The pains associated with production downtime at a plant, mill, or rig are obvious. Time means money, and idle workers, equipment and production flow means profits down the drain. But the costs of downtime can go even further than the obvious. In True Downtime Cost Analysis Don Fitchett and Mike Sondalini show just how badly these pauses in production can hurt your company. They describe three main categories of "True Downtime Costs." Contained in each of these categories are many negative effects that often aren't considered.
- "Production Downtime" accounts for more than just time losses. It also includes having to operate at a reduced rate, increased scrap, and the cost of tooling.
- "Labor Overhead" includes not just wages, but the quality control, maintenance, management, and engineering needed to get everything running at peak efficiency again.
- The "Equipment" category includes the cost of new equipment, not meeting sales expectations, bottlenecks, and start-up costs.
These hidden downtime costs are relevant when deciding to replace a slurry pump. Slurry pumps are often a single point of failure, with the potential to shut down some or all production. Waiting to replace this key piece of equipment can cost your company dearly, in time and money.
When it comes to dealing with single point of failure downtime, equipment leasing is a smart option for many businesses. Don’t just take it from us: according to Sylvia Rose at businessnewsdaily.com, “equipment leasing is a popular way for businesses of every size to affordably keep technology and equipment up to date. Because most leases do not require a substantial down payment, leasing enables you to hold on to your cash and invest it in other areas of your business.”
Why lease?
- Minimizes capital expense
- Leasing costs often come out of maintenance budgets-not capital expense budgets
- Claim 100% of the payment as a business expense, reducing net costs
Based on your organization’s financial strategy, you may want to choose a tax lease option or an equipment finance lease option. A tax lease is similar to a car lease. You make monthly payments, from 24 to 60 months. You don’t worry about depreciation. Instead, all payments can be deducted as a business expenses. An equipment finance lease also has monthly payments, but is more like an equipment loan. With this lease, you do take depreciations, but can use Section 179 of the tax code, for an accelerated depreciation. This means you can see the tax savings quicker.
Lease the toughest pump in the industry.
There are many reasons you may be putting off an equipment purchase. It may just not be in your budget to get a new pump right now. We at GPM understand these concerns and are dedicated to making it easier to get you a new pump right away with our leasing program.
GPM offers both tax lease and equipment lease plans, which allow you to pay for your pump in installments, and give your business full ownership of the pump at the end of the lease. With our quick and easy application process, you can tackle your system downtime in no time!
For more information on our lease to own options, and to see if leasing is right for your organization, view our exclusive pump leasing factsheet here or by clicking the button below.
