Farm machinery replacement

Farm machinery replacement decisions are initially important in farm machinery operation management. A hasty decision making to replace because a machine is temporarily malfunctioning or a decision to faddishly purchase the latest model because of pride in being modern can result in a serious consequential drain of operating capital. On the other hand, delayed replacements are counterproductive. The maintenance function again plays a prominent advisory role in this aspect due to the fact that it provides the relevant machine records or data which enable the maintenance manager to perform his role exceptionally.

In most cases the reasons for equipment replacement, among others are due to;

• Lessening chances of getting a purchaser of the equipment.
• Inadequacy which result from a change in operating conditions with the consequential incapacity of the existing machine to meet the new requirements.
• Deterioration which is manifested through excessive operating cost, increased maintenance costs, high reject rates, high frequency of stoppages as well as increased safety hazard.
• Obsolescence arising from technological advancement which makes the existing machines to be less efficient in performance and difficulties in finding required spare parts of the machine.

The need to develop a good machinery replacement policy is indispensable as this will allow investment to be planned to span a period of twelve years and or thereabout. The aims of a good policy are to;

• Enable the purchases of machine to be planned in advance.
• Avoid peaks of borrowing by forecasting the cash flow.
• Ensure that the machine fleets are maintained and are in good order.
• Maximize the use of investment capital.
• Replacement of machines regularly over the period.