Used Machines - The Insidious Competitor Many OEMs Try to Ignore at Their Own Peril and Expense
Here's a newsflash.
Nobody considering a capital investment is going to ignore viable options in addition to you and your direct competitors. These include delaying, doing nothing, adding a shift, paying overtime, hiring temp labor, outsourcing....and, yes, no matter how much you wish it weren't so....used machines. In fact, they may specifically consider your own machines - used vs. new.
And the reality is that not only would they be negligent in their analysis if they did so, but further, that used machines may legitimately be the best answer for them for reasons that go deeper than simply cost.
It turns out that used machines aren't necessarily cheaper once everything is accounted for, but in periods of extended lead times and supply chain disruption, they may be much faster to implement. They may also reduce the risk of experiments and other process and product R&D, and harmonize platform and generation with current equipment to simplify training and maintenance, and offer other benefits.
Yet OEMs often turn up their nose at used machines, focusing exclusively on new capital equipment sales.
That may be a costly mindset, and Matt Smith takes us on a journey of insights that's deeper than most others can. He's been deeply involved in the used machine and asset management space for years, and now, as the CEO of a capital-intensive manufacturing company, he makes frequent decisions on investment, including new and used machines.
Want to understand what you might be missing by ignoring the used machinery market? Tune in and check it out.
Connect with Matt for more insights around creating a strategic used machine program.
Matt's current company AOTCO Surface Finishing, and used machines resources mentioned in the podcast - Investment Recovery Association. EquipNet, BidSpotter, LabX, Surplus Solutions, and Surplus Sherpa |
Turning Used Machines from Competitor to Strategic Opportunity - Matt Smith on Industrial Growth Institute Episode 7
Episode Recap
Summary
Matt Smith joins Ed Marsh in the studio to discuss the complexities of the used machinery market, sharing insights from his extensive experience in all facets of the machinery world around industrial manufacturing.
They explore the challenges of self-competition, the importance of global asset optimization, and how OEMs can leverage the used machinery market to enhance their business strategies. The conversation also delves into risk management, capital investment decisions, and the evolving dynamics of buyer behavior in the industrial sector.
Takeaways
- Your toughest competitor is often your own machinery.
- Used machines are common in the market during recessions as liquidations rise.
- Lead time is a critical factor in purchasing decisions, and used machines may be attractive.
- Companies can de-risk their decisions by exploring used equipment to reduce investment or exit unproductive investments.
- The used equipment market can be risky if not approached carefully.
- OEMs can improve the buyer experience with used machine options and secure early market share.
- Unlocking a wider market through used machinery can increase profits.
- Doing homework on the used machinery market is essential for success.
- The market dynamics are evolving rapidly due to technology and buyer behavior.
- Managing relationships with buyers is crucial for long-term success.
Takeaway Quote from Matt Smith
- "Lead time has been number one."
Outline
00:00 Introduction to the Challenge of Self-Competition
04:03 Understanding Global Asset Optimization
10:17 The Dynamics of the Used Machinery Market
19:23 Leveraging Lead Time and Flexibility
24:08 The Role of OEMs in the Used Machinery Market
31:48 Navigating Capital Investment Decisions
40:09 The Importance of Risk Management in Equipment Purchases
46:05 Conclusion and Key Takeaways
Used Machines Aren't the Only Complication You'd Probably Wish to Ignore
AI and changing buyer behaviors are dramatically changing what we must do to market and sell successfully in today's markets. The old tactics and mindsets are increasingly ineffective in machinery sales. We may wish it wasn't the case, but hoping doesn't put us back on track to winning deals proactively.
Take a deep dive into changes in our marketing and sales environment, and how we must adapt.
That's what I've outlined in this recent paper.
