Buy Later
Wait a minute, Jim, wasn't last month's column titled "Buy Earlier?" Yes.
It all depends on context.
Last month, we were talking about projects under way.
If you have a project in development which has not yet been funded, examine conditions carefully. If it appears the large machinery suppliers may, in the future, see a shortage of orders and, thus, open capacity in their shops, you just may want to see if you can time your project to fit that order gap.
Suppliers will make great deals when they are trying to keep their shops full. They will be satisfied with breakeven pricing in such times.
I saw this in 1982 - 83. Inflation had been raging (sound familiar?) for several years and nearly all capital projects had stopped.
At the location where I worked, we did a major machine rebuild on a 237 inch machine. The scope included:
One new deculator
New cleaners
New screens
Two new fan pumps
A new stainless steel press section with granite center roll
Several groups of new dryers
New size press
New calender stack
New reel
New roll handling system, including a new robotic wrapper and lowerator
New hood and new idler rolls in the dryer section
Replacing steam turbine driven line shaft with DC sectional drive
New building air makeup system
Jackhammering through the floor and replacing a defective pile cap on the backside of the press.
Conversion of controls from floor bench board pneumatics to control room based DCS (which required two new MCC rooms)
and all the concomitant engineering and construction services to support the project.
Downtime: 40 days paper to paper.
Price: $40 million (1982 $). $122 million today.
Think you could cover such a scope for $122 million today? Good Luck.
Due to the economic conditions, nearly all the suppliers were starving. We received unbelievable pricing from nearly everyone.
