refresher courses are available.
 

VII. Thou shalt begin, and continue, a maintenance schedule for each piece of equipment purchased.
Don’t view maintenance as a hassle or time waster. Build maintenance into the production schedule just as you would crop fertilization or passing out paychecks.

If you don’t properly maintain the equipment, you’ll likely void any warranty (see Commandment V). And keep good maintenance records.
 

Ask peers for advice before purchasing new equipment. Photo courtesy of FlowVisionVIII. Thou shalt ask peers for advice before purchasing new equipment.
You may ask your golf buddy or your child’s basketball coach about that new Dodge extended cab. Use the same reasoning when purchasing greenhouse automation equipment. Your peers will give it to you straight.

“It works great as long as you keep it out of the rain.”

“It’s good, but I wish I would have bought the upgrade that works with 25 more types of plug trays.”

Check with local greenhouse or nursery grower associations to see if they have any equipment demonstration days scheduled. Also check to see if trade shows offer automation demonstrations as well.

Check Internet sites for demo videos and for product testimonials.
 

IX. Thou shalt ask employees for a wish list and consider their needs before purchasing automation equipment.
Whether it’s a soil mixer or a pot de-stacker, ask the employees who use the equipment what they need, what they’d like and what would make your operation run more efficiently.

“My advice is, no matter what you buy, involve everyone that is going to use it in the decision-making process,” said Amil Kleinert, president of T-Mate-O in Charlestown, Ind. “I spent most of my years in farming buying machinery and hoping I made the right decision. Most of the time it works out great, but then sometimes it’s like one time: My wife hated the new $1,500 mattress we had just gotten a year earlier, so I gave it away and bought a new one. This one is even worse, so we are going to look for another, but this time we both need to be involved.”
 

X. Thou shalt not have equipment envy and purchase the latest-and-greatest product to upstage your neighbor.
The greenhouse down the road just purchased a new potting machine. But does this mean that it’s the right equipment for you?

Gut feelings are no basis for capital expenditures. Think things through and do your homework before signing on the dotted line.
 

For more: Bridget Behe, Michigan State University, behe@msu.edu. Denny Blew, Centerton Nursery, (800) 533-1132. Amil Kleinert, T-Mate-O, www.treesupports.com.